Borrower A gross income is $5,000 monthly. The next step will be to take the monthly minimum payments that show up on his credit report. IE: car loan payment, credit card minimums etc. Next we look at his current housing expense. We take the minimum payments + the current housing expense and the new proposed expense and add these numbers up.
Example: Borrower A has the following bills:
Car loan $300
Credit cards payment $175
Student loan $100
Living Rent Free
Proposed new payment with taxes and insurance $1,800
TOTAL $2,375
We take the VA debt obligation of $2,375 divided by the income of $5,000 = .475%. We move the decimal point to the right and our debt to income is 47.5%. The borrower qualifies for a VA mortgage with this DTI ratio.
Most lenders are have a max DTI between 41%-50% .
Core Mortgage Financial does not have a VA DTI limit or credit score requirement. As long as the automated system shows the loan is approved/eligible we can close the loan.
The highest VA debt to income ratio I have completed is 67%. The borrower had excellent credit score and large cash reserves in the bank. In order to have a high VA debt to income you must have compensating factors like high credit score and reserves. The automated system looks at credit score/history, debt to income and cash reserves when making a decision.
I hope this clarifies the VA debt to income ratios ! Last week i received two calls with regards to VA debt to income ratios.
Thanks !
855-554-2673 (Toll Free)
VA Home Loan Experts
Mortgage:
Collectively, the security instrument, the note, the title evidence, and all other documents and papers that evidence the debt. A Mortgage is a loan secured by a lien on real estate held in fee simple or on an acceptable leasehold estate. A loan made for the purpose of purchasing, building or rehabilitating real property, and secured by that property. A pledge of real property as collateral for payment of debt. The term is also used to describe both the mortgage (security instrument) and the promissory note evidencing the debt, which includes the terms of the debt’s repayment.
The US government has set up housing grants for first time home buyers both at the Federal and at the state level. For first time home buyers, the New York government grants is one of best offers one can think of in these days of acute monetary crisis throughout the country. Which may be in thousands of dollars, provide real relief to citizens, wishing to buy their first homes. Learn more:
ReplyDeleteHome credit tips
David,
ReplyDeleteThank you for the information. The home buyers grant is not as critical for VA mortgages as no downpayment is required. The seller can pay up to 4% of the buyers closing costs. If the VA mortgage is structured properly, the borrower can get into the home with no cash out of pocket.
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