Qualify for VA Mortgage Loan
October 13, 2008 by Eleanor
Filed under First Time Home Buyer, VA Mortgage Loans
There’s the WHITE HOUSE, and then there’s that white house, with the picket fence and the dog out back, and a couple of shade trees where you can string up a hammock.
If you’ve been in the Armed Services, and you’re looking for that special house – you have a TON of things working to your advantage!
- You are eligable for a 100% loan with NO monthly PMI! The mortgage insurance companies have taken a beating with all of the foreclosures – and monthly PMI is running ridiculously high right now! (over $200 a month!)
- Did I mention it’s a 100% loan??? We are in a RARE appreciating market here in the Triangle – and if you are planning on staying in your home for 3 or 4 years, you could be in a GREAT position to build some equity!
- Interest Rates are STILL at their LOWEST point! Which makes homeownership more affordable than ever!
- There are a TON of homes for sale- meaning you will probably get a very good “deal” on a home!!
Okay – to qualify for this mortgage loan here’s what you need!
You need decent credit. VA minimum credit score is unpublished. This means that you are either “accepted” through the computerized underwriting system – or you’re not. Most of the approvals we are getting make us believe that you need a score of AT LEAST 580 on each of the three bureaus. At the very lesat, the VA wants you to have 12 months of “clean credit.” If you don’t have that, or you have questions about how to increase your credit scores yourself – click here. (you do not need to pay someone!)
You need a job (or a source of income lasting at least 4 more years). Not just a job – but one we can verify the income on. If you are a fireman, and a painter – and you make decent income working as a painter, but don’t report all of that income to Uncle Sam – I can’t use all of that income to qualify you. It’s as simple as that.
If you are going to purchase a home with another person who is NOT a Veteran, you must be MARRIED. For more information on Co-Signors for VA mortgage loans, click here.
Your total debt is calculated a little differently for a VA mortgage loan. To calculate the MOST you can qualify for… add up the Principal, Interest Taxes and Insurance. ADD to that the “average” monthly Utility cost, any revolving debt you have with more than 3 months left to pay, any installment debt with more than 3 or 4 months left, and any child care expenses. That TOTAL NUMBER should not be more than 41% of you GROSS (before taxes) income on a monthly basis.
Example: PITI is $1020. Heating Bill will average $120. Credit Cards are paid in full each month, so zero. Car payment is $375, no children. Total monthly bills $1515.00. Your monthly BEFORE TAX income is $4000. You take $1515, divide that by $4000 and it’s 37.9. This number is well below the target number of 41, so you’re GOLDEN!
If you are a Veteran considering a home purchase in North Carolina – please call us! Steve and Eleanor Thorne, First Financial Services, Inc 919-649-5058
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Tim Ramsey
This was very interesting and helpful. Deciding on a mortgage loan can be a bit scary and it’s good to have as much information as possible before making a decision. Thanks for the tips.
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