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VA Loan Facts
VA MORTGAGE DEBT-TO-INCOME RATIO
According to VA guidelines, borrowers and / or their spouse must qualify according to set
debt ratios which are used to determine whether the borrower can reasonable be expected
to meet the expenses involved with home ownership.
TOTAL FIXED PAYMENT TO EFFECTIVE INCOME
Add up the total mortgage payment (principal and interest, escrow deposits for taxes,
hazard insurance, homeowners' dues, etc.) and all recurring
monthly revolving and installment debt (car loans, personal loans, student loans, credit
cards, etc.). Then, take that amount and divide it by the gross monthly income. The
maximum ratio to qualify is 41%. In the event the number exceeds the 41%, the VA
has a residual income guideline which can allow approval, yet are not considered a
compensating factor.
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Total amount of new house payment: |
$650 |
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Total amount of monthly revolving debt: |
$300 |
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Total amount of monthly recurring debt: |
$950 |
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Borrower's gross monthly income (including spouse, if married): |
$2,400 |
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Divide total house payment by gross monthly income: |
$950/$2,400 |
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Debt to income ratio: |
39.58% |
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Please note that the above indicators do not exclusively determine whether or not a
veteran will qualify for a VA loan. Compensating factors may affect the loan decision.
These factors are especially important when reviewing loans which are marginal with respect
to residual income or debt-to-income ratio. They cannot be used to compensate for
unsatisfactory credit.
Some compensating factors include, but are not limited to the following:
- Excellent credit history
- Conservative use of consumer credit
- Minimal consumer debt
- Long-term employment
- Significant liquid assets
- Military benefits and more
FREQUENTLY ASKED QUESTION # 34 [ -more VA Loan questions- ]
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Q: Foreign Purchases - Can I purchase outside America?
A: The VA does not allow veteran mortgages for properties outside the United States. The VA does allow purchases in "American territories and possessions". These areas include Puerto Rico, Virgin Islands, American Samoa , Guam, and the Northern Mariana Islands. If your proposed purchase is in one of these areas, you should be able to apply in the usual ways, but check with your VA rep for any special requirements or conditions based on the laws which cover lending in those territories. (Our company, www.valoans.com, only originates VA home loans for properties in the United States.
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VA Loan Rates
for 5/13/2008
30 year fixed
-----------------
0.000 points
6.000%
6.110% APR
15 year fixed
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0.000 points
6.000%
6.190% APR
Life Insurance for Military Members
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- AIU Online
- Capella University
- DeVry University
- Kaplan University
- Westwood College
- Walden University
- Strayer University
- Virginia College
- Grand Canyon U.
- Grantham Univ.
- Jones Int'l Univ.
- South University
- Ellis College
- CTU Online
- Baker College
VALoans.com is a private company specializing in VA financing and is
not a government agency.
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