How Much Income is Required to Get a VA Loan

1. How Much Income is Required How Much Income is Required to Get a VA Loan? to Get a VA Loan? Similar to other loan options, VA loans demand proof that you’re able to pay for the property you’re financing, which is determined by the ratio between your present month-to-month income and any existing debts. Creditors consider income from several sources for VA loans, but they all have to satisfy certain minimum requirements. It’s generally preferred that these funds come from full-time jobs, which in loan lingo means jobs that have at least a 30-hour work week. If you work for yourself as a sole proprietor, your qualifying income level is determined by your last tax return and requires proof of at least two years of steady payments. Part-time income qualifies only if you’ve been receiving it for at least two years and your lender believes it is likely to continue. Other eligible sources of income like interest earnings, dividends, disability payments or retirement pensions will require proof in the form of receipts for the past two years. These funds must be expected to continue (and preferably to rise) for a minimum of three more years.

2. Do VA Loans Have Income Limits? Do VA Loans Have Income Limits? No. There is no income cap that must be adhered to in order to qualify for a VA loan. Other federal home loan applications may set income limits to qualify, but not the VA. However, VA loans do have certain “residual income” requirements that applicants must be aware of. What is Residual Income? What is Residual Income? Residual income is simply how much money is left after all your mortgage payments, taxes, insurance fees, subscriptions, and recurring debts are subtracted from your gross monthly income. Recurring debts include any minimum monthly expenses such as credit card fees, car payments, college loans, and spouse or child support. Basically, any monthly debt that shows up in your credit history may be considered when calculating residual income requirements. Other costs for things like groceries, utilities, and recreational activities are not considered when determining the total amount of your residual income. The specific requirements for residual income are variable and depend on things like how many people you live with, your mortgage rate, and the physical location of the home you are interested in. For instance, an individual loan applicant in the Southeastern US will typically need much less money to be left over in residuals every month than a large family living in Los Angeles or Beverly Hills. VA loan providers can provide you with a residual income formula graph if you want to make sure you meet all of their residual income requirements before meeting with them formally.

3. Unusable Income Sources Unusable Income Sources Some income sources can’t be used for obtaining a VA loan. A few of these non-qualifying sources include cash earned by gambling or playing the lotto, unemployment income and job bonuses. To be approved for a VA loan, you also have to account for any income earned by family members or roommates who live with you, while funds received from co-applicants who don’t live in your home do not qualify.