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VA Loans, overlays, income, debit, and credit when buying home in the Waldorf, MD

When Overlays, income, debit, and credit - Skip Young your Fort Meade Realtor

The learning objectives about overlays, income, debit, and credit when buying a new home in the Waldorf area, we need to understand a few objectives on these issues.

  • To understand the VA loan underwriting guidelines.
  • To be able to explain the general income guidelines
  • To understand the debts and obligations guidelines
  • To know what judgments, federal debt and tax liens are.
  • To understand how credit affects the VA loan approval process.
  • VA Loan Underwriting

The VA Lenders Handbook states that VA loans involve a veterans benefit. Therefore, lenders are encouraged to make VA loans to all qualified veterans who apply for a loan.

The va's underwriting standards are intended to provide guidelines for lenders Underwriters as well as VA Underwriters.

Underwriting decisions must be based on sound application of the underwriting standards, and Underwriters are expected to use good judgment and flexibility and find guidelines set forth in Cooley including guidance on how to treat income, that's an obligations, credit history and so on, and how to present an analyzed these items on a VA loan analysis form.

  • VA approved lenders are responsible forDeveloping all credit information.
  • Properly, properly obtaining all required verifications and credit report,
  • Ensuring the accuracy of all information on which the loan is based,
  • Complying with the long regulations governing VA underwriting standards, with the va's underwriting policies, procedures, and guidelines, and
  • Certifying as to compliance with all of these

The following chart reflects what VAs general itme requirment for stability of income

General Income Guildelines Time Tale Chart
  • General Income Guidelines Time Tale Chart

The following chart reflects what va's general time requirements for stability of income.

Type of incomeGeneral time requirements
Standard IncomeMinimum of 12 Months
Overtime or Part-Time2nd JObIncome
Public AssistanceContinued for at least 3 years
Workers CompensationContinuance into the foreseeable future - Case by Case
Seasonal IncomeDocumneted history and evidence that the income will continue into the foreseeable future
VA Educational Allowance - GI BillCommission Income
  • Lenders Responsibilities
  • VA approved lenders are responsible forDeveloping all credit information
  • Properly, properly obtaining all required verifications and credit report,
  • Ensuring the accuracy of all information on which the loan is based,Ω
  • Complying with the long regulations governing VA underwriting standards, with the va's ,
  • Complying with the long regulations governing VA underwriting standards, with the va's underwriting policies, procedures, and guidelines, and
  • Certifying as to compliance with all of these Essentially, a v a underwriter looks at the mortgage application and makes sure everything needs the VA requirements and criteria. The lender might have a slightly different set of guidelines for making alone, and it's Underwriters job to make sure the loan fits within the rules of a VA home loan program

In addition to these criteria, the VA underwriter will look at the Barro's financial situation to make sure he or she doesn't present a high risk of foreclosure. Underwriters want to see the bars don't have any liens against them and that they will have at least 59% of their income left after And making their mortgage payment. Underwriters were also take a look at the income level to make sure that they're a stable source of money coming in. These guidelines are standard and more importantly, the Baseline for qualification for a VA home loan.

The VA has an amazing team in pressure for professionals and they are very Pro home ownership for the veteran. Because of this, the lender the VA lenders handbook is written to provide maximum flexibility for the underwriter to consider the individual circumstances of a veteran in making a room decision

  • Lender Overlay

The benefit is that this provides a lot of leeway for lenders to get VA deals done. The downside is that each lender has set their necessary overlays on top of the VA guidelines, and has different rules for VA loans that they have advertised.

This causes much confusion in the real estate industry and can actually hinder a veteran from buying if they get turned down from a loan due to an overlay that is not necessarily a guideline.

  • General income guidelines

Stable and reliable are the works to describe the general VA income guidelines. the most recent two years of income must be validated or as determined by an automated underwriting system with a minimum of one year verification required VA uses standard income documentation when evaluating a bar for a VA home loan. Any and complained an applicant that is not or cannot be verified, should not be used

Note - a minimum of two years of employment history should be verified. Past employers should be used if needed to complete a two-year history. VA requires an original certificate certified copy of the borrowers pay stubs Underwriters will compare the pay stubs and employment verification for consistency. If a spouse is on the application of spouse's income may be used.

  • General Income Guidelines Time Tale Chart

The following chart reflects what va's general time requirements for stability of income.

Type of incomeGeneral time requirements
Standard IncomeMinimum of 12 Months
Overtime or Part-Time2nd JObIncome
Public AssistanceContinued for at least 3 years
Workers CompensationContinuance into the foreseeable future - Case by Case
Seasonal IncomeDocumneted history and evidence that the income will continue into the foreseeable future
VA Educational Allowance - GI BillCommission Income
  • Commision Income
      • Verification - all or a major portion of the applicant's income is derived from commissions, obtained the following documentation
      • The actual amount of commission paid year-to-date
      • The basis for payments that is salary plus commission, straight commission, or draws against Commission.
      • When commissions are paid that is, monthly, quarterly, send you and lie or annually. Individual taxes income tax returns, that is monthly, quarterly, me, semi-annually, or annually.

    Analysis - generally, income from commission is considered when the applicant has obtained such income for the last 2 years

    • Commission Income - Self Employed
      • Verification - all or a major portion of the applicant's income is derived from commissions, obtained the following documentation
      • VOE or other written verification of which provide the following
      • The actual amount of commission paid year-to-date
      • The basis for payments that is salary plus commission, straight commission, or draws against Commission.

      Analysis - generally, income from commission is considered when the applicant has obtained such income for the last 2 years

      • Less than two years cannot usually be considered stable unless an applicant has had previously related employment and/or extensive specialized training.
      • Less than two years can really qualify, in - deaf development is required for a conclusion of stable income on less than 1 year cases
      • Underwriting income Objectives

      The mortgage payment,other shelter expenses,

      Evaluate whether verified income is stable and reliable and anticipate future so sufficient

      • income of a spouse

      Lenders must verify and treat the income of a spouse who will be contractually obligated on the loan the same as a veteran's income.

      To ensure compliance with the Equal Opportunity Act lenders cannot ask questions about the income of African spouse unless the:

      • Spouse will be contract liable
      • Applicant is relying on, alimony, child support or separate maintenance payments from the spouse or former spouse, or
      • Applicants reside in a community property State or the security is in such a state.
      • Lenders must verify and treat the income of a spouse who will be contractually obligated on the loan the same as the Veteran's income.

      Note+ In community property State, information concerning a spouse may be required and considered in the loan in the same manner as for the applicant, even if the spouse will not be contractually obligated on the loan.

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