Getting VA loans approved let alone any mortgage program is no walk in the park in 2010. Program guidelines are tight and it seems like everyday there is another story in the news about how hard it is to qualify for a mortgage. Even so, if you are trying to get a VA mortgage, logic and common sense can go a long way. Below are several areas where making sense can get your VA loan approved.
For starters, all VA loans are “manually” underwritten by an underwriter. What this means is that the primary decision maker on a VA mortgage loan approval is a human being versus an automated system. This is good news when comes to getting a VA mortgage approved because the underwriter has some discretion in approving a mortgage application if it makes sense to do so.
1. What about your credit report?
First, it is important to know what underwriters are looking for when it comes to their analysis of your financial affairs. How your finances look will tell an underwriter a lot about your ability to repay your mortgage. Do you have a lot of debt, or do you pay your bills off every money? What is your credit history – do you have a stellar credit history, or are you sloppy with making payments?
A missed payment on your credit report can spell disaster for getting a mortgage approved. However, with the VA loan approval process, you will have the chance to explain your situation to the underwriter. If you have to write a letter of explanation, make sure to spell out the facts and to indicate that you have since corrected the problem that lead to the missed payment. Showing responsibility for fixing the problem can make all the difference in getting an approval.
2. Your income is from 2 jobs or some other source?
Another factor of your financial situation that an underwriter will look closely at is in the case that you are applying for a mortgage using two or more jobs, or you are trying to use overtime/bonus pay to qualify. Typically, underwriters will only count overtime pay if you have been on the job for at least two years and that you have been getting the overtime pay consistantly the whole time on the job. This guideline typically applies for bonus pay too. You will need to be able to prove that you have historically gotten a bonus to have a shot at having that income count towards your mortgage application.
Under most situations, if you work two jobs, the second job will only be counted if you have been on the second job for at 2 years. You may be able to make the case that the second job should be counted if you have had it less than two years, but you held a second job before you got your current second job. The underwriters are looking for consistency. If you have been doing it and it looks like you will continue to do it, then you may have a good shot at having it count towards your loan approval.
If you fall into any of these situations, make sure you carefully discuss them with your loan officer. In most cases, how you present the information to the underwriter makes all the difference in the world in getting an out of the box situation approved.
