Getting Approved For a VA Loan Buying a Home in New Mexico
This guide covers buying a home in New Mexico with bad credit. Are you an active duty military service member or a veteran looking to purchase a home in New Mexico either for yourself or your family? New Mexico has many veterans migrating to the state due to great job opportunities and its great atmosphere and weather. If you served in the United States Military, you have heard about VA loans.
If you meet the minimum guidelines to be eligible for a VA loan, you can apply and qualify despite having a bad credit history.
You can qualify for VA loans with outstanding collections and charge-off accounts. You can get an approve/eligible per an automated underwriting system on VA loans without having to pay outstanding collections and charge-off accounts. Today, in this article, we will tell you more about VA home loans in New Mexico and tips on purchasing a home using the loan in the state. The following paragraphs cover buying a home in New Mexico with bad credit and low credit scores.
Facts About the State of New Mexico
New Mexico is a U.S. state in the Southwestern part of the country, bordered by Colorado in the north, Arizona in the west, Texas and Oklahoma in the east, and Mexico in the south. In the northwest, New Mexico touches three other states, including Colorado, Utah, and Arizona, thereby creating the only spot in the entire country where four states meet. Its capital is Santa Fe, which is, in fact, the oldest capital in the country – founded in 1610.
The state’s economy is highly diversified, with agriculture, cattle ranching, lumber, tourism, and scientific and technological research as the main sectors of its economy.
New Mexico is one of the most beautiful states in the nation. The largest city in New Mexico is Albuquerque, founded in 1706. Moreover, the state is a leader in the country regarding oil and gas, mining, film, media, and aerospace. All these give the state a GDP of about $95.73 billion and about $46,300 per capita. Here are some more condensed facts about the state of New Mexico.
| Population | It has a population of 2.1 million people |
| Population growth | It has a growth rate of about 0.64%, ranked at position 30 in the entire country by state |
| Median Income | Individual income stands at $26,500, while household income stands at $51,250 |
| Tax rates | The state has a 5.0 percent state sales tax rate and a 4.3 local sales tax rate. Regarding property tax rates, New Mexico has one of the lowest rates, averaging 0.78%. The annual tax rate is about $1,400, significantly lower than the national rate. |
| Education | The education is par with other U.S states, with over 60% of the population holding some degree. There are 97 school districts in states where you will find above-average public and private schools. |
| Weather | The summers are hot and dry, while the winters are short, cold, and snowy. It is mostly clear throughout the year, though. The temperatures typically vary from 27 to 93 degrees. |
| Median home prices | The average cost of homes in New Mexico is $450,000, with the price per square foot averaging at about $195 |
| Renters vs. owners | The state is landlord-friendly, given that evictions take less time than in other states. But this doesn’t mean renters don’t have any rights. On the contrary, every renter has a legal right to seek fair and proper housing without any form of discrimination against them. |
What Are VA Loans
The VA home loan is a special type of loan introduced only for veterans and active duty military members to accelerate the process of buying homes for them and their families. These loans were established by the U.S. Department of Veteran Affairs (VA), require little to no down payments, and have much-reduced credit history requirements. This means you could qualify for the loan even with a bad credit history.
What Are the Requirements for VA Loans in New Mexico?
For starters, we should point out that the requirements for VA loans are the same in all the states in the U.S. Now, with that said, some of the major requirements include you must have a VA certificate of eligibility. This certificate is only given to veterans, active duty members, and their wives or widows who qualify. This loan is not eligible for the children of a veteran or an active-duty soldier. You have served at least 90 consecutive days during wartime and 181 days during peacetime. As for reserves or National Guard, you have served at least six years.
What About the Benefits of VA loans?
You don’t need any down payment to qualify for this loan unless it requires it or the property’s price is way above the established value. Lenders offer 100% financing on VA loans due to the government guarantee. You can qualify for the loan even with a bad credit history. VA loans have more lenient agency mortgage guidelines than any other loan program. However, timely payment in the past 12 months is normally required.
If the lender considers you a satisfactory credit risk borrower and you get an approve/eligible per automated underwriting system, you can qualify for the loan.
