VA Credit Score And DTI Guidelines On Purchase And Refinance

We can help you qualify for a purchase or refinance VA loan with no lender overlays. Apply NOW with Gustan Cho Associates and leave it to us.

VA Credit Score And DTI Guidelines On Purchase And Refinance:

Per VA Credit Score And DTI Guidelines, there are no minimum credit score requirements. Also, per VA Credit Score And DTI Guidelines, there are no maximum debt-to-income ratio requirements. As long as borrowers can get an approve/eligible per automated underwriting system, borrowers can qualify for VA Loans with a lender with no overlays. Unfortunately, most lenders have overlays on VA Loans. Gustan Cho Associates is a mortgage company licensed in multiple states with no lender overlays on VA Loans.

As long as borrowers get an automated underwriting system approval and can meet the conditions of AUS, our borrowers will close their VA loans.

VA Credit Score And DTI Guidelines And Requirements

What is a VA credit score and DTI guidelines and requirements

Here are general VA Lending Guidelines:

  • No down payment required
  • 100% financing on VA Home Loans
  • No monthly mortgage insurance required
  • No minimum credit score with AUS Approval
  • No maximum debt to income ratio requirements with AUS Approval
  • Gustan Cho Associates recently closed a VA Loan for a borrower with 504 FICO and 64% debt-to-income-ratio
  • Minimum credit score requirements are set by individual lenders as part of their overlays
  • Maximum DTI caps are set by individual lenders as part of their overlays
  • Gustan Cho Associates has zero overlays on VA Loans

There are no maximum loan limits on VA loans. There are 220 counties in the United States where VA loans are considered high-cost areas.  The 220 counties are classified as high-cost areas that have higher home values than traditional areas.

Who Can Qualify For VA Loans

The United States Department of Veterans Affairs is the federal agency that insures and guarantees VA Loans originated and funded by lenders.

  • VA is not a lender
  • It acts as a federal agency that partially insures loans to lenders who follow VA Guidelines on VA Loans

This is why private lenders can offer veterans with a VA certificate of eligibility (COE) 100% financing at great mortgage rates. COE is also known as DD214.

Here are the general service duty requirements mandated by VA:

  • Active-duty and retired members of the U.S. Military with valid Certificate Of Eligibility
  • 90 days of consecutive active duty service
  • Members in the reserves and/or National Guard, need 6 years of service
  • 181 days of active duty during peacetime
  • Honorable discharge

VA Debt To Income Ratio Guidelines Versus Lender Overlays

What are the guidelines for the debt-to-income ratio of VA and the outlays on lenders

Many borrowers are often told by lenders that debt to income ratios to qualify for VA Loans is 620 to 640.

  • This is the particular lender’s requirements and not VA Guidelines
  • VA does not have any limits on debt to income ratios
  • Typically, lenders may limit DTI at 41% to 50%
  • Gustan Cho Associates has no lender overlays on VA Loans
  • We recently closed a borrower with 65% debt to income ratios

The automated underwriting system will analyze the borrower’s overall credit and income profile and render an automated approval.

VA Funding Fee

VA does not have an annual mortgage insurance premium. However, VA Loans have VA Funding Fee which is similar to the upfront FHA Mortgage Insurance Premium. Below is the VA Funding Fee Chart for 2021:

VA Funding Fee Chart for 2021:

Type of Veteran Down
Payment
Percentage
for First
Time Use
Percentage
for
Subsequent
Use
Regular Military 0% – 4.99%
5% – 9.99%
10% or more
2.15%
1.50%
1.25%
3.30% †
1.50%
1.25%
Reserves/National
Guard
0% – 4.99%
5% – 9.99%
10% or more
2.40%
1.75%
1.50%
3.30% †
1.75%
1.50%

VA Funding Fee Refinance Chart On Rate/Term or Cash/Out

Type of Veteran Percentage for First
Time Use
Percentage for
Subsequent Use
Regular Military 2.15% 3.3% †
Reserves/National
Guard
2.4% 3.3% †

VA Funding Fee Refinance Chart On IRRRL’S

Type of Loan The Percentage for Either Type of Veteran Whether First
Time of Subsequent Use
Interest Rate Reduction
Refinancing
0.50%

VA Credit Score And DTI Guidelines: Cash-Out Refinance

VA is the only loan program that allows homeowners to do a 90% loan-to-value cash-out refinance.

  • Homeowners can use the cash-out proceeds for whatever needs
  • Refinance rates on cash-out refinance VA mortgages are higher than rate and term refinances

VA cash-out refinances are full credit/income mortgage loans. A new appraisal is required.

VA Interest Rate Reduction Refinance Loans:

VA Interest Rate Reduction Refinance Loan also referred to as IRRRL, allows homeowners to refinance their current VA Loan into another VA Loan with lower rates. It is a streamlined mortgage process. No income documentation is required. No home appraisal is required. No late payments on their VA Loan in the past 12 months.

To qualify for VA Loan with a direct lender with no overlays, please contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at [email protected] We are available 7 days a week, evenings, weekends, and holidays.

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