Qualifying for a VA Home Loan

Qualifying for a VA home loan is a lot different than eligibility. You can be eligible for a VA loan and not qualify for one.

Here’s why.

Eligibility means that the VA will guarantee a loan for you IF you qualify for it. But you must prove that you can afford the payment and have a good history of financial responsibility to reduce the risk of a total loss.

Fortunately, the VA qualifying guidelines are flexible and easy to reach.

Credit Scores

The VA doesn’t have minimum credit score requirements, but typically you need at least a 620 to get funded. A 620-credit score isn’t hard to reach, so it opens up the possibilities for more veterans to secure financing to buy a home.

Debt-to-Income Ratios

The VA doesn’t have maximum debt-to-income ratios you must meet either, but you must prove you make more than enough money to cover your debts and handle your regular cost of living.

Ideally, your DTI should be less than 43%. This means that your total debts take up less than 43% of your income before taxes. The debts we look at are those debts reporting on your credit report, such as:

  • Minimum credit card payments
  • Personal loan payments
  • Student loan payments
  • Mortgage payments

We don’t include things like grocery bills, utility bills, cable, or internet bills. Only the payments that report on your credit card are considered.

Disposable Income Requirements

The VA puts a lot of emphasis on a veteran’s disposable income. This is the money left over after you pay your bills each month.

The VA has minimum disposable income requirements for each area of the country and for each family size. For example, if you have a family of 2, you’ll have lower disposable income requirements than a family of 5.

The VA believes if you meet the disposable income requirements, you’ll be less likely to default on your loan because you won’t have to sacrifice to make ends meet. The VA has one of the lowest default rates out of any mortgage program available today.

Employment Requirements

If you’re using employment income and not disability or retirement income to qualify, you must prove your employment history. We look for a 2-year stable employment history. This usually means that you’re at the same job for two years, but if you changed jobs in that time, you may still get approved.

We look for stability. We want to know that you’re in an industry that you have a history in and can succeed working in. If you changed jobs in the last 2 years but you stayed in the same industry, it counts toward your stable history.

If you changed industries, you may still qualify, but you may have to provide proof of education or training that makes you a good candidate for the new job if it’s been less than 2 years.

Foreclosure and Bankruptcy Waiting Periods

If you’ve ever tried to get a conventional loan after a bankruptcy or foreclosure, you know how long you have to wait. It can be up to 7 years!

VA loans don’t require nearly as long of a waiting period. You need to wait just 2 years before you can get another loan.

Now just because the waiting period is so short doesn’t mean you automatically qualify. You must still prove you can afford the loan. The best thing to do during that 2-year waiting period is improve your qualifying factors including the following.

Work on your Credit Score

Your credit score likely took a hit if you filed for bankruptcy or had a foreclosure. During the waiting period see what you can do to improve it.

Try applying for a secured credit card or even an unsecured credit card with a low credit limit. Use the card responsibly on the things you pay for each month and pay the balance off in full each month.

Make sure you make all payments on time and don’t overextend your credit. If you use credit cards, only have a maximum of 30% of the credit line outstanding at one time and pay the balance off as quickly as you can.

Show Responsible use of your Funds

We’ll need to see that you picked up the pieces and can be financially successful now. If you can show that you have money saved (reserves) and that you don’t overextend yourself

VA Loan from a fellow Vet & proven local lender

My City Mortgage is veteran-owned and the best choice for VA homebuyers!

VA Loan Family
We are veterans serving veterans on the path to homeownership.

Purchase your home with as little as 0% down payment.

VA Streamline Refinance with a reduced funding fee and flexible documentation requirements – available for veterans currently in VA loans.

Veteran-Owned Company.

Jumbo VA loans available.

30, 25, 20 and 15-year terms are all available with fixed rates.

No monthly PMI (Private Mortgage Insurance).

VA loans are governed by the U.S. Department of Veterans Affairs.

Pay your mortgage off at any time without pre-payment penalties.

Our goal is to provide excellent customer service.

Jessica Ellis

Loan Originator NMLS #: 2357124 Continue Reading Jessica Ellis

Lori H

I’ve had the best experience for being a first time homebuyer,everyone was beyond helpful and explained all the steps in detail to someone with zero knowledge of the home buying process.

David A

My City was fantastic to work with. They were extremely knowledgeable and answered all questions quickly.

Our promise

We strive to provide Veterans with a smooth, transparent loan process.
We spend time with our clients upfront so we can place them in the most suitable, affordable loan program possible.

Our goal is to avoid any confusion or frustration that might come along with the home buying process!

VA Loan Family

about us

My City Mortgage strives to provide applicants with a smooth, transparent loan process.

We spend time with our clients upfront so we can place them in the most suitable, affordable loan program possible. Our prequalification step includes a detailed review of an applicant’s future monthly payment as well as the total amount of money that will be needed at closing. Our goal is to avoid any confusion or frustration that might come along with the home buying process!

The most important part of our process for buyers and agents is protecting them from rushed or misleading pre-approvals.

My City Mortgage – NMLS # 1978621

A division of Hometown Lenders, Inc. – NMLS # 65084

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

© Copyright 2021 My City Mortgage A division of Hometown Lenders, Inc. NMLS# 65084 | (www.nmlsconsumeraccess.org) | Terms, conditions, and restrictions may apply. Loan products are subject to availability and credit approval. Not a commitment to extending credit. Hometown Lenders USA AZ BK-0949142. Licensed by the Department of Corporations under the California Department of Financial Protections & Innovation. Company License # 41DBO60614. | Mortgage Company Complaint Terms of Service Privacy Policy CA Privacy Policy Legal Accessibility Policy

Hometown Lenders is licensed under the laws of the State of Texas and by state law is subject to regulatory oversight by the Texas Department of Banking

Texas Mortgage Banker Disclosure – Figure: 7 TAC 81.200(c) “CONSUMERS WISHING TO FILE A COMPLAINT AGAINST A MORTGAGE BANKER OR A LICENSED MORTGAGE BANKER RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550. THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED MORTGAGE BANKER RESIDENTIAL MORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV.”

205 ILCS 635/2-9 Posting of license

The license of a licensee whose home office is within the State of Illinois or of an out-of-state licensee shall be conspicuously posted in every office of the licensee located in Illinois. Out-of-state licensees without an Illinois office shall produce the license upon request. Licensees originating loans on the Internet shall post on their Internet website their license number and the address and telephone number of the Commissioner. The license shall state the full name and address of the licensee. The license shall not be transferable or assignable. A separate certificate shall be issued for posting in each full-service Illinois office.

Licensee shall post on their internet web site the address and telephone number of the IDFPR.
James R. Thompson Center
IDFPR-Residential Mortgage Banking
100 W. Randolph, 9th Floor
Chicago, Illinois, 60601
Tel: (844) 768-1713

Legal | Privacy Policy

1439 Monroe Ave Suite 2 Dunmore, Pa 18512

(570) 335-9397

info@gomycity.com

Equal Housing Lender