VA loans aren’t generally as strict about your debt ratios as many conventions loan programs are. Ideally, your total Debt To Income (DTI) ratio should not be above 41 percent, but even if it is, the VA accounts for compensating factors that may allow for a higher ratio. The VA puts considerable emphasis on your disposable income, as people who have to cut back too severely to make their payments are more likely to default in the long run. Higher disposable income can compensate for a higher DTI ratio.
- Your total debt ratio can’t be higher than 41% on things including total house payment, credit card minimums, student loans, and personal loans.
- Compensating factors such as having a high amount of assets or a high credit score can help you get a loan.
- The VA doesn’t actually give loans, but they do provide a guaranty to pay the loan up to a certain amount should you default.
“If there’s one factor that means the most to the VA, it’s your disposable income that you have each month.”