Income Requirements

When qualifying for a DFW VA Loan, like with any type of loan program, your lender will use your gross income (before taxes) for qualifying. This is extremely important because some items such as BAH and disability pay are not taxed. For those items, lenders can “gross up” the income, meaning that for qualifying purposes, they can take 125% of the amount you receive.

The total income of all of the borrowers on the application is used to qualify. If there is a family member living in the home who is working, but is not on the application, their income is not used to qualify for the loan.

The total gross income is used to calculate a number called debt-to-income ratio (DTI). There are two DTI numbers, housing ratio and total ratio. The housing ratio is the percentage of your income that will be used to pay your new mortgage payment plus taxes, homeowner’s insurance, and HOA fees. The total ratio is the amount of your gross income used to pay all of your debts including the new house payment. Generally speaking, VA requires a 60% or lower ratio, but any ratio above 50% requires strong factors to offset what is considered a high DTI.

All borrowers (except on DFW VA IRRRL refinances) will need to provide the most recent 2 years W2s. In addition, most borrowers will have to provide the most recent 2 years tax returns.

Active Duty military will have to provide their most recent monthly LES. Gross earnings are used, and 125% of BAH and BAS will be used.

Although in most cases, you must have a 2 year employment history to qualify for a DFW VA Loan, recently discharged Vets can qualify with less than 2 years with a signed letter from their employer stating their standing with the company, probability of advancement, and likelihood of being laid off. However, if you are receiving variable income such as commissions, generally you will need a 2 year history, despite recent military discharge. The exception is if you are doing the exact same job that you were trained to do, or did, while you were active.

Any variable income will need a 2 year history as the lender needs to verify stability and consistency. In most cases, you will have to provide 2 years of tax returns. In some rare cases, if you had a salary or hourly job doing the exact same thing previously, the lender may make an exception and allow for only 1 year history, but under 1 year is not acceptable.

The amount of the fixed income will have to be verified through documentation such as an award letter for the most recent year. In addition, you will need to document continuance of the income for at least 3 years beyond the closing date.

Child support and alimony will have to be verified through a court-stamped copy of your divorce decree and separation agreement. You will have to verify that the income will continue at that level for at least the next 3 years.

We are always available to answer your questions with honesty and straight-talk. We would be honored to assist you!

Thurber Mortgage Planning at Trademark Mortgage, Inc.
David Thurber
NMLS #249407
1668 Keller Pkwy. Suite 200
Keller, Texas 76248
P: (682) 238-1457
Email: dthurber@dtmortgageplanning.com

This website is not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency.


David Thurber is a Residential Mortgage Loan Originator NMLS #249407, (682) 238-1457 - 1668 Keller Pkwy. Suite 200 | Keller, Texas 76248. Powered by Trademark Mortgage, Inc. NMLS #32139, 13150 Coit Rd. #100, Dallas, TX 75240 877 879-8989 Information subject to change without notice. This is not an offer for extension of credit or a commitment to lend. http://www.nmlsconsumeraccess.org

Texas Mortgage Banker Disclosure

Pursuant to the requirements of Section 157.007 of the Mortgage Banker Registration and Residential Mortgage Loan Originator License Act, Chapter 157, Texas Finance Code, you are hereby notified of the following:

CONSUMERS WISHING TO FILE A COMPLAINT AGAINST A MORTGAGE BANKER OR LICENSED MORTGAGE BANKER RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT’S WEBSITE AT http://WWW.SML.TEXAS.GOV A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550.

THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CASUED BY ACTS OF LICENSED MORTGAGE BANKER RESIDENTIAL MORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIUMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT http://WWW.SML.TEXAS.GOV.


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