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VA Home Loans

My fiance` and I are planning on using a VA Home Loan to buy a $58,000 foreclosed house i know very little about VAHL's i was wondering if someone could go through the in's and out's of this process; pro's and con's. We are first time home buyers with very little money saved and i have poor credit. His is great, but i am still a little worried about mine.
  • September 03 2009 - Birmingham
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Answers (1)

The benefit of a VA loan is it let's vets to get into homes with 0% down payment.  It also does not have mortgage insurance, however it does have a funding fee.  It still works out to be way cheaper than FHA and conventional, with less money down.

Couple things about your scenario:

1.  If you are not married and both of you are on the loan, you would have to put 12.5% if your finance is not a veteran.

2.  Foreclosures are sold "as is", however, if the VA appraiser notes any deferred maintenance or health/safety issues, these will need to be completed by the buyer prior to settlement.  This means you would be making repairs on a home you do not own.  This can be okay if you have a good lender and LO, but still a little scary.

3.  You mention you have poor credit.  VA does not have minimum scores, however, they still require established credit.  And, most lenders have credit overlays, which require borrowers to have a minimum of 600 credit scores.

Sounds like this transaction may not work out, but I would recommend meeting with an LO to discuss your situation.  Work on fixing your credit before you look to purchase.

Good luck.
  • September 03 2009
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