Taking out loans as a veteran means you have the backing of the VA, which is generally an attractive aspect to lenders. While you are still responsible for paying off a loan, the VA guarantee adds an extra layer of insurance. However, even if the VA is on your side and even if your credit score is excellent, you might still have difficulty getting a new loan.
the Chicago Tribune recently posted a Q&A series where a person asks why she and her husband got scammed by a lender. After three months and piles of paperwork, the lender was still asking for more information. Despite a good credit rating, VA support, and a solid income, the lender chosen was dragging their feet and losing paperwork. The Tribune responded with five possible reasons why this could be happening, and we’ve compiled them for you below:
1. The lender does not want to give residential loans. The housing crisis of a few years ago affected just about every market in the global economy, and it goes without saying that home loans have been negatively affected. It is very possible that the lender is extremely careful who they give home loans to, or they just simply don’t want to give any, even if everything is in order on your end.
2. You own more than one property. Owning more than owning a property creates a somewhat complicated situation for lenders. Because of the tax benefits of owning multiple properties, your tax returns may report less income than you actually earn. When substantiating your income, lenders will need to verify the actual income you receive rather than looking at your income tax forms.
3. The lender is unable to determine your income bracket. Sometimes the answer is that you just don’t have enough income to justify giving yourself the loan. However, it is possible that VA disability checks throw a wrench in calculating the lender’s number. While this shouldn’t deter anyone from trying to get a loan if they get a VA disability, it could be the reason things aren’t going as fast or as smoothly as you would like.
4. The lender is not efficient. Whether management is sleeping at the wheel or every employee has too many balls up in the air, some lenders aren’t as efficient as they probably should be. While it can be difficult to assess, be aware of unprofessional behavior – you don’t want to work with a lender who is going to mismanage something as large as a home loan.
5. They don’t work well with the VA. It is rare for lenders to have a problem with issuing a loan that can be guaranteed by the VA, but some lenders might have a better relationship with them than others. If you’re having trouble with a loan, you might be better off going to a military friendly lender more suited to your veteran status.
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