Longer answer: the VA actually has no minimum credit score for insuring the loans of qualifying servicemembers. However, most lenders will require a minimum credit score.
There are lenders that offer loans to qualifying servicemembers with lower credit scores. There is always a cost, though. It’s usually in the form of a higher interest rate and higher loan costs.
That said, this can still be a good decision. There is something to be said about locking in housing costs vs renting, for example. But you have to run the numbers and do a cost benefit analysis.
A good starting point for answering this question lies in your monthly gross income. Experts vary in their statements but generally speaking, start with 28% of your gross monthly income. E.g., if you make $4000 a month, your mortgage, property taxes, homeowner’s insurance and PMI should be no more than $1120.
MoneyUnder30 has a detailed analysis including Dave Ramsey’s more conservative approach (namely he uses take home income not gross).
If you’re looking to buy, sell or rent in the Colorado Springs area, please give Rob a call at 719-440-6626!
This is the basics of home affordability. Bottom line: you don’t want to have to stretch to make a payment. Go in with a number and let no one pressure into a higher value home purchase than you are comfortable with.
If you’re looking to buy or sell a home in the Colorado Springs area, I’d be honored to represent you!
Short answer: yesno. Read the fine print.