I have to admit we were all flabbergasted when the purchase almost fell through because of the cost of the man’s train ticket to work. I’m pretty sure VA is the only type of loan that factors in this type of cost item. Is “residual income” the right term for that quirky VA evaluation during loan processing?

Coincidentally I once did a transaction with a VA loan for a man who worked for the same people your husband does. There was an issue at the end involving his cost of travel from home to work that almost, surprisingly, disqualified them at the end. It’s a quirk of VA loans that has to do with a residual income calculation not done on any other type of loan. Due to the cost of travel by train from home to work, the only way the sale closed was by my forfeiting the entire RE commission to reduce the purchase price to the level VA would loan them.

This makes Rhonda’s recommendation all the more relevant and make sure that you go to someone who does A LOT of VA loan processing and have them run it past the underwriter in advance. Finding one with an in-house underwriter and lots of VA Loan experience would be the preference.

VA will look at your last 12-24 month history more than credit scores. Late payments on your credit report may negatively impact you.

VA loans have an allowed DTI (debt to income ratio) of 41%. If you’re all ready pushed on your existing home and not able to sell it…this will put you in an unfavorable position (assuming you may have other debts).

I’m am hoping you can help me. My husband and I had bought a multi-family home in Canarsie Brooklyn back in 2007. There are two floors with two separate entrance, we bought the house with an excellent tenant on top. We got pregnant that year with twin babies and we are currently in two bedroom 1 bath of the 4 bedrom house. With the twins and 900 square footage to work with we need to move. We have no equity at this point. We are looking into purchasing a home in Staten Island for no more than $300,000, my husband is a NYC Correctional officer making 70k right now and it will jump to 100k in July and that’s not including overtime. I make 45k currently. Our credit score is a little shaky as I was on bedrest during my pregnancy. My husband credit score is 650 he is also in the military. My question is do you think he will qualify for VA loan? We have about 12k in savings right now. Will it be a good idea to get the 2nd home? We need bigger space for the kids and are thinking about doing this spring next year. Will we qualify at all for 100 percent loan at this point? As of next year we should have a good amount save but we obviously want to have emergency money should we have a problem with a tenant so we dont want to use all that money on mortgage. Your help and input will be greatly appreciated. PS my husband has been with NY Corrections for 5 years now and I have been with my company for 3 years we are both secured at work.

Leslie’s comment slipped by me somehow. Second mortgaes are much tougher to qualify for…if she’s looking to buy a home via FHA, she should try a FHA rehab loan which will allow for repairs.