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New Member
NW13
Posts: 3
Registered: ‎02-19-2013
0

VA loan expectation help

Our current numbers pulled off scorewatch:

 

Fico equi trans exp
675 685 618 672
641 661 584 609
 
gross income ~135k, 50k in cash account
 
we have 3 cards between us with total limit of $1300 and zero Balance. Both with same employers for 5+ years, same rental at $1600 for 7 years. No loans. 
 
We want to get pre approved for a VA loan up to 400k. Are we there now? Any idea of current rates Given our circumstances? 
Valued Member
Vwaller72
Posts: 43
Registered: ‎08-01-2012
0

Re: VA loan expectation help

I had no problem getting approved for the VA max of 417k and you're in better shape than I am all the way around. I'd say you should have no issue at all. 

Current scores EX: 678 (lender pull), MyFICO TU: 696 & EQ: 664
Member
AVierra
Posts: 9
Registered: ‎11-26-2012
0

Re: VA loan expectation help

[ Edited ]

Thank you for your service...

 

A few things about VA financing that should help ( I provide these loans for a living...so I know a little about them;-):

  1. All things equal, for a Vet who qualifies, the VA loan is usually the best option for a multitude of reasons...
  2. The VA doesn't lend money.  The bank/lender underwrites/provides the money to purchase  a home; VA provides an insurance policy to provide protection to the lender should the borrower default on their loan.
  3. VA has no minimum FICO requirement, but most lenders require a min. 620 FICO (the lowest middle score between both spouse's scores).
  4. An approval for a loan--in addition to the FICO--is based on the debt-to-income ratio.  This is calculated by taking the sum of the borrower's minimum monthly debt payments--credit cards; cars; student loans; mortgages, etc.(from the credit report), plus the new monthly house payment (principle + interest + monthly property taxes + monthly home owner's insurance).  This total is divided by the borrowers' monthly gross income.  As a rule of thumb, if the ratio is below 45%, there's a great chance for approval.
  5. VA loans have no monthly mortgage insurance, even though no down-payment is required
  6. Lower Closing costs than other loans:  Closing costs (most) are not allowed to be paid by the veteran and are covered by either the seller or a rate-credit from the lender.
  7.   Rates are lower than other loan options, especially when you consider that no down payment is required.
  8.   "No Down-Payment":  The option to not have a down-payment is determined by the VA by their VA County Loan Limit.  So long as your purchase price is below that limit, no down payment is required.

Hope this helps.

New Member
NW13
Posts: 3
Registered: ‎02-19-2013
0

Re: VA loan expectation help

Thanks for the help, it is much appreciated. 

 

I made a call today just to kick the tires so to speak. An agent I talked too suggested my wife's mid score of 609 might be an issue despite her fico score being 641. They wanted a 620 mid score. Then she went on to say that when they pull it they may get different numbers. Am I really that close to being oVer the edge?

 

lastly, a house we are looking at is a BOA forclosure and they are requiring all offers to be pre qualified with BoA.  From what I read we will not be required to finance through BOA but I don't want them to reject me while someone else is covering the loan. Comments?

Member
AVierra
Posts: 9
Registered: ‎11-26-2012
0

Re: VA loan expectation help

The score the lender pulls will most likely be different than the  one you get when you get your own scores.  This is due to the mortgage companies using a different scoring model.

 

A 620 mid score (you both get three scores; the lowest "middle" score is the one they'll use to underwrite the loan, BUT, for VA they only need your wife's score if they're using her income to help you qualify.  If you can qualify using just your income, but cover her debts along with yours (this is the rule in CA, which is a Community Property state), her score shouldn't matter.

 

Re the BofA prequal: Go ahead and let them run the numbers...they'll most likely do it over the phone and issue you a letter regarding qualifying.  Use this letter to make your offer.  You won't have to use them for your financing. :smileyhappy:

 

They'll need to run a credit report, but that's okay:  A credit report run for a mortgage is not seen as a problem on scores like it would be if you were applying to finance furniture or a TV.  In fact, according to credit bureaus I work with, you can have your credit run multiple times in a 30 day period in search of a mortgage and it counts against your FICO as only having been run 1 time.  The theory being you'll only end up with one mortgage, but you could end up with lots of furniture/TV's, etc. 

 

My advice on VA financing:  Find someone that is a VA Loan Specialist--not must that their bank can do VA loans--but a Loan Officer that has personally done many VA loans (more than 10, maybe).  There's some littly quirky things about a VA loan that, for a seasoned professional don't create a problem, but that would prove an irritant to you and your agent if the Loan Officer is learning the VA loan, while working with you.

New Member
RobP343
Posts: 20
Registered: ‎02-16-2013
0

Re: VA loan expectation help

You will need to be at a 620 mid score in order to obtain a VA loan from virtually every lender out there. There is just no secondary market for these loans at a score below 620 mid. Everything else you listed sounded perfectly in order. 

 

Only issue that could come up with a VA loan on a foreclosure.. is that if there are any safety issues currently, VA will require the owner to repair, which can be an issue on a foreclosure. 

 

Best of luck!

14 years in the mortgage business, and over 3,000 closed loans.
New Member
NW13
Posts: 3
Registered: ‎02-19-2013
0

Re: VA loan expectation help

Update

This recent process started with the intent to start looking for a home consisting of the research and prep work that is needed. My original post was a couple of days after we spent a couple of hours doing driving by some neighborhoods and specific properties. We really liked one that we saw from the street and it was our last of the day. Three days later we had engaged an agent. 6 days later we walked it. 8 days later we submitted a bid. 11 days from initially seeing it from the street and shockingly fast we had a signed agreement.

BOA pre qual took me 15 minutes before I had my letter. It helped greatly that they were my bank. I know the pre qual means nothing but I needed it from BOA for my offer to be considered.

Mid score on wife below 620 is seen as problematic so I am going it alone on the loan. It looks like the ratios are fine for me to support this. I've submitted everything asked and application is with underwriting. No surprises with the inspection. Appraisal is ordered. Current close date was set at the end of April. Hopefully that will move up.

Interesting thing with how this went. Due to the seller (bank) recently dropping yet another 10% off making it over 20% off the original listing price that was market based we picked up a good share of the closing costs. I am not unhappy about it as the value is 40% off the original sales price in 2006 whereas our market is 20% down from the 2006 high. But we just bumped our offer up with the provision that the seller picks up all closing. So, the net to the seller is effectively the same but I get closing rolled into my VA loan. The only catch to this is that the home has to appraise for the higher amount. My agent said she hadn't tried doing this in years because the appraisal number can be hard to get. She says the bank that owns would not normally agree to it if there appraisal data did not support it. She says foreclosures on the market get appraised monthly as part of their sales. My loan officer got worried when he saw this but was cool with it after he talked with her. I think it's fine and still at least 10% below appraisal.

So, clueless me. I get a call from the LO offering options and it seems like the closing cost roll in is a masterstroke. The amount of money in it is enough to cover everything and buy down a point to get a rate of 3.25%. Right now on paper I can show up at closing with no cash due and walk away with $200! In reality I know I will not work out that way because his tax escrow estimate is a little low.

Keeping fingers crossed for real approval and I can get dream house well under market with no cash in. :smileyhappy:
Valued Contributor
JM-AM
Posts: 3,302
Registered: ‎06-09-2010
0

Re: VA loan expectation help

Good luck
Good Luck
May all your dreams and wishes become a reality!

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