When you apply for home finance through a VA loan, you increase your chances of getting into your dream home. While the majority of qualifying veterans can obtain financing, some will have their loan applications denied. Though it is uncommon, it does happen every so often. So how do you deal with rejection? Here’s what you should know.
Understand Why You Got Rejected
VA lenders don’t hand out rejection letters routinely. After all, it’s how they make a buck. But when they find hiccups in your credit history or any financial anomalies, they’ll have no choice but to send you an Adverse Action notice. This notice is a legal document required by law and contains the lender’s specific reasons for rejecting your loan.
At this point, your next best move would be to determine why your loan was rejected. Is it possible that your credit ratings are too low? Do you not have a sufficient income to qualify? If your credit is damaged, you can start working on restoring it. If you can’t afford the monthly payments, borrow less or seek a loan with a longer-term duration.
The trick is to pinpoint the source of your rejection. You can’t solve an issue if you don’t know what it is.
Build Up Your Qualifications
Your salary is quite essential when applying for home finance through regular mortgages or VA loans. You must be able to demonstrate to the lender that you can afford the monthly loan installments. If your VA loan application was rejected, it might be due to insufficient income.
In addition, the underwriter will verify your credit as part of the underwriting process. If you have a poor credit history, such as a default on an old loan, frequent late payments, or vast sums of current debt, these may be seen as red flags, and the application may be refused. If possible, avoid taking out new credit and keep your expenditures to a minimum throughout the application process.
Shop Around for a Property that Meets VA Loan Standards
If you use a VA loan, the property you buy must fulfill specific criteria. At the very least, it should be habitable, with usable electricity and plumbing systems. You will be unable to purchase the property if it fails inspection. You must also be prepared to live on the property as your primary residence. If you use a VA loan to acquire an investment property, your application will be refused.
Compare Lenders
If you have gotten a VA Loan rejection for whatever reason, you should shop around for different lenders. It would help if you looked for a second opinion because not all lenders with VA loans are made equal. To put it another way, various lenders have different policies. So, although one VA Lender may deny a VA Loan, another may approve it.
Conclusion
Don’t lose hope when your VA loan gets rejected. Ask and understand what getting approval entails. Remember that visiting a different lender may also result in a more positive outcome. A lender ready to look into every possibility is instrumental in getting you a step closer to your dream home.
Here at Pennix Mortgage, we understand the frustration that comes with getting your financing delayed, which is why we offer more flexible terms for you, like a lower debt-to-income ratio as well as one of the lowest mortgage rates in Cumming, GA. For a fitting financial solution to your needs, call us today!
