topic Re: Conflicting Information about VA Loans in Mortgage Loans

Conflicting Information about VA Loans

Anonymous — Fri, 31 May 2019 15:00:18 GMT

I'm planning on buying a house using a VA Loan in January/February. I've done a lot of research but there's so much conflicting information across the web.

1. How much does your credit score influence your interest rates for a VA loan?

I know the VA puts more emphasis on other areas (DTI) but obviously your credit score does come into play with the lenders. Just not sure how much impact it has on rates. My current (real) FICO 2 scores are 708, 701, 720. (No collections left since I got the UoP one taken care of, 8% UTL, but 4 lates from between 2013-2015)

2. Are VA lenders typically as sensitive to inquiries/new credit compared to conventional loans?

I picked up one card in April and would like to pick up one more before the end of June. That would allow both to age past 6 months. Both for legitmate value, not just to have them.

Re: Conflicting Information about VA Loans

homeloanexpert — Sat, 01 Jun 2019 13:15:52 GMT

Hello my fellow Vet,

Good to hear you are wanting to become a homeowner soon. Let me give you my 2 cents.

1. How much does your credit score influence your interest rates for a VA loan?

A: Your credit scores are a huge factor when applying for a loan. With a 700+ credit score you will not face the same challenges a borrower with a 580. The VA loan is a unique loan program. It's not all about the DTI like others loans. The Residual is the main focus. Believe it or not, I have funded 100's of loans over the years with DTI's in the high 50% range, and some even higher. Your Residual is the key. With no collections, low UTL, and good scores you should be a piece of cake.

2. Are VA lenders typically as sensitive to inquiries/new credit compared to conventional loans?

I picked up one card in April and would like to pick up one more before the end of June. That would allow both to age past 6 months. Both for legitmate value, not just to have them.

A: Any derogatory credit will need to be explained if the AUS (automated underwriting system) findings call out for it. Some lenders who don't follow the AUS may still require and LOE (letter of explanation). Inquiries are not no big deal but will need to be explained for the mere fact that the lender will want to make sure you haven't opened any new accounts that may not show up on your credit yet.

In summary, you appear to be a perfect candidate (creditwise) for a VA home loan.

Best wishes to you!

Re: Conflicting Information about VA Loans

Anonymous — Wed, 05 Jun 2019 19:51:05 GMT

Many thanks!

Another (hopefully) quick question. My Apartment lease comes up for renewal next year . At that point I can change the lease to month to month.

Do I need to wait until it converts to month by month? I've read that you need to wait until that point otherwise it'll be factored in with your residual income.

Re: Conflicting Information about VA Loans

Anonymous — Thu, 06 Jun 2019 22:01:59 GMT

I can answer that cause we’re literally closing right now. No they dont use your rental income as residual. Were in a lease right now till September 1st & were actually just paying it off. I gave the apartments notice today. So banks wanna make sure that you can pay bills on time they may look at that thats all! Hope that helps!