To qualify for a VA home purchase or refinancing loan, you will need to be able to prove your current income. This will come in the shape of your debt-to-income ratio, as well as your residue income.
Calculate Your Debt-To-Income Ratio
Your debt-to-income ratio will be an important part of the VA loan process. That’s because lenders will review your ratio to find out how much you can afford. You can work out a veteran’s debt-to-income ratio by dividing their significant monthly debts by their monthly income. Significant debts can include credit card or car fees, as well as a current mortgage you may have. You should speak to your lender to find out more about this figure, and what you can do to change the percentage
Calculate Your Residue Income
Your loan provider will look at your residue income as a factor in approving a VA loan. This type of income is what you will have left over after important expenses are paid. Important expenses will include your mortgage amount, energy bills and water bills. The essential basics that everyone will pay. Residue income is the income left over that you need to use on other expected costs, such as food and car.
You will be able to reduce the cost of a foreclosure rate by meeting residual income requirements with your VA lender. VA loans lead to one of the lowest foreclosure rates compared to other lending options. That’s because veterans who have proved they can earn income to meet their financial obligations prepares them for any emergency financial times they may run into.
You can calculate your residue income by looking at your monthly income, before taking away the monthly expenses you have. You will need to have evidence of your residual income to get started with a VA loan. You can consult with VA loan experts such as Hero Loan, who can tell you all about any VA home loan income requirements you will need alongside any questions you have.
Calculate Other Future Expenses And Incomes
It will benefit you to calculate your future expenses. This could mean a car you are saving up for, or any other financial projects. It is possible that you could have a different income over a five-year period, so you could strive for a promotion to open more opportunities. Consider creating a five-year plan.
Calculate How You Will Save Money
It is also advisable for you to make savings where possible. That could mean looking at any residue income you have and setting aside a regular amount to go into a savings account. Speak to a financial expert so that your money is being set aside correctly.