VA DTI Mortgage Calculator

Mortgage borrowers eligible for VA loans can calculate their debt-to-income ratio. The Veterans Administration, or VA, does not have a specific debt-to-income ratio cap on VA loans. Borrowers can get an approve/eligible per automated underwriting system (AUS) with over 60% DTI and lower credit scores as long as they have strong residual income.

The Veterans Administration allows for manual underwriting on VA loans. The difference between automated approval per AUS and manual underwriting is the cap on DTI with manual underwrites.

VA manual underwriting restricts the debt-to-income ratio. You can use the VA DTI Mortgage Calculator to calculate your front-end and back-end debt-to-income ratio for manual underwriting for VA loans.

What Is Manual Underwriting on VA Loans

If you are a first-time homebuyer using your VA eligibility for the first time, one of the questions may be what manual underwriting means. FHA and VA loans are the only two mortgage loan programs that allow manual underwriting. There are two types of VA mortgage loan processes. The first and most common VA loan approval process is when the borrowers get an automated approval per AUS.

Why Would a VA Loan Be Manually Underwritten?

One of borrowers’ most frequently asked questions on VA loans is why a mortgage loan would be manually underwritten. One of the main reasons a VA loan is manually underwritten is when the borrower has no credit lines or scores.

If a borrower has no active credit tradelines, the borrower may not have a credit score reporting on credit bureaus.

Mortgage underwriters can use non-traditional credit tradelines for borrowers who do not have traditional credit tradelines reporting on the credit bureaus. Use the VA DTI Mortgage Calculator powered by Gustan Cho Associates to determine your debt-to-income ratio.

What Triggers a Manual Underwrite?

A borrower with an approve/eligible per the automated underwriting system (AUS) can be downgraded to a manual underwrite on a VA loan.

Mortgage underwriters have full underwriter discretion to trigger a manual underwrite on a file that has been AUS-approved.

Suppose the mortgage underwriter finds inconsistent income, little to no assets, substantial liability compared to income, or substantial collection and charged-off accounts. In that case, the file may be downgraded to a manual underwrite.

What Happens If I Cannot Get an Approve/Eligible Per Automated Underwriting System (AUS)

If the borrower does not get an approve/eligible per the automated underwriting system and gets a refer/eligible per AUS findings, the file can be manually underwritten.

Manual underwriting is when a human mortgage underwriter is assigned and thoroughly underwrites the file.

The mortgage underwriter will be more thorough on manual underwrites when reviewing the borrower’s credit, credit history, income history, and ability to pay the new mortgage loan. Use the VA DTI Calculator to determine your debt-to-income ratio on manual underwriting.

Is Verification of Rent Mandatory on Manual Underwriting on VA Loans?

In general, all manual underwrites require verification of rent.  The mortgage underwriter will review the borrower’s current rental payment history and require verification of rent (VOR).

The difference between what the borrower is paying in rent and the new housing payment on the home purchase is called payment shock.

A 5% or less payment shock is considered a strong compensating factor. How about when homebuyers live rent-free with family to save rent? In cases where borrowers are living rent-free, Gustan Cho Associates will waive rental verification if they can get a living rent-free letter from the person who owns the home. The lender will provide the rent-free letter.

QUICK USEFUL LINK: VA Guidelines on Verification of Rent on Manual Underwriting

VA DTI Manual Underwriting Guidelines

The VA front-end and back-end mortgage calculators meet the maximum 46.9% front-end and 56.9% back-end debt-to-income ratio cap on VA loans.

The VA DTI Mortgage Calculator, powered by Gustan Cho Associates, has been designed for users to calculate their DTI in seconds.

There is no need to keep contacting your loan officer whenever there is a change in numbers while shopping for a home. Every mortgage loan program has its own front-end and back-end debt-to-income ratio requirements. With the VA DTI Mortgage Calculator, users can calculate the debt-to-income ratio for AUS-approved and manual underwriting VA loans.

QUICK USEFUL LINK: VA DTI Manual Underwriting Guidelines

What is the DTI Ratio for a VA home Loan?

VA DTI guidelines on VA LOANS for borrowers with 580 credit scores and higher, the maximum front-end debt to income ratio is 46.9% front-end and 56.9% back-end. VA guidelines on debt-to-income ratio requirements mandate a maximum ratio of 31% front-end and 43% back-end for borrowers under 580 FICO and down to 500 credit scores on VA LOANS. Use the VA DTI Mortgage Calculator powered by Gustan Cho Associates to calculate your debt-to-income ratio.

