Here are some miscellaneous items that I see often come up as issues when VA borrowers eligible for VA loan benefits apply for a VA Loan:
1. Remember in community property states like California, even if your spouse is not going on the loan with you, their credit report will still need to be submitted. Their debt obligations will have to be counted in your qualifying debt-to-income ratios. But remember, their credit quality cannot be a reason for the denial of the loan. So your spouse can have a very low credit score but it doesn’t matter if they aren’t going on the loan, all that matter is if they have a car loan, credit cards, student loans only in their name, those payments have to be counted as your debt as well.
2. Watch out for collections on your credit. If you have a creditor trying to collect on an old bill that is over $5,000, you may have to pay this before you can be approved for a VA loan.
3. If you are currently active military, to get a VA loan you will have to have 12 or months remaining with your service in the military. If you have less than 12 mos remaining, you have to have documentation of a civilian job lined up.
4. All VA homeloans require a clear termite report. When you a buy a property you must have a termite inspection done and all section 1 and 2 items must be cleared prior to the VA lending.
5. I just wanted to throw in here that many times I see large auto loans as a major reason borrowers can’t qualify for the amount of VA loan they would like. Many times VA home buyers will have two or more car loans and this really affects the purchase price of the house they can get. My advice is to try and buy a smaller car with cash or go with one car until after you have the house. A house is a much better investment than a car.
6. Make sure you never miss a payment on any of your bills. VA loan credit requirements require you to have a 620 or greater middle credit score to get the better VA interest rates. However you can still get a VA loan with a 600 score.
So those are six areas to look out for when preparing to apply for a VA loan. Here are some highlights of VA financing:
- 100% financing…VA borrowers are very lucky because there is really no 100% financing left out there unless you are VA eligible
- VA loan interest rates are at historic lows
- VA loan is flexible and will work with you on credit issues
- Conventional loans require 41% debt-to-income ratios if you have less than 20% down, VA loans will allow upwards of 55% debt-to-income ratios
- VA loans allow the seller to pay 100% of your closing costs
- VA loan streamline refinances allow you to lower your interest rate easily once you have a VA loan
- VA loans are assumable by other VA borrowers, making it easier to sell down the road
- VA loan limits in many areas of California are over $650,000 with 100% financing!
Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions or want to apply for a VA loan.
Warmest Regards,
Rob Chomentowski
Sr. Loan Officer (and VA specialist)
858-922-7899
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