There are some debt obligations that are often overlooked when you apply for a VA loan. When I say debt obligations, I’m speaking of only the month payments that will be counted as debt in your qualifying ratios for VA loan. More common items counted as debt are car payments, credit cards and student loans. But below is a list of less common items to think about when you apply for a VA loan:
Child support
If you pay child support, this debt must be counted as a debt in your qualifying ratios. Of course on the flip side if you receive child support it can be used as income.
Deferred student loans
If you have student loans that are deferred, make sure they are deferred for at least 12 months from the date you will be closing on your new VA loan or they will have to be counted as debt.
Installment debts with less than 10 months to go towards completion NOT counted
If you have a loan or car payment that you will have paid off in less than 10 months, generally it will NOT have to be counted as debt.
Loans against 401k or retirement or loans secured by deposited funds NOT counted
If you have a loan against your 401k retirement you may be using for closing costs or something else, this does NOT have to be counted as debt when you qualify for a VA loan.
Loan pay advances (primarily seen on LES statements of active military) must be counted as debt
These items will be counted as debt.
So those are some uncommon items that you may not have thought of that are either counted or not counted as debt in qualifying. Remember, it is only items that appear on your credit that are counted when you qualify for a VA loan. Items like phone bills, insurance, utilities, etc… are not counted.
So think about using your VA loan eligibility to take advantage of the $8,000 home buyer tax credit available until April 30th 2010 and the current low interest rates.
Some highlights of VA loans today:
- VA loans are 100% financing
- Sellers can also pay all your closing costs
- Maximum VA loans can get way up above $700,000 in many areas of the nation where jumbo VA loans are possible
- VA loan streamline refinance are easy to today’s low rates
- You don’t need perfect credit with a VA loan, so if you think you have bad credit you may be able to get a VA loan
- VA loan interest rates at record lows and being held down by the government to stimulate the economy
- California VA Loans 100% to $737,000+ in many counties
Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions at all about getting approved for a VA refinance loan or VA purchase loan.
Warmest Regards,
Rob Chomentowski
Sr. Loan Officer (and VA specialist)
858-922-7899
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