It is very difficult to get real estate financing in Virginia Beach, VA. The requirements of investors as well as property developers are very high here. Above all it takes a lot of time to
5 Ways Military Personnel Can Improve Their Credit For Home Buying
1. Plan For the Unexpected Sudden change is a constant for veterans. Today you may be happily settling into your freshly financed primary residence in Oklahoma. Tomorrow you may be receiving immediate transfer orders to Virginia Beach. How can you preserve your credit during the move? You can plan for the unexpected.
· Make a checklist from day one. From the first day you move into a residence, make a list of your monthly bills. Include everything from the company you pay your rent or mortgage to, to the utility companies handling your electric, water, Internet, phone, and so forth. Take the time now to incorporate business contact information into the list. It doesn’t hurt to also include your account information. Make an encompassing checklist with everything you need to know about your monthly expenditures.
· Check the checklist. When relocation orders come in, pull out that list. Start making your way through it. If you can close, suspend, or transfer all accounts, you won’t run the risk of missing a bill that later goes to collections in the mayhem of moving.
· Forward your mail. The military will automatically forward your mail, but if you setup a personal mailbox or PO box, be sure to put mail forwarding to your new location or a trusted relative or friend in place. If you miss paying off an outstanding bill, it will likely follow via mail. The idea is to catch and pay all outstanding accounts to stop a negative mark from impacting your credit.
2. Regularly Review Your Credit Report
Regardless of whether you’ve already financed a home or not, regularly reviewing your credit can keep it in good standing for a future purchase. It’s not a bad idea to attempt evaluating your credit after three months at a new location.
Reviewing your credit report provides the opportunity to catch any unpaid or open accounts from your previous residence. One of those utilities we mentioned above might have fallen off your checklist. A credit report review is a good way to spot those unnoticed lose ends.
If you see outstanding balances, reach out the original companies holding the open account, even if it’s gone to collections. If you’re contacting them within three months of a military ordered move, explaining your situation can result in assistance. Many companies will take your payoff directly, crossing out the collection activity.
3. Monitor Your Credit
Each year you are allowed to pull three credit reports free of charge. It’s recommended for the average individual to pull their report once a year. As military personnel, take advantage of your three reports.
Actively monitor your credit. You can do this via quarterly reports. You can also look into credit cards that allow active credit monitoring. Some allow monitoring via a mobile app, where you can also pay and monitor your credit card account. The app can report your current credit score and give you an active window to watch it. If you notice a sudden drop, you’ll know to investigate your credit for any outstanding issues.
4. Be Selective About Loans
Military life requires flexibility. Be selective about the loans you accept. Actively research veteran benefits and existing loan programs that might be of use to you. It’s important to find loans that remain flexible.
5. Know Your Options When it comes to buying a home, know your options. Mortgages come in four standard categories:
1. Conventional Loans: They vary considerably and require practically perfect credit. A score less than 740 can bring scrutiny and additional fees.
2. USDA Loans: The minimum credit score varies. Most lenders look for a minimum score of 660.
3. FHA Loans: Although these loans are insured by the FHA, lenders have varying requirements when it comes to credit score. The most common minimum is 620.
4. VA Loans: Remember that the VA loan program itself does not issue a mortgage; a lender handles the loan. However, the program offers flexibility. More than one loan can be active at once, and a minimum credit score requirement is around 620.
It’s important to choose a truly affordable home. The VA loan program is great for veterans because it takes into consideration more than the standard loan application. The program is meticulously designed to ensure military personnel enter into an affordable home loan on a safe and sound property with the ability to move without drastic repercussions. Learn more about the specifics of buying a home as a veteran in our next article.
Whether it is your first home or the home you plan to retire in, I will be there to ease the process every step of the way! I find great pleasure in helping people achieve their goals in real estate a....
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