Cannot Use income for VA Home Loan!? I Don't Get It

[Anonymous]

Hello,

My wife an I were pre approved for a $350k loan, but only with my income on file. Currently, My credit score is 656 (myfico 8 socre is 690) and my yearly salary is $67,000. With my wife's salary, we have a total yearly salary of over $100,000. The lender told me he will still use my wife's salary information, but he can't use her credit score or cant add her current salary to the application because she does not have 2 years worth of work history. My DTI ratio is %53 if we only use my income, but with my wife's income added, our DTI is 32%. I'm not sure what kind of magic the lender from Veterans United will use in order to get the 'OK' from the VA.. but I'm a bit worried that this will be an issue for the VA (since he is only goign to submit my information to the VA).  The lender said I should be fine, since he is the lender, and he has enough information from my wife and I... but I'm not sure how this all ties in to the VA approving the application, without seeing my wife's salary/credit score information. My wife's mortgage fico score is 711. The $350k loan has an interest of 3.6% . I have no idea how the VA will accept only my $67,000 income for a $350,000 loan.

Can someone please fill me in on what might happen in this kind of situation? Or why the lender is telling me it should not be a problem. The reason why my wife has less than 2 years of employment is because she is originally from Brazil, and was not working in the U.S for a while, since she was not able to do so, under certain conditions..we both have a bachelors degree. Thank you!

[NC_Mtg_Loaner]

Check with your lender and see what he says, but it's likely that because your wife hasn't filed taxes here in the states for the last two years (or however many years your lender needs proof of taxes/income).

At least that would be my hypothesis.

[Anonymous]

Yeah, but how is he able to preapprove us for $350k, with only my $67k income ? My assumption is that the VA is going to come back and not approve this for the lender

[Anonymous]

Who is your lender? We had something similar.

[Anonymous]

Veteran united. Did your process go smooth?

[JVille]

What does your wife do??? How long has she been on the job? You wife’s income, depending on these 2 answers is very likely a very strong compensating factors.

[Mortgage-Specialist]

As most lenders are strict, there are some lenders who go up into the 60's% debt ratio range for VA loans. This is a lot more common than you think. FHA is still has a max debt ratio of 56.99%  and conventional is 50%...  These high debt ratios are approved a LOT more often than you'd think. They find their way over to my desk - typically after they've been turned down elsewhere. 

If your loan officer said they can accomplish a 53% debt ratio, there shouldnt be any reason for you to assume otherwise... The VA fully allows this.  

[homeloanexpert]

I have closed hundreds of  VA Loans over the 50% DTI. Remember on a VA loan, it's not about the DTI. it's all about the "Residual".

[VALoanMaster]

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@Anonymous wrote:

Hello,

My wife an I were pre approved for a $350k loan, but only with my income on file. Currently, My credit score is 656 (myfico 8 socre is 690) and my yearly salary is $67,000. With my wife's salary, we have a total yearly salary of over $100,000. The lender told me he will still use my wife's salary information, but he can't use her credit score or cant add her current salary to the application because she does not have 2 years worth of work history. My DTI ratio is %53 if we only use my income, but with my wife's income added, our DTI is 32%. I'm not sure what kind of magic the lender from Veterans United will use in order to get the 'OK' from the VA.. but I'm a bit worried that this will be an issue for the VA (since he is only goign to submit my information to the VA).  The lender said I should be fine, since he is the lender, and he has enough information from my wife and I... but I'm not sure how this all ties in to the VA approving the application, without seeing my wife's salary/credit score information. My wife's mortgage fico score is 711. The $350k loan has an interest of 3.6% . I have no idea how the VA will accept only my $67,000 income for a $350,000 loan.

Can someone please fill me in on what might happen in this kind of situation? Or why the lender is telling me it should not be a problem. The reason why my wife has less than 2 years of employment is because she is originally from Brazil, and was not working in the U.S for a while, since she was not able to do so, under certain conditions..we both have a bachelors degree. Thank you!

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Hi VaLoanSearch,

A 53% DTI is totally fine with VA as long as you have enough residual income. I had one Veteran with a 74% debt ratio get approved.

Here is the real question.

Do you want your wife on the loan?

If so, you'll need to go with a different lender.

Here are the actual VA guidelines:
Non-Military Employment:
Verify a minimum of 2 years of employment. Generally, in the borrower’s
current position, 2 years of employment is a positive indicator of continued
employment.
If the borrower has been employed by the present employer less than 2 years:
• verify prior employment, plus present employment covering a total of
2 years, or
• provide an explanation of why 2 years of employment could not be
verified,
• compare any different types of employment verifications obtained
(such as Verification of Employment (VOE), paystub(s), W2s, and tax
returns) for consistency, and
• clarify any substantial differences in the data that would have a bearing
on the qualification of the borrower(s).

So as you can see, VA does allow some leeway on the 2 year history that would allow me to get your VA loan approved with your wife on the loan.