If you are one of the many people furloughed or laid off during the COVID pandemic, you may feel discouraged about any previous plans to buy a house. If you're a veteran or a spouse of a veteran, however, the VA loan program may still make it possible if you've since found work again. The VA loan program is particularly helpful in that the VA does not set minimum limits like a minimum credit score. The lenders do, though they tend to allow lower scores than many conventional lenders. Still, you want to try to get that loan with as little hassle as possible, and you can increase your chances of success when you turn your attention to your credit report.

Start Cleaning Up Your Credit Now

Don't ignore what those months off work did to your credit. Check everything out, make sure all accounts are up to date (if you were late with any payments but have caught up, make sure your report shows those payments are now on time again), and if any accounts are not current now, make those back payments to bring everything back into good standing. The lenders for VA loans don't rely solely on credit and scores, but they will want to see that you're not currently struggling financially.

Look for a Lender Who Requires a Lower Credit Score

Lender requirements for credit scores differ for each company, with some accepting credit scores in the mid and upper 500s. Lenders who require lower scores are just as good as those who require higher scores, but because they are fine with lower scores, they may be more understanding about other credit issues, such as late bills during the past few months. Again, you want to catch up on all payments before you start applying for a VA loan, but these lenders may be more amenable to that history.

Ask About Different Down Payment Percentages and Getting Approved

The down payment you offer can also affect your chances. If a lender sees you apply for a relatively small mortgage, you may have a better chance of being approved than if you were applying with a tiny down payment (and VA loans require little in the way of down payments). Once you find out what amount of down payment would flip you into the approved group given your credit history, start saving up for that immediately. Stay in touch with the lender, too, to ensure you hear about any policy changes that could affect you.

VA loans let you buy a house with better terms if you're a veteran, an active-duty member, or a spouse of a veteran or Armed Forces member. If you're worried about how the past several months have affected your credit and chances to buy a home, you have a way out that brings you closer to homeownership.

Contact a company like Dominion Capital Mortgage to learn more.