@kunjaqueen wrote:
1. Mortgage Credit Scores: 660 mid score for both
2. Credit Negatives:
Charge off: Under payment plan of $350 monthly, DOFD: 10/12
30 day late mortgage: Currently current: DOFD: 10/12
3. Gross Income. $15000 combined salary, 1300 rental income
4. Source of income. All employment
5. Monthly debt payments. $2500 of payments. Rental house mortgage of $1100 with tenants for 4 years +
6. Employment (for those who are employed).
Salaried, Myself 4 years at employer, spouse 10 plus, both over 12 years in industry.
7. Assets/Reserves.
8. Location: WA State,
9. Property Description:
Single family new build, half acre lot
10. Property Value.
$520,000
11. Occupancy.
12. Transaction Type. VA Loan
Hi Kunjaqueen,
A couple of quick points.
1) Your desired loan amount of $520,000 puts you in the conforming jumbo category.
There are only 4 counties in WA where the the VA loan limit exceeds the standard limit of $424,100.
King, Pierce & Snohomish all have a VA loan limit of $592,250 and the 4th county, San Juan, has a limit of $483,000.
If you are buying in any other county you will have to put a down payment of 25% of the difference or $23,975. Here's the calculation:
Your desired price of $520,000 minus $424,100 =$95,900 X 25% = $23,975. If you're buying in San Juan you would need a down payment of $9,250.
If you're buying in King, Pierce or Snohomish county you can go up to the loan limit of $592,250 without a down payment.
2) VA requires documentation of cash reserves totaling at least 3 months mortgage payments (principal, interest, taxes, and insurance - PITI) for your rental property & you didn't mention whether or not you have assets/reserves.
3) Rental income: The amount that will be "used" will be what you show after all of your write offs on your Schedule E. This needs to be closely reviewed to determine how much of the rental income can be used to offset that mortgage payment. Here's what I mean. The mortgage payment is $1,100. Now let's say that after all of your deductions on your Schedule E the amount that "show" on paper drops to $800 per month. You would have loss of $300 per month which will be added in your debt to income calculations. This is obviously better then getting hit for the full payment of $1,100 but it's important because it does affect your DTI.
4) A lot of lenders/investors have more restrictive overlays on their conforming jumbo VA loans. For example: some lenders may require a 680 or better score or they may cap your debt to income ratio at 50% regardless of whether or not your loan gets approved with a higher ration through an automated underwriting system. I've also seen overlays that require a 7 year wait after a bankruptcy or foreclosure even though VA only requires a 2 year wait.
On the surface it looks like you'll be fine but there are a couple key pieces of missing info that need to be addressed if you want true peace of mind.
VA Mortgage Expert. Mortgage Banker lending in All 50 States.
VA, FHA, USDA. Jumbo, Conventional.
CAIVRS Expert.
With USAA your file has to get to underwriting to get someone that is knowledgeable (not always, but lately it seems to be that way). Some LO's can handle complex files, but not all of them.