Friday, September 20, 2013

Louisville Kentucky VA Mortgage Requirements for income and debt to income ratios:

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Louisville Kentucky VA Mortgage Requirements for income and debt to income ratios:

Kentucky VA lenders  use debt ratios to help determine affordability. The VA Underwriting uses a debt ratio of 41% when approving a Kentucky VA home loan application. That simply means if someone makes $4000 per month, before withholdings, VA loans require mortgage payments plus other revolving and installment debt payments be no greater than $6,000 X .41 = $1640 a month.

Sometimes VA lenders will allow for you to have a debt to income ratio over 41%, but that usually entails you have a credit score of 680 or higher, with at least 6 months reserves.

With most Kentucky VA mortgage Lending tied to the automated underwriting thru Desktop Originator, most Kentucky VA home buyers will get a refer if the score is below 680.

If happen to get a refer eligible on your Kentucky VA loan approval thru DU, then you must make sure your debt to income ratio is not over 41%, and you will have to prove a good payment history on your last 12 months of housing history. 



Significant Increases or Decreases in Income

Increase: When a borrower has experienced a significant increase in income, the higher income may not be used to qualify the borrower, unless there is sufficient documentation to determine that the increase is stable and likely to continue at the level used for qualifying (e.g. that the income in not a one-time incentive payment).

Decrease: When the borrower has experienced a significant decrease in income, the income cannot be averaged using a previous higher level unless there is documentation of a one-time occurrence (e.g., injury) that prevented the borrower from working or earning full income for a period of time and proof that the borrower is back to the income amount that they previously earned. The underwriter must focus the analysis on the most recent earnings and the income that is most likely to be received at the level used for qualifying.



Residual Income for A  Kentucky VA Loan 

Residual income is the amount of net income remaining (after deduction of debts and obligations and monthly shelter expenses) to cover family living expenses such as food, health care, clothing and gasoline. See tables below for residual income requirements.



Count all members of the household (without regard to the nature of the relationship) when determining "family size," including:

An applicant's spouse who is not joining in title or on the note, and
Any other individuals who depend on the applicant for support. For example, children from a spouse's prior marriage who are not the applicant's legal dependents.
Reduce the residual income figure (from the following tables) by a minimum of 5 percent if:
The applicant or spouse is an active-duty or retired serviceperson, and
There is a clear indication that he or she will continue to receive the benefits resulting from use of military-based facilities located near the property.

Use 5 percent unless the VA office of jurisdiction has established a higher percentage, in which case, apply the specified percentage for that jurisdiction.


Family
Size                                                     South    (Kentucky)          




1                                                          $441                  
                                                 
2                                                          $738                  
                                     
3                                                          $889                  
                                                 
4                                                          $1,003                    
                                     
5                                                          $1,039                










Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax
kentuckyloan@gmail.com

Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*

Louisville, KY 40222*