When getting a VA loan, it is possible that you are “on the bubble” regarding getting approved for a VA loan. This is where the term compensating factors comes into play because there are other things that an underwriter can look at.
Here is a list of items that may be considered compensating factors for VA loans:
- Excellent credit history
- Conservative use of consumer credit
- Minimal consumer debt
- Long-term employment
- Significant liquid assets
- Sizable down payment
- The existence of equity in refinancing loans
- Little or no increase in housing expense
- Military Benefits/Non-taxable income not being ‗grossed-up‖.
- Income not being used in qualifying
- Satisfactory homeownership experience
- High residual income
- Tax credits for child care
- Tax benefits for home ownership
Compensating factors may vary from lender to lender – so be sure to check with different lenders if you are on the bubble. Have questions about getting approved for a VA loan? Be sure to check with a VA-approved loan officer – just fill out the form below to get started. Each lender has different underwriters who look at things differently – which means it is all that much more important to get multiple quotes from multiple VA approved lenders for your situation.
Get started by submitting your information below and get matched with a leading VA approved lender today.