VA DTI Guidelines on Manual Underwriting

Borrowers can use the VA DTI Mortgage Calculator to calculate their front-end and back-end debt-to-income ratio for VA manual underwriting. VA and VA loans are the only two programs allowing manual underwriting. The maximum debt-to-income ratio on VA manual underwriting is as follows:

1. 31% front-end and 43% back-end with zero compensating factor
2. 37% front-end and 47% back-end, with one compensating factor
3. 40% front-end and 50% back-end, with two compensating factors

Using The VA DTI Mortgage Calculator To Calculate If You Qualify

The VA DTI Mortgage Calculator at Gustan Cho Associates has been custom-designed to get the most accurate front-end and back-end DTI used by mortgage underwriters. No DTI mortgage calculator in the nation compares to the debt-to-income ratio mortgage calculator powered by Gustan Cho Associates. The next paragraph will cover the minimum agency mortgage guidelines on debt-to-income ratio caps.

Do All Lenders Have The Same DTI Requirements on VA LOANS?

Government and conventional loans have a set maximum DTI cap on their mortgage loan program. Mortgage lenders usually have lower debt-to-income ratio requirements than the agency DTI requirements. The lower the debt-to-income ratio, the better. Low DTI means the borrower has low monthly debts compared to his income. If applicable, the VA DTI Mortgage Calculator will get you the most accurate estimated housing payment, including the VA MIP, PMI, Taxes, Insurance, and HOA.

Can I Get a VA Loan Approval After Mortgage Denial Due to DTI Overlays?

Most first-time homebuyers believe all mortgage lenders have the same lending requirements on VA loans since they are government-backed loans. This is not true. All lenders must ensure their borrowers meet the minimum agency guidelines of VA. However, lenders can have higher requirements for VA LOANS. In the next paragraph, we will discuss a case scenario on VA lenders with overlays on debt-to-income ratios.

What Is An Acceptable DTI For VA Loan Approval?

Let’s go over a case scenario on an acceptable debt-to-income ratio for mortgage approval for lenders is. Let’s say Borrower A is a borrower who got an approve/eligible per AUS on a VA loan with a 550 credit score and 43% DTI. Borrower A went to LENDER X, where he was denied a VA loan due to not having a 620 credit score. Gustan Cho Associates has no lender overlays and can qualify and approve Borrower A  for a VA loan. Use the VA DTI Mortgage Calculator to find out what your DTI is.

• USEFUL LINK: VA Lender Overlays 

What Are the Agency Guidelines on Debt-To-Income Ratio on VA LOANS?

Gustan Cho Associates has no lender overlays on VA loans. This means that the borrower is solid as long as the borrower meets the minimum VA guidelines and gets an automated approval per AUS. We only go off the automated underwriting system’s automated findings and have zero lender overlays on VA loans. Use the VA DTI Mortgage Calculator to see if you meet the VA DTI guidelines. Use the VA DTI Mortgage Calculator to see if you meet the VA DTI guidelines.

VA Guidelines on Manual Underwriting on VA LOANS

If the borrower does not get an AUS approval and gets a refer/eligible per AUS, Gustan Cho Associates will see if the borrower qualifies for VA manual underwriting guidelines. We will discuss the basic VA DTI guidelines on VA AUS Approvals versus Manual Underwriting. The Department of Veterans Administration (VA), the federal agency that administers VA agency guidelines and the VA loan program, has no maximum VA debt to income ratio cap. However, most lenders will require a debt-to-income ratio not to exceed 41% to 45%. Why does this happen? Why will a lender not qualify?

• USEFUL LINK: VA and VA DTI Manual Underwriting Guidelines

How Collection Accounts Affect Debt-To-Income Ratio on VA Loans

VA guidelines on collection accounts require lenders to take 5% of unpaid outstanding collection accounts and use it as a hypothetical debt to calculate the debt-to-income ratio. Borrowers can qualify for a VA loan without paying outstanding collection and charged-off accounts.

VA requires mortgage underwriters to use 5% of the unpaid collection account balance to be used as a hypothetical debt.

The 5% rule only applies to non-medical outstanding collection accounts with outstanding balances over $2,000. Non-medical and medical charged-off accounts are exempt from the 5% hypothetical debt calculation rule. Use the VA front-end and back-end mortgage calculator to calculate your debt-to-income ratio if you qualify for a VA loan with outstanding collection accounts.

