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If you are over 45% DTI on a VA loan and need two compensating factors, does your ending Residual income need to be over 150% of the base residual income?
Ex. I live in GA. The base residual income for a family of 3 is $889. So 150% of $889 is $1333.50.
I was under the understanding that it was 120% if over the 41% DTI. I have not heard of the 150% until today when my preapproval came back way under what my original pre qualification came back at. My LO is not in this week, and I have been working with his assistant. It just threw me for a loop when the preapproval came back 15% lower than what my LO originally told me.
I can not find anything in searching Google that says the 150%.
I don't have an answer for you, but I am interested in what you find out. Also, do you mind sharing who your lender is? We're also in Ga and looking into a VA loan in the very near future.
We are going through Veterans United. Besides this issue, I have nothing to complain about.
@Anonymous wrote:If you are over 45% DTI on a VA loan and need two compensating factors, does your ending Residual income need to be over 150% of the base residual income?
Ex. I live in GA. The base residual income for a family of 3 is $889. So 150% of $889 is $1333.50.
I was under the understanding that it was 120% if over the 41% DTI. I have not heard of the 150% until today when my preapproval came back way under what my original pre qualification came back at. My LO is not in this week, and I have been working with his assistant. It just threw me for a loop when the preapproval came back 15% lower than what my LO originally told me.
I can not find anything in searching Google that says the 150%.
Hi Will25U,
You are correct. You only need your residual at 120% if your DTI is over 41%.
VA does not requirement your residual income to be 150% regardless of what your DTI is. VA also doesn't require 2 compensating factors for a 45% debt ratio.
You're file is being manually underwritten which is why the lender is "requiring" (it is this lender, not VA) the residual at 150% plus an additional compensating factor in order to feel comfortable approving you for a loan.
This is an example of a investor/lender overlay. Another example would be credit score requirements. VA does not have a minimum credit score requirement in their guidelines so it's up to the lender to establish their own. Your lender requires a 620 mid score while others will go down to 580.
It really sounds like you should get a 2nd opinion.
Thank you for your reply. I will wait and talk to my LO on Monday, and make sure what the assistant was saying is indeed true. The LO said in the beginning that my residual would not be an issue. So we shall see.
Again, thank you for taking the time to respond!
Who will go own to 580 on VA?
@DisabledNavyVet wrote:Who will go own to 580 on VA?
I have tp PM you that due to the forum rules.