A VA loan borrower must qualify for the loan according to set debt ratios. These are used to determine whether the borrower can reasonable be expected to meet his obligations.

Debt Ratios for VA Loans

Helping Veterans Keep Their Homes

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.

VA Loan News, Guidelines, and Information for Veterans

:: VA Guaranty and a VA Loan--Is There a Difference?

Many assume the VA provides the money for a VA guaranteed loan, but private banks issue the actual VA mortgage—no money comes from the VA unless the buyer defaults and goes into foreclosure.

:: VA Loan Assumption

Active duty military members facing PCS moves or veterans who want to sell an old home and buy a new one are often faced selling their home before the VA loan is paid in full.

:: VA Loan Eligibility After a Military Spouse's Death

Death benefits connected to VA loans are intended for surviving spouses only. They are not extended to other family members including siblings or children.

ADDITIONAL ARTICLES