Can I Qualify For VA Loan With High DTI | 2023 VA Guidelines
In this blog, we will discuss and cover one of the most frequently asked questions we receive daily can I qualify for a VA loan with high DTI? VA loans are the best mortgage loan program in the United States. Dale Elenteny of Non-QM Mortgage Brokers issues the following statement about VA loans:
VA loans is the best mortgage loan program in the nation because there is no down payment requirements, no mortgage insurance premium, no maximum loan limit and has the lowest rates.
No down payment or monthly mortgage insurance premium on VA loans is required. Interest rates on VA mortgages are lower than any other loan program due to the government guarantee. The U.S. government limits VA loans for veteran borrowers only with a certificate of eligibility (COE). Veteran borrowers with high debt-to-income ratios and lower credit scores can qualify for a VA loan with high DTI.
Can I Qualify For VA Loan With High DTI
There are no debt-to-income ratio requirements on VA loans. So why do VA lenders turn veteran borrowers down due to high debt-to-income ratios? It is because most lenders have VA lender overlays on debt-to-income ratios. The answer is yes to the question Can I qualify For a VA loan with a high DTI? The Department of Veteran Affairs has one of the most lenient mortgage guidelines out of all mortgage loan programs.
Rewarding Veterans Due To Their Service To Our Country With VA Loans
The United States Department of Affairs realizes that members of the U.S. Armed Services have lower credit scores than civilian workers due to them having the chance of being deployed in wartime. Dale Elenteny of Non-QM Mortgage Brokers said the Veterans Administration realizes veterans have lower credit profiles than civilian homebuyers. Here is what Dale said:
Many veterans get deployed or get transferred from base to base. Therefore, it may be more difficult for veterans to pay timely on their debt payment than their civilian counterparts. Due to this reason, the Veterans Administration has lenient guidelines on VA loans.
How can veterans make timely monthly payments on their debt obligations when deployed during wartime and make their monthly mortgage payments on time when they are in combat? The Armed Services are well aware of this and have implemented many more different VA guidelines for veterans of the armed services.
How Can I Qualify For VA Loan With High DTI?
Can I qualify for a VA loan with high DTI? VA loans are the best residential mortgage loan programs out there. Not all borrowers qualify for a VA loan. Only United States Armed Services veterans with a Certificate of Eligibility can qualify for a VA loan.
How Can I Qualify For VA Loan With High DTI With Low Credit Scores?
VA loan requirements are very lenient. There are no minimum credit score requirements or maximum debt-to-income ratio to qualify for VA mortgage loans.
To qualify for VA loans, the borrower must have served in a branch of the United States Military. Veteran borrowers need an honorable discharge and a valid Certificate of Eligibility. A Certificate of Eligibility is also referred to as a COE. There are no debt-to-income ratio requirements with VA loans.
VA loan does have VA Residual Income Requirements. There is no maximum loan limit on VA loans. There are no minimum credit score requirements on VA loans.
VA Guidelines Versus Lender Overlays on VA Loans
The Department of Veteran Affairs (VA) has no debt-to-income ratio or credit score requirements. There are two different types of VA eligibility requirements. VA guidelines from the U.S. Department of Veteran Affairs. VA lender overlays are additional VA Lending Requirements implemented by each lender.
Just because a borrower meets VA guidelines does not mean they qualify with all lenders. Each lender can have its overlays on VA loans. For example, many Lenders may have overlays on DTI where they may cap it at 41%. They may also have overlays on credit scores where the lender may require a 620 credit score.
Non-QM Mortgage Brokers do not have any overlays on VA loans. One of our loan officers at Non-QM Mortgage Brokers recently closed a VA loan for a borrower with a 580 FICO credit score, a 59% debt-to-income ratio, and outstanding collection accounts.
Can I Qualify For VA Loan With High DTI With Than Perfect Credit?
Non-QM Mortgage Brokers has no overlays on VA loans. We go off the automated findings of the Automated Underwriting System (AUS). Only spouses of a veteran can become co-borrowers on VA loans. Borrowers do not have to pay off outstanding collections and charge-offs to qualify for VA loans. There is a two-year waiting period to qualify for a VA loan after a Chapter 7 Bankruptcy discharge date. There is a two-year waiting period to qualify for a VA loan after the following:
- Foreclosure
- Deed-in-lieu of foreclosure
- Short sale
Deferred student loans for over 12 months are exempt from debt-to-income ratio calculations.
Benefits of VA Loans
VA does not require any down payment on a home purchase and allows 100% financing. VA allows up to 100% cash-out refinance on single-family homes. VA home buyers do not have to worry about closing costs because closing costs can be covered with seller’s concessions or lender credit. VA allows up to 4% sellers concessions from home sellers and lenders, credit by the lender to cover closing costs.
Mortgage Insurance Guidelines on VA Loans
There is no annual VA mortgage insurance premium with VA loans. There is a funding fee with VA loans. However, a one-time funding fee can be rolled into the balance of the VA loan. VA loans have one of the lowest mortgage interest rates out of any loan program because of the guarantee by the Veterans Administration. VA loans are for one to four-unit owner-occupied properties only. Veterans cannot use VA entitlement on second homes or investment homes. Non-QM Mortgage Brokers close VA loans in 21 days or less.
Solutions on How Can I Qualify For VA Loan With High DTI?
Many of our viewers reading this blog are probably scratching their heads and confused because other VA Mortgage Companies or Banks told them the following with lender overlays.
Lender overlays are additional lending requirements above and beyond the minimum VA agency mortgage guidelines. The maximum debt-to-income ratio to qualify for VA loans required by most lenders is 41% DTI to 43% DTI.
The minimum credit score to qualify for a VA loan is 640. Borrowers cannot have any outstanding collection accounts or charge-off accounts to qualify for VA loans. You need a minimum of three credit tradelines to qualify for VA loans. The good news is Non-QM Mortgage Brokers have no lender overlays on VA loans. Over 80% of our clients at Non-QM Mortgage Brokers could not qualify at other lenders.
Can I Qualify For VA Loan With High DTI if Lender Says I do Not Qualify?
The above VA lending requirements are not those of the VA but are lender overlays. Non-QM Mortgage Brokers is a VA lender with no overlays on VA loans. Lenders can have overlays on VA loans and do not have to follow VA guidelines. Lenders do have to meet minimum VA guidelines, but lenders can have higher standards and requirements than VA guidelines.
Can I Qualify For VA Loan With High DTI After Chapter 13 Bankruptcy
Most Lenders have VA lender overlays with qualifying for VA loans During And After Chapter 13 Bankruptcy. Here are VA guidelines during & after Chapter 13 bankruptcy.
Veteran Borrowers can qualify for VA loans one year into a Chapter 13 Bankruptcy repayment plan. There is no waiting period after the Chapter 13 Bankruptcy discharge date to qualify for VA loans. Many of our borrowers at Non-QM Mortgage Brokers are veteran borrowers in a Chapter 13 Repayment Plan or just got their Chapter 13 Bankruptcy discharged.
Borrowers who meet VA lending guidelines but the lender they consulted with has VA lender overlays, stop looking further and call Non-QM Mortgage Brokers at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. Non-QM Mortgage Brokers do not have any lender overlays on VA loans. The team at Non-QM Mortgage Brokers is available evenings, weekends, and holidays seven days a week.