The Best Mortgage Lenders With No VA DTI Overlays

Again, if you meet the minimum agency guidelines of VA, VA, USDA, Fannie Mae, and Freddie Mac and get an approve/eligible per automated underwriting system (AUS), you are eligible and qualified.

A lender with no lender overlays that go off agency guidelines will have no problem getting you approved and closed.

Lenders can have higher lending guidelines, and you may not qualify with a particular lender. Gustan Cho Associates has no lender overlays on government and conventional loans. We will cover and discuss lender overlays in the following paragraph. Find out in seconds if you meet the VA DTI guidelines using the VA DTI Mortgage Calculator.

DTI Lender Overlays on VA LOANS?

The VA DTI Mortgage Calculator powered by Gustan Cho Associates is a powerful tool for borrowers. The debt-to-income ratio is one of the most important factors for borrowers to understand before applying for a mortgage. The debt-to-income ratio mortgage calculator allows you to calculate how much your monthly debt payments are, including your proposed new mortgage payment, divided by your monthly gross income.

The Best VA DTI Mortgage Calculator

Created and launched by Gustan Cho Associates after months of research and development, the  VA DTI Mortgage Calculator, along with the Best Mortgage Calculator powered by Alex Carlucci, are hands down the two best calculators for everyone to use and navigate to get accurate numbers. The Best Mortgage Calculator and the Debt-to-Income Ratio Mortgage Calculator are the two most powerful mortgage tools for homebuyers and loan officers during a mortgage transaction. The Best Mortgage Calculator and the VA DTI Mortgage Calculator are the nation’s most accurate user-friendly mortgage calculators used by loan officers and mortgage borrowers.

If you have any questions about the VA DTI Mortgage Calculator or you need to qualify for with a lender with no overlays, please contact us at 800-900-8569. Text us for a faster response. Or email us at alex@gustancho.com. The team at Gustan Cho Associates is available 7 days a week, on evenings, weekends, and holidays.

FAQ About VA DTI Mortgage Calculator

• What is manual underwriting on VA loans? Manual underwriting is a process where a human mortgage underwriter thoroughly evaluates a borrower’s loan application instead of relying solely on automated systems. It is allowed and may be necessary in certain cases for VA loans.
• Why would a VA loan be manually underwritten? A VA loan may be manually underwritten if the borrower fails to meet the criteria for automated approval, such as having no credit history or scores, or if there are inconsistencies or weaknesses in the borrower’s financial profile.
• What triggers a manual underwrite on a VA loan? Several factors can trigger a manual underwrite, including inconsistent income, limited assets, high liabilities compared to income, or significant collection and charged-off accounts.
• Is rent verification mandatory for manual underwriting on VA loans? Yes, generally, rent verification (VOR) is required for manual underwriting on VA loans. Mortgage underwriters will review the borrower’s rental payment history to assess their ability to manage housing expenses.
• What are the debt-to-income ratio (DTI) guidelines for VA manual underwriting? The maximum allowable DTI ratios for VA manual underwriting are typically 31% front-end and 43% back-end with zero compensating factors. These ratios can increase with compensating factors, such as a strong credit history or significant cash reserves.
• Do all lenders have the same DTI requirements for VA loans? No, lenders can have their own overlays or additional requirements beyond the minimum VA guidelines. It’s essential to shop around and find a lender that suits your financial situation and can work with your DTI ratio.
• How do collection accounts affect the debt-to-income ratio on VA loans? VA guidelines require mortgage underwriters to use 5% of the unpaid outstanding balance of non-medical collection accounts when calculating the DTI ratio. However, medical collection accounts and charged-off accounts may not be factored into the DTI calculation.
• What are the best mortgage lenders with no VA DTI overlays? Lenders with no overlays strictly adhere to the VA guidelines and rely on automated underwriting system (AUS) findings. Gustan Cho Associates is one such lender known for its minimal overlays on government and conventional loans.
• What is the VA DTI Mortgage Calculator? The VA DTI Mortgage Calculator, powered by Gustan Cho Associates, is a tool designed to help borrowers calculate their front-end and back-end DTI ratios specifically for VA loans. It can provide accurate estimates to help borrowers understand their financial position and eligibility.
• How accurate and reliable is the VA DTI Mortgage Calculator? The VA DTI Mortgage Calculator, along with other tools like the Best Mortgage Calculator, are considered highly accurate and reliable, designed to assist both borrowers and loan officers in understanding mortgage affordability and eligibility.

This blog about the VA DTI Mortgage Calculator was updated on May 6th, 2024.