VA loan - does the FICO score matter?

[britishbooklady]

Ok, this is my first posting over here in the Mortgage Loans forum, so please forgive my lack of knowledge. This is our first home loan and I'm getting really frustrated with our mortgage consultant. She pulled our reports back at the end of December and pre-approved us for a VA loan. The scores were decent then, but not as good as they are now. We had just opened new accounts with PSECU the 1st of December to take advantage of their 3.9% balance transfer with no fee and used that to pay off all of DHs credit cards. The actual accounts (PSECU Visa/PSL) had not posted yet to his credit reports when she pulled his scores. Since then she has only been doing "manual updates" instead of pulling brand new reports. She said that she didn't want to cause his scores to go down from doing another hard inquiry.

So, my question is, once you are approved for a VA loan and locked in at a certain rate...is that rate based on your FICO scores or do we automatically get the best rate available because it's a VA loan?

And, if it is based on your scores, if those scores improve before closing, can they change your rate to a better one?

Thanks, in advance, for any and all advice...

[Anonymous]

To answer some of your questions because I am also going VA.

Interest rates for VA are not subject to LLPA's or Loan Level Price Adjustments. With that said you will get the same rate as someone with a 640 even if your score is an 850. You do have an option to buy points though.

FICO scores do not matter for rates, but simply for qualification purposes only. With that being said you must still meet lender guidelines. So if they require a 640 then you must have a 640, if they require a 660, then you must have a 660, etc.

Now of course the better the score, the better you look on paper if you don't have a lot of reserves, or you have a derog, or you are wanting to buy a bigger house and need to crunch ratios. Generally lenders do not like to go over 41% in back ratios for VA, but it is just a guideline. The higher your score, and the cleaner your reports the UW may be willing to go up to 55%, in back ratios, but that is lender specific as they have their own guidelines. Hope that helps.

Yesme

[britishbooklady]

Thank you for your response, yesme. That does help.

I'm just annoyed at the cost of a manual update ($52) verses a regular pull ($14). And, I found this out after the fact when she emailed us a copy asking about a loan we had paid off over a month ago that they were trying to manually update to a zero balance. Apparently, the company (Omni) had taken us out of the eOSCAR system because the manual report couldn't get them to verify anything. I told her that if she had just asked us, we would've told her to just pull new reports altogether. That account has been reported as closed with a zero balance since the first week of January.

I guess I was just getting suspicious as to why she seems to be making such a big deal out of not pulling brand new reports. Does anyone know if they can receive updated scores with a manual update?