Assistance is available on VA loans for closing costs through down-payment assistance programs. The Veterans Administration acts as a government mortgage insurer for lenders if borrowers default on their mortgage note. Due to the VA guarantee, lenders can offer 100% financing at competitive rates without requiring mortgage insurance. There is no maximum loan limit on VA loans. Closing costs can be paid by seller concession or lender credit.
Buying a Home in New Mexico With VA Loans
Suppose you are a veteran or an active-duty military member looking to buy property in New Mexico. In that case, you should know that your dream of home ownership is much more possible thanks to the government’s establishment of VA home loans.
As we mentioned above, you can only be eligible for a VA loan if you are a veteran, an active duty member, or a spouse of a deceased veteran. You must need to meet VA guidelines.
The good thing about VA loans is that you can access them even with a bad credit history. Lenders offer VA loans with 100% financing, no mortgage insurance, no maximum loan limit, and competitive rates. Homebuyers don’t need any down payment on VA loans. VA loans do not have any minimum credit score requirements or maximum debt-to-income ratio caps. So, get a reputable mortgage broker in the state to apply for a VA loan today!
Steps for Buying a Home in New Mexico
When you want to buy property in New Mexico, here are a few things you must remember. Get the mortgage pre-approval first – before you do anything else, you really need to be pre-approved for the VA loan first. The reason is that when you get the pre-approval letter, you will be sure of the amount you can spend on the purchase and prove to the seller that you are qualified to buy a house. A pre-approval shows the seller you are serious about the purchase and that you are just not wasting their time.
Shopping For a House in New Mexico After Getting Pre-Approved
Get a reputable real estate agent – having a reputable and knowledgeable real estate agent by your side is crucial as he or she will enable you to navigate all the complexities of buying a home in New Mexico. Remember, when buying a home in New Mexico, you must first find ideal properties. You will need to schedule showings with your real estate agent. Once you find the home of your dreams, make an offer. The mortgage process starts once you get an executed real estate purchase contract. The final step of the home shopping and mortgage process is the home loan closing of the purchase.
Hiring a Real Estate Agent When Buying a House in New Mexico
All these can be challenging if you don’t have any help. When hiring an agent in New Mexico, you first need to identify the town or city within which you plan to buy a house so that you can find an agent who is very familiar with the local market. For instance, if you want to invest in Albuquerque, you should know that there are 4300 real estate agents in the city, while Santa Fe has 1050 agents. Hundreds of other agents are in all the other towns in the state. Do your research properly to ensure you hire the right one.
How To Buy a New House in New Mexico
Decide where you want to live in the state – this is one of the most important decisions you must make because different locations offer different experiences, and property prices vary. Regarding home prices, property in the Albuquerque area, in Bernalillo County, sits at $320,000 in 2022, while in Las Cruces’s Dona Ana County, the median price is about $280,000. If you want to invest in the capital, Santa Fe, the median property prices are about $585,000, making it the most expensive location to invest in New Mexico.
Cost of Living in New Mexico
Besides property prices, you must also consider the cost of living in each area, plus many more. For instance, life in Las Cruces is cheaper than in Albuquerque and Santa Fe. You should research all other locations of interest to determine the cost of living before you decide where to settle. Check also the local school system, as you would want to buy property where your kids could access a better education system. You should consider these things when selecting where to buy a home in New Mexico.
Home Inspection and Appraisal Buying a Home in New Mexico
A professional should do home inspections and appraisals. After you find your dream property, you must ensure it’s in good condition. So, get a professional to inspect everything in the property to ensure there are no major problems that would cost you a lot of money to repair.
Lenders do not require home inspections and are optional. Home appraisals are required. An appraisal is ordered after the home inspection.
If there are such problems, they must be considered when negotiating the final price. It is also important to have an appraiser who will assess the home’s value to ensure you are not being duped into paying more than the property is worth. Homebuyers in New Mexico must realize that you can qualify for VA loans with bad credit, credit scores down to 500 FICO, high debt-to-income ratio, outstanding collections and charge-offs, and manual underwriting. The team at Gustan Cho Associates has no lender overlays on VA loans in New Mexico.
