This article is about VA TBD Manual Underwriting Mortgage Guidelines On Pre-Approvals

VA TBD Manual Underwriting Mortgage Process.

Gustan Cho Associates are excited to re-introduce our TBD underwriting process. We are now able to send applications that require a manual underwrite to our underwriting staff in advance. Receiving a pre-approval from an underwriter will help numerous clients take the confusion out of the mortgage lending. If you follow our website, you know we deal with some unique mortgage scenarios. We specialize in FHA and VA manual underwriting as well as specialty conventional products such as HOMEREADY and HOMESTYLE. We even offer a VA RENOVATION LOAN. However, the bulk of our clients are struggling to obtain a loan with their current lender or are not receiving the customer service they need to get their mortgage closed. There are thousands of mortgage companies and even more loan officers. Mortgage lending has thousands of guidelines that take years to understand. Newer and less experienced loan officers may not give you the best service. That is unintentional. However, it can cost you thousands of dollars. Receiving a MORTGAGE DENIAL is one of the scariest things that can happen.

In this blog, we will detail how to utilize our TBD underwriting process for VA manually underwritten mortgages.

Qualifying For A VA Loan

VA lending can be incredibly confusing.

Most VA lenders have an additional set of LENDER OVERLAYS that create confusion in this market space. Since many lenders will tell borrowers need a 620 credit score to qualify for a VA loan, some veterans do not apply, when in fact they could qualify to buy a home. We specialize in lower credit score and unique mortgage situations, especially on our VA mortgage products.
We do not have any lender overlays on our VA mortgage products and can stretch our debt to income ratio further than most lenders. We have closed files with up to 65% debt to income ratios!!!

The veteran must also pass the VA RESIDUAL INCOME qualifications, but we are able to close higher debt to income ratio loans. The last thing we want to do is stretch your budget, we want to make sure you are in an affordable monthly payment.

How Does VA TBD Manual Underwriting Work?

How does the TBD process work?

The TBD underwriting process is a great tool for files with unique qualifications. VA underwriting has strict guidelines but also vague guidelines. There is not a viewable set of guidelines like there is for FHA mortgage lending. There are some basic qualifications you must hit such as passing your debt to income ratio. We send your file to the underwriter upfront for scenarios with variable income, late payments, foreclosures, bankruptcies, or other reasons to downgrade to a manual underwrite. Buying a home can be stressful, the TBD underwriting tool is a way to remove stress from the process. When there are one-off scenarios, this will give you the peace of mind knowing your file will close.

The underwriter will take your application (without an address) and underwrite your credit and asset documentation. Credit history is the main concern for VA mortgage lending.

How Do Mortgage Underwriters Process VA TBD Manual Underwriting

Payment history analysis by mortgage underwriters:

While most lenders will tell you need a 620 credit score to qualify for a VA mortgage, that is not a guideline, that is an overlay. The US Department of Housing and Urban Development (HUD), is responsible for guidelines on VA mortgages, and they do not have a minimum credit score requirement. That being said, they do scrutinize your payment history with a fine-tooth comb.
In order to qualify for a VA mortgage, you need to have a clean payment history for at least the most recent 12 months. Assuming you have not missed any payments in the past 12 months, we can usually qualify you for a VA mortgage. If you have non-medical collections in the past 12 months, that can kill your file. Now if you do have late payments in the past 12 months, it is still possible to get a VA mortgage loan. However, the underwriter will need a detailed letter of explanation with accompanying documentation to support your reason for being late. The reasoning must be strong and documentable, such as an elongated hospital stay. If you simply mismanaged and forgot a payment, that usually will not fly.

The underwriter needs to demonstrate you are responsible with your money. They must verify you have the ABILITY TO REPAY your VA mortgage.

How Do Mortgage Underwriters View Assets

One of the best benefits offered to the brave Americans who serve in the military is a zero down payment mortgage loan.

Just because you do not need a down payment, does not mean you don’t need money in the bank to qualify. There are closing costs involved with the VA mortgage. It is a common misconception that the Department of Veteran Affairs will cover your closing costs, that is not the case. Keep in mind, the seller can pay up to 4% of the purchase price to help cover your closing costs. Above and beyond closing cost, you will need to have at least one month of mortgage payment in your bank you pass a VA manual underwrite. The funds left in your bank after closing costs are considered reserves.

The more reserves you have, the higher the chance you have for approval.

VA Chapter 13 Bankruptcy Mortgage Guidelines

Chapter 13 Bankruptcy Mortgage Guidelines:

If you are a veteran who is currently in a Chapter 13 Bankruptcy or less than 2 years discharged from a Chapter 13 Bankruptcy, there’s a good chance you will qualify for a VA mortgage.
This is a great opportunity to use the TBD underwriting pre-approval. Part of the process for obtaining a mortgage during a Chapter 13 Bankruptcy is trustee approval. Having a pre-approval letter signed off by an underwriter will increase your chances of approval with the trustee.

For more information on a VA mortgage with a Chapter 13 Bankruptcy involved, please call or text Mike Gracz on  (800) 900-8569.

How To Start The VA TBD Manual Underwriting Mortgage Process

How to start the VA TBD underwriting process?

This process is designed to be as easy on you as possible. You will simply gather some basic documentation and complete an online application. From there we will submit all documentation to our underwriting department for credit in asset pre-approval. Below are the documents you will need:

• Last 60 Days Bank Statements – to source money for escrows/ reserves.
• Last 30 Days Pay Stubs.
• Last Two Years W2’S.
• Last Two Years Tax Returns – not always needed.
• Driver’s License.
• Certificate of Eligibility.

If you need help obtaining your Certificate of Eligibility (COE), please give us a call today. We may be able to access it for you if you have your DD-214. During the underwriting process, you may need to provide additional documentation. Once you have provided the required information, you will receive a pre-approval letter to go house shopping. Simple as that!

Gustan Cho Associates have been doing this for a long time. We specialize in lower credit score, higher debt to income ratio, and complicated mortgage scenarios. That is the reason we created our TBD underwriting process! If for any reason you do not qualify today, we will put you on a custom financial plan to qualify as soon as possible. As a veteran, you have the ability to qualify for a home faster than most Americans. We appreciate your service and all you have done for our country, we are available for questions seven days a week. Don’t hesitate to reach out today.