Whether you are looking at a VA, USDA, FHA or conventional loan, find out what you need to ensure your eligibility for a home loan through one of these special finance programs.
A Certificate of Eligibility (COE) will prove that you meet the eligibility requirements for a VA home loan with the Department of Veterans Affairs. There are government forms to gather as well as a statement of military service. A COE can be obtained online through the VA benefits website and Freedom Mortgage can help you with all the details.
You need to ensure your property is located in an eligible rural area. Check out the USDA government website to help you determine if your location qualifies. USDA loans also have income limits that vary by location and household size. This map will help determine your eligibility.
To be eligible for an FHA loan you need at least 3.5% down payment. Plus, there are income requirements to ensure you can cover your monthly debts including your new loan.
Conventional loans require a higher credit score and down payment requirement. However, more properties are eligible for conventional loan financing such as second homes or investment properties.
Your credit score
Your credit score is based on several factors, including how much debt you have, your credit history and whether or not you pay your bills on time. Your credit score can affect whether or not you'll meet the requirements for a loan. VA loans can be more forgiving than conventional loans when it comes to credit scores.
You are eligible for a free annual credit report through www.annualcreditreport.com. Read through it carefully and make sure there are no mistakes. If there are any errors, follow the information provided to correct any accounts so that your score is as accurate as possible. If you have already received your free credit report, you can still get another, you'll simply need to pay a small fee to receive another copy to know where you stand.
You may want to avoid opening a new credit card account, buying a car or making any other large expense when applying for your home loan, as that could change your credit and may affect your eligibility.