VA DTI Guidelines On Over 60% Debt To Income Ratios
This BLOG On VA DTI Guidelines On Over 60% Debt To Income Ratios Was PUBLISHED On April 8th, 2019
VA Loans is the best loan program in the United States. The Department of Veterans Affairs is in charge of VA Loans.
- Only eligible active and/or retired members of the United States Armed Services with a valid Certificate of Eligibility (COE) and surviving spouses are eligible to qualify for VA Home Loans
- Per VA DTI Guidelines, there is no maximum DTI cap on VA Loans as long as borrowers can get an approve/eligible per automated underwriting system
- Gustan Cho Associates have approved and closed countless of VA Loans with borrowers with over 60% debt to income ratios or higher
- VA DTI Guidelines states that the VA does not require DTI Caps
- As long as borrowers have a lot of residual income, I have seen automated approvals with DTI’s as high as 65%
- VA caps is up to the individual mortgage lender
- All lenders need to meet minimum VA Agency Guidelines
- However, every lender can implement higher standards
- These higher credit/income standards implemented by individual lenders are called lender overlays
In this blog, we will discuss VA DTI Guidelines on over 60% debt to income ratio borrowers.
VA DTI Guidelines Versus Lender Overlays
VA DTI Guidelines does not particularly state a maximum debt to income ratio requirement.
- It is up to the automated underwriting system to render an automated approval
- As long as borrowers have strong residual income and decent credit, the AUS will render an automated approval
- However, many lenders will have their own lender overlays
- What overlays mean is a higher credit/income requirement on top of the minimum guidelines set by the Department of Veterans Affairs
- This is why certain lenders may require higher credit scores
- Many lenders may require debt to income ratios between 41% to 50% on VA Loans
- Unfortunately, many borrowers who are told they do not qualify for VA Loans due to their DTI are often not told they meet VA Guidelines but not with them
This is unfortunate. Gustan Cho Associates at Loan Cabin Inc. are direct lenders and have no overlays on VA Home Loans.
Automated Versus Manual Underwriting
VA DTI Guidelines are different on automated versus manual underwriting.
- VA does not have any caps on debt to income ratios on automated underwriting system (AUS) findings
- However, there is a maximum debt to income ratio cap of 50% DTI on VA manual underwriting guidelines
- Mortgage underwriters can exceed the 50% DTI Guidelines with two or more compensating factors
- Borrowers who are currently in a Chapter 13 Bankruptcy repayment plan can qualify for VA Loans just one year into the plan via manual underwriting
There is no waiting period to qualify for VA Loans after a Chapter 13 Bankruptcy discharged date. However, any bankruptcies not seasoned for at least two years needs to be manually underwritten.
Qualifying For VA Home Mortgage With Direct Lender With No Overlays
Home buyers who are running into hurdles in qualifying for VA Home Loans due to lender overlays can contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at email@example.com. We are direct lenders with no overlays on government and conventional loans. We are also mortgage experts on non-qm and bank statement loans for self-employed borrowers. The Gustan Cho Team is available 7 days a week, evenings, weekends, and holidays.