VA loan approval with lates???

[Anonymous]

I was late last year on my auto loan (about 6-7 months ago), and I was just pre approved for a VA loan. HOWEVER, Im nervous about the underwriting process due to things that I have been reading about not having any lates for 12 months. My health declined from 2012 to the beginning of 2014. Once I became 100%, I started paying off medical bills before they reported. Once everything was caught up, I started catching up my auto loan. Well this was only in November/December. I only have one unpaid collection account, which I have a payment arrangement on. I also have one judgement that I got during my health crisis, but this will be paid in full on next week.

My loan officer didn't say anything about my late payment, but did say the judgment had to be paid prior to closing. She said she has saw worse credit be approved. That still doesn't make me feel better because I know I have a late payment. My DTI is extremely low and my only obligation is my auto loan and one small loan.

Will that late payment hinder me?

[Anonymous]

VA loans allow for one late (more than 30 days) in the last 12 months, as long as it was not a late mortgage payment. If it was an auto loan and it was only one late in the last 12 months you should be fine.

As always, the lender may have additional or stricter guidelines than the VA, so you do have to meet the requirements of both.

[Anonymous]

I think that is going to stop me then because I just caught everything up 7 months ago. It was late majority of 2014 due to my inability to work. I have everything from my earning statement from Social Security and documentation from the VA regarding me being unemployable due to health. My past landlord can also vouch for me since I was never late for the 3 years I was staying there.

[Anonymous]

OK - so your auto loan was late more than once in the past 12 months? Is that the only tradeline that was late? What are your mortgage scores? Are you now employed? How long have you been at your current job? A lot of questions, I know, but the answers are important in trying to understand your current situation.

[Anonymous]

Middle score is 609. Lender does VA loans down to 550. That is the only tradeline that was late. Credit cards never reported late with low balances. I am 100% P&T from the VA.

[Anonymous]

I think you'll be OK since it's only 1 tradeline and you have documented health issues that prevented employment for a while, which absolutely explains why you were late. The VA asks its lenders to look at the "big picture" when evaluating VA loan apps, and if you're currently in good shape except for the auto lates you have a good chance of making it through underwriting.

Sending good vibes your way.

[Anonymous]

I was going to add, but ended up stepping away from the computer. My credit report doesn't have much on it since 60k in student loans were discharged, so my debt to income is really low except for my auto loan and small loans. I have a paid in full judgment, and 2 paid collections. 6 credit cards that have never been late, and 2 personal loans that have never been late. Again, everything stemmed from my inability to work.

[Anonymous]

What happened with this, were you approved?