Why VA Home Loans With Bad Credit are the Most Affordable Option

For military veterans, the financial challenges of everyday life are as testing as for the rest of us. There is a need to find work, and a home to live in, and even after years of adjustment, the periodical cash injections. Buying a new home is the biggest problem, especially when they might already have a bad credit rating. But, that issue is at least solved with the availability of VA home loans with bad credit.There is no doubt that bad credit ratings can create some difficulty when seeking loan approval, but it is not enough to ruin the chances completely. Affordable loans and low interest mortgages can be unlikely, but a great advantage with the VA (Department of Veteran Affairs) is that the cost of a borrowing is lowered significantly.The fact is that VA home loans offer genuine financial breaks, making the task for getting a new home a vastly more affordable task than for most civilians.What Are VA Loans?After World War II, the flood of returning GIs created a major problem for the government, with a need to create employment and housing for them. The Department of Veteran Affairs was founded to look after these problems, and soon afterwards introduced financial packages like VA personal loans and VA home loans, with bad credit excluded from the application process.Today, the VA guarantees 25% of the loan sum, which means that lenders face a smaller risk. As a result, the interest rate charged is reduced thus making the VA mortgage a low interest mortgage. Another advantage is that down payments are not required as part of the property deal.For example, with a home worth $250,000, a VA home loan will guarantee $62,500, leaving a mortgage of $187,500 required. And with the reduced interest rate, the monthly repayments over the 30-year term of the mortgage can be as low as $550.Qualifying for a VA loanOf course, not just anyone can get a VA loan, and there are clear criteria by which qualification is confirmed. For a start, only members and former members of the military can get VA home loans with bad credit. This means providing documented proof of that status, such as current or former rank and deployment history.Other key criteria include proof from the applicant that they have not defaulted on any loans within 12 months of the date of application, while there should also be no bankruptcies filed against them for a period of 2 years before application. Only then can a low interest mortgage from the VA be hoped for.And a final condition in applying for a VA home loan is proof of full-time employment and a reliable income. This is only logical, since an applicant needs to be an ability to repay the loans they borrow.Finding a VA LoanMost large traditional lenders do not offer VA home loans, with bad credit usually the factor that complicates matters. Online lenders are more open to these products, however, as they tend to specialize in niche markets. By spending some time searching online, the best terms can be found, and with the help of comparison sites, they can be found very quickly.The draw of a low interest mortgage is pretty strong, so the demand from military veterans is understandably high. But it is important that the reputation of these online lenders is checked out before agreeing to any VA home loan deal. So, be sure to consult the Better Business Bureau website.