VA loan...need a higher DTI for my dream house!! Any suggestions?

Asked by Michael, Temecula, CA Sun Dec 9, 2012

We are trying to purchase a home with a VA mortgage. We recently got approved through a bank. But they stated that because we were not automatically approved through the underwriting system that we would have to stay around 42% DTI. But I thought that we could go up to 55% for VA? Our credit qualifies, its not perfect, but it mets the minimum required. Any suggestions on how to get our DTI higher??

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9
, ,
Sun Dec 9, 2012
Banks have at times overlays that change their requirements. I suggest you go to a mortgage banker for a second opinion. I've approved several who were either turned down by a bank or limited due to overlays.

Greg Herman
951-265-1607
2 votes
, ,
Sun Jan 27, 2013
No secret formulas for VA when it comes to qualifying. Banks will project overlays though that limit beyond the guidelines VA currently has possibly turning your file into a manual underwrite. Also a possible cintibuting factor could be your residual income factor.
I work for a mortgage banker where overlays are few. I also have the Certified Military Hiusing Specialist designation from USA Cares (a great Veteran resource site) and have 27 years experience in lending. Lastly I only work in home loans. Our industry is so complex that splitting time between selling Real Estate and home loans would deprive my clients the best possible representation.
George Raymundo has been a trusted Realtor for years and an excellent resource for you as well.
Please contact either of us for further information.

Greg Herman
951-265-1607
NMLS #215455
MLO
Certified Military Housing Specialist
1 vote
, ,
Sun Jan 27, 2013
I realize this is an old tread, but if you were not successful in getting your dream home, let me know. Most likely the reason you were unable to get an AUS Approval was due to credit issues and or lack of reserves. Let me know if you still require some help.

Best of Luck!
1 vote
, ,
Mon Dec 10, 2012
Hi Michael,

Unfortunately, when you have to have a VA or FHA loan manually underwritten, it has to qualify under the more restrictive manual guidelines which include a hard cap on the debt to income ratios.

The other thing that will affect how high your debt ratio can go is whether or not you meet or exceed the VA disposable income requirements. If you exceed the requirement by 20% or more, underwriters are more likely to approve a higher ratio.

I do have a little secret that has to do with the automated underwriting system that will probably make a difference.

Please feel free to contact me for more information or help with your VA mortgage. You can also find more info on my VA mortgage website by clicking the link below.

John Burke
Senior Mortgage Banker
Peoples Bank & Trust Co.
(877)228-9069
http://www.trulia.com/profile/johnburke/#__rec
1 vote
, ,
Mon Dec 10, 2012
Michael, did your lender talk to you about VA's residual income requirements?
In addition to DTI you have to meet that requirement as well. Residual income is a calculation
to determine how much money you will have left at the end of the month when all bills are paid,
and is based on family size.

Both of these factors are taken into consideration when qualifying for VA loans, so getting a higher DTI may not be the complete answer.

If you need more information, don't hesitate to call me.
1 vote
, ,
Sun Dec 9, 2012
Hi Michael,

What is causing your DTI to be so high? Is the underwriter giving you a lower qualifying income? Do you have income that can be grossed up 115% because it's not taxed? Do you have any installment debts that have less than 10 months before they will be paid off?

I just funded a VA manual underwrite approval for a VA active duty borrower who had a DTI around 46%. A lot of banks don't do manual underwrite approvals....we do.

Do you have any compensating factors like assets or reserves?

A question bigger than you DTI is whether or not you meet the VA residual income requirement. Do you know what that is? Also, what do you think is preventing you from receiving the automated approval?
1 vote
, ,
Sun Sep 29, 2013
You must have an Approved Eligible DU findings in order to go higher on the dti. If it comes back as a refer on the DU findings, then you are capped at 41% on your dti ratio.

I have noticed with scores below 680 now that most people are getting a refer on the Automated findings thru Desktop Underwriting.

Good Luck.

Joel Lobb (NMLS#57916)
Senior Loan Officer
502-905-3708 cell
502-813-2795 fax
kentuckyloan@gmail.com

Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*
http://mylouisvillekentuckymortgage.com
0 votes
Ricki Lynn M…, Agent, San Diego, CA
Mon Dec 10, 2012
Hi Michael,
If your bank doesn't specialize in VA Loans, maybe getting a second opinion, along with these other answers is a good idea. I know a lender from Wells Fargo that is a VA Specialist. Her name is Cheryl Sutcliffe 760-560-8449 or mortagemom@gmail.com
Run your questions past her, it can't hurt to get a second opinion.
Merry Christmas! I hope all your home buying wishes come true!!
Realtor Ricki
0 votes
Ashley Cooper, Agent, Temecula, CA
Sun Dec 9, 2012
Give Nadia Martin a call... She's with PRW lending and she can answer that question and give you some options. Her number is 714-381-5447.
Good luck!!
0 votes
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