Installment debt with less than 10 months remaining could be excluded from the DTI calculation.
Paying off installment and revolving debt to qualify IS allowed.
The maximum debt to income ratio on a VA loan is determined by the Automated Underwriting System (AUS). The system takes into account the overall picture of your application including income stability, income source, amount down payment, cash reserves, credit scores, etc.
The general rule of thumb is that your monthly obligations should not exceed 50% of your total qualifying budget.
Loans with lower credit scores will require lower DTI.
In addition to the debt to income ratio requirements, VA also has residual income requirements. VA residual income looks at how much income is available after all monthly liabilities are accounted for. This includes federal and state tax withholdings, utilities and child care.
The required amount is based on the region the property is located in and the family size.
This overview is not all inclusive and does not include all guidelines or potential qualifying situations. Contact us or your lender for additional information that applies to your situation.
Laura Borja | Senior Loan Officer | NMLS#199107
Cell: (619) 992-4061 | Branch Main: (858) 264-1547
1615 Murray Canyon Rd ste 1020 San Diego CA 92108
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