Richard's Real Estate Thoughts - Chattanooga TN Mortgage Lender: VA Mortgage: Residual Income Requirements

VA Mortgage: Residual Income Requirements

VA loans have an income requirement in addition to the more common debt to income ratio, DTI. VA’s Residual Income can affect a veteran’s loan approval, especially at the lower income levels.

VA Residual Income is based on family size and region and loan size:

 

Table of Residual Incomes by Region

For loan amounts of $79,999 and below

Family Size

Northeast

Midwest

South

West

1

$390

$382

$382

$425

2

$654

$641

$641

$713

3

$788

$772

$772

$859

4

$888

$868

$868

$967

5

$921

$902

$902

   $1,004

Over 5 -Add $75 for each additional member up to a family of seven

 

 

Table of Residual Incomes by Region

For loan amounts of $80,000 and above. 

Family Size

Northeast

Midwest

South

West

1

$450

$441

$441

$491

2

$755

$738

$738

$823

3

$909

$889

$889

$990

4

   $1,025

   $1,003

   $1,003

   $1,117

5

$1062

   $1,039

   $1,039

   $1,158

Over 5 - Add $80 for each additional member up to a family of seven

 

These Residual Income requirements must be met to obtain VA financing. The residual income is factored by subtracting certain deductions from the gross monthly income. The first step is to determine the correct monthly gross income, which can be difficult for commissioned or for self-employed workers.

 

The deductions that must be subtracted are:

 

Federal income tax

State income tax

 

Monthly FICA

(Soc Sec and Medicare)

 

Monthly obligations:

 

New house payment

(including tax and insurance) Installment loans

 

Revolving accounts

 

Child support/Alimony

 

Child care costs

 

Other monthly obligations

 

 

 

Monthly home maintenance

($0.14 per square feet GLA)

 

 

 

Total deductions

 

 

For DTI ratios over 41%, veterans must exceed the Residual Income requirements by 20%. VA Residual Income should be calculated early in the loan process. Failure to check Residual Income requirements early can jeopardize you home purchase VA loan approval.


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Richard Smith
NMLS# 184479 TN# 104002 Georgia Residential Mortgage Licensee, GA#28928 

Conventional, FHA, FHA 203k, HUD $100 down purchases, VA,

Rural Development (USDA), THDA and Jumbo Loans


Lending in Chattanooga, Tennessee and Georgia for over 20 years.

Fairway Independent Morgage Company

Cell phone: 423-280-0345 Email:  Richard.Smith@FairwayMC.com

Visit my website to inquiry about a home loan.

This blog represents the opinions of Richard Smith. The posts and comments written on the blog do not represent the opinions or positions of Fairway Independent Mortgage Corporation.

 
Comment balloon 0 commentsRichard Smith • October 10 2016 11:09AM

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