Debt to Income Ratio for VA Loans

How Does Debt to Income Ratio Affect Qualifying for a VA Home Purchase Loan

When applying for a VA home purchase loan, we will calculate the Veteran’s debt to income ratio (DTI) as one of the factors used in determining whether or not the Veteran will qualify to purchase the home. When calculating debt ratio, the Veteran’s income, credit card debts, auto loans, and the new debt created by the VA mortgage are all taken into account. There is no limit to how high your debt to income ratio can be to qualify for a VA Loan.  A debt to income ratio above 50% will require strong compensating factors in order to qualify.

While debt to income ratio is certainly an important factor in determining eligibility for a VA home loan, there are other financial factors that are also considered, such as the borrower’s credit rating and stability of income. It is important to consider your financial situation before beginning the loan application process because there are many steps that borrowers can take prior to applying to improve their credit and increase their chances for approval of a VA home loan.  It’s better to contact an expert at Eagle Home Loans sooner rather than later to find out where you stand before you get serious about purchasing your home.

There are many ways to work on improving your credit before you apply for a loan, but you must plan ahead as it can take several months for credit reporting agencies to update your information.. For those with only a small amount of debt, simple steps can be taken on your own to improve your credit. The most important thing is to eliminate as much debt as possible. You can do this by limiting yourself to using only one credit card, paying off as much credit card debt as possible, paying off a vehicle, etc. Eliminating any source of debt will improve your credit rating and improve your eligibility for loan approval.  If you are not sure about where you stand it is probably a good idea to contact a loan officer at Eagle Home Loans in order to find out.

To learn more about VA Loans visit our Facebook page at or call us at 931-896-2903. We serve the Nashville, Clarksville and Fort Campbell communities and specialize in VA Loans for first time home buyers.