Basics needed to qualify for a VA loan

It should be known that VA loan eligibility doesn’t necessarily translate into loan approval. Even if you are eligible, you still need to meet all lender requirements. Among other things, these can include the following:

Income verification

A lender will need to know how much you make to ensure you can pay back the home loan. Typically, mortgage underwriters look for consistent earnings, so you’ll be asked to submit W2s or pay stubs for the past few years. This helps the underwriter gauge income stability and your likelihood to stay on top of loan payments.

Debt-to-income ratio

Lenders look at a borrower’s debt-to-income (DTI) ratio to assess whether you’re someone they want to loan money to. To calculate DTI, they’ll add your current monthly expenses (car payments, recurring credit card charges, internet bills, etc.) to your future monthly expenses related to your new mortgage. Then, they’ll divide that number by your monthly income and multiply by 100. The higher your DTI, the less favorable the terms or interest rate may be. As a benchmark, a DTI of 41% is the standard guideline for VA loans.

A good credit score

For a 30-year fixed-rate mortgage through the VA loan program, Movement Mortgage requires a minimum credit score of 620.

Kentucky VA Mortgage Lender.

All types of income, credit and employment issues taken into consideration. 620 minimum Fico Score from Fico Score versions 2,4, and 5 respectably from Transunion, Equifax . and Experian Credit Bureaus. Middle credit score of three taken.

Type of residence

A home you buy with a VA loan must be your primary residence.
Guarantees

The VA loan program guarantees 25% of the lender’s potential loss should the borrower default on the loan. This amount, called an entitlement, is what allows for a low-or-no down payment to be acceptable.

Veterans and military members purchasing in more expensive housing markets may have even more VA loan entitlements available.
Tax benefits

Depending on where you’re looking to live, military borrowers may be eligible for property tax reductions.
Insurance

Another overlooked benefit is that there is no requirement to take out private mortgage insurance (PMI) with a VA loan, unlike some other low-or-no down payment loans.
Down payment

With a VA loan, eligible applicants can purchase a new home with 0% down.
Fees

First-time VA loan applicants:

If you’re looking for 100% financing (i.e., no down payment), a fee of 2.30% on the total loan amount is charged.

If you can make a down payment of at least 10%, the fee is 1.40%.

Second-time VA loan applicants:

3.6% of the total loan amount is applied if the applicant still has an active VA loan, and if no down payment is made.

VA loan applicants receiving disability:

Funding fees are waived.

Seller contributions

It’s perfectly allowable for the seller to show their appreciation by chipping in up to 4% toward closing costs.