Va auto underwriting

[tjc]

I'm looking to go with a va loan. I have a few questions. I spoke with a lender today and he told me that if you cannot pass auto underwriting then you will not get approved. I have some baddies on my credit and am wondering if any of these would force a manual underwriting. My utilization is high at the moment, I have one collection that is paid for 198 that went into collection in sept of 2011. I have a home equity line of credit that I settled on in 4/10. I also have a charge off of $87 for a car that was paid 9/10. On my wife's side there is a collection 12/10 for 2000 that has not been paid. My score is currently 634 and my wife's is 636.

We will be selling our house that will net 25k.... With that we plan on getting utilization under 15% and paying off my car note.

Any other suggestions on how to get us an auto underwriting approval?

[fabadvice]

Here are some guidelines I found. I hope they help.

Credit Score - Veterans Affairs (VA) insures VA loans and does not require a minimum FICO score. However, lenders have their own requirements that are in addition to those of the VA.

Most lenders today require the minimum mid-score in a tri-merge report to be at 620 or better. The credit report must clearly support an applicant’s ability to meet financial obligations in a timely, responsible manner.

Collections - VA loan requirements specify that most collection accounts outstanding must be paid, no matter what their age as long as they are currently delinquent and/or due and payable.

Late Payments - VA loan requirements does not allow for more than one debt payments being more than 30 days late if the incidents have occurred within the last 12 months. This includes more than one late payment on a single account. In addition, individual lenders may have restrictions on late payments made in the last 12 months.

Qualifying DTI Ratios - VA loan requirements allow for DTI ratios of 29% / 41%. These ratios may be slightly exceeded with acceptable Automatic Underwriting System (AUS) and underwriter's approval.

VA gives more value to the back ratio of 41%. This means that the total monthly debt payment with the new mortgage payment cannot exceed 41% of total gross monthly income. There are instances where you can exceed this ratio, however, strong compensating factors are required.