(615) 499-6516 team@sparkmanlending.com

VA loan manual underwrite

Lets discuss manual underwriting va loans. All mortgage loans are ran through an automated underwriting system. Sometimes, the system just does not like your scenario for whatever reason. Although most lenders stop there, we dont! 

Check out my video explaining it in depth

VA loan manual underwrite

The loan team

Second, the processors need help understanding how to process those loans. So if you get past those two hurdles, you come to underwriters who don’t understand or are uncomfortable. Doing a manual underwrite on a VA loan, or the company could have a policy and say, we don’t want to do manual underwriting.

And the main reason companies will not want to do manual underwriting is that, typically, those loans are not sellable on the secondary market means they have to service that loan, and they’re stuck with it. They cannot get rid of your loan, so they’re stuck with a higher risk that they’ve got to service indefinitely.

I’m not afraid of Manual underwrites. I have got multiple servicing companies that I have relation built relationships with that will take my mango underwrites because they know I know what I’m doing, and they know I know VA loans inside and out. I’m not going to send them junk.

So if you have a logical scenario, something that happened severely, maybe it was a one-time event, a divorce, covid, you lost a job, something that was outside of your control, a death,  illness, or getting out of the military. Whatever the case, you’ve got a funky scenario, and we need to do a manual underwrite on it.

Payment shock.

The VA wants your mortgage payment to be at most 25% of your current rent or whatever you’re paying. 

So if your debt’s income ratio is between 41% and 50%, you want to have one or two compensating factors I just listed. It’s over 50%. You have to have at least three compensating factors.

VA Loan Credit requirements

Credit is a loaded question, right? Because the VA does not have a minimum credit score requirement.

However, they do have a content requirement, and the VA says if you’ve had negative, derogatory items on your credit, you have to have reestablished credit history. What that means is that you’ve reestablished yourself, uh, you’ve, you’ve shown that you’re responsible with your credit. You’re past whatever hiccups were in the past that’s behind you, and you’re recovering, and they define that as 12 months of on-time payments on a new credit since the last derogatory item was.

If you’ve got adverse credit history or negative stuff, it’s okay. Bad things happen to good people. Just make sure you reestablish good credit and have at least 12 months. Make sure you’re paying your rent on time. If you got a manual to underwrite, or if you’ve got derogatory credit and they ask for a rental history, and you’ve made late payments, it will be impossible.

Lets discuss your VA Loan Manual Underwrite scenario

So, If you’ve got a manual underwrite and it makes sense, like, don’t come to me if you can’t pay your bills on time, you don’t have any money in the bank, and you’re trying to go from $600 a month to $2,000 a month in the mortgage.

It does; it just doesn’t make sense. 

But if you’ve got a legit scenario that makes sense, and you’re like, Hey, Marshall, you need to take a look at this. Other lenders have turned me down. I am more than glad and honored that you would choose my team and me to be able to help you through this.

I’ve closed hundreds of deals and thousands of VA loans in my career, and I’m here to help you. Hit my links, contact me, and let’s talk about what you’ve got. See if a scenario makes sense, and let me help you get approved for the loan. Thanks.

I hope this helps!