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VAloanMaster

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  1. You're going to be limited to 75% of the appraised value on a cash-out refi & the rate is going to be ugly with your scores.
  2. The OP specifically stated they are looking to go VA so..... FHA, VA & USDA loans are normal mortgages (whether you personally think so or not) so not sure what you're talking about.
  3. Hi BrashDesigns, 1) Not if you're both going to be on the loan. 2) Yes, there's nothing crazy about it. 3) Unfortunately you're stuck because you did not immediately buy a new home when you left WI. Here are the VA guidelines: If the borrower has multiple properties, the borrower must have 3 months PITI documented for each property to consider the rental income. If there is not a lien on the property, 3 months reserves to cover expenses such as taxes, hazard insurance, flood insurance, homeowner’s association fees, and any other recurring fees should be documented for the property(ies). Equity in the property cannot be used as reserves. Cash proceeds from a VA refinance cannot be counted as the required PITI on a rental property. The reserve funds must be in the borrower’s account before the new VA loan closes. Gift funds cannot be used to meet reserve requirements. Analysis of Rental Property Income Each property(ies) must have a 2-year rental history itemized on the borrower’s tax return. Property depreciation claimed as a deduction on the tax returns may be included in effective income. If after adding depreciation to the negative rental income, the borrower still has rental loss, the negative income should be deducted from the overall income as it reduces the borrower’s income. If rental income will not, or cannot be used, then the full mortgage payment should be considered and reserves do not need to be considered. I've had VA loans get approved with DTIs as high as 72% so you may have a chance without counting the rental income. If not, you'll either have to wait until you have a 2 year history of rental income on your taxes or you'll need to sell one or both of the rental homes.
  4. Hi beachdreaming777, No, you don't necessarily have to pay off your collections & charge offs to get approved for a VA mortgage BUT there are a couple of caveats. 1) VA now requires lenders to count a payment in the debt ratio if a collection agency reports a minimum payment on credit. Where this really becomes a problem is CAs generally report the balance as the minimum payment. 2) Charge offs can become collections so you may want to settle them (for way less than the amount owed) to keep that from happening. This can also help your scores.
  5. Sorry but you're mistaken, FHA & VA both ignore unpaid COs.
  6. Since it's an FHA requirement, a flow test is always required. In order to meet FHA standards, the flow must be 3 to 5 gallons per minute. Anything lower than that implies an issue with the well. FHA will not allow the loan to close until the issue is resolved unless you're able to do a repair escrow or a 203K loan.
  7. HI Wj250, VA is going to be the best bet for your parents because it's more forgiving on credit issues & the rate is going to be better. In addition, VA is the only option 2 years post bankruptcy except for FHA. They need to get something going soon though because VA cash-out refis are going to be reduced to a maximum 90% Loan To Value next month.
  8. A charged off account is not a derogatory account like a collection. Charge off is the status of the account which is derogatory so if you settle the account it goes from CO to paid. Thus you change the status from derogatory to positive. A collection account is the exact opposite. Meaning it doesn't matter what the status is of a collection account, it could be paid or you could owe $10,000. In either case the account is going to negatively affect your credit. That's reason why you want to negotiate PFDs on collection accounts because that is the only way to improve your scores. When I say in my experience it means I have done rapid re-scores for clients where the scores have gone up because we settled a charge off. U/W will rarely require a charge off to be paid because the base underwriting guidelines for FHA & VA do not require it. The only reasons for addressing a charge off are to increase the score & to keep the debt from being sold to a CA & thus creating an additional derogatory hit in the form of a collection account on credit. I also caution anyone from doing anything with their credit until a qualified lender has reviewed it & run a what if simulator first to make sure anything you address is not going to hurt your scores.
  9. Hi Ronkar, What type of mortgage did you do the DIL on? Was it FHA, VA, USDA or conventional?
  10. FHA will allow you to go up to 85% of your home's appraised value on a cash-out refi. HELOCs or 2nd mortgages typically require higher scores & lower debt to income ratios because they are in 2nd position which is a higher risk for the lender. I think FHA is going to be your best bet.
  11. Hi Seeking, I do this all of the time. Here are a couple of options. 1) Contact the lenders with your car loans & ask them for a 1 time "good will" delete of the most recent late payment. 2) Settle the charge offs. For example: If you owe $1,000 offer them $200 to settle it. This does 2 things. 1) It settles the account so you don't have to worry about it being sold to a collection agency & then being reported on your credit as a collection. 2) It changes the status of the account from negative (charge off) to positive (paid) which can increase the scores. The caveat with charged off accounts is you have to look at when it was last reported to the credit bureaus. Definitely do not do anything until a lender has reviewed your credit & given you a plan of attack.
  12. Ideally your file will get approved through an Automated Underwriting System so the lender won't require a 12 month verification of rent history. Otherwise you'll want to wait until you have a clean 12 month history. If the down payment for your new home is coming from the sale of the existing home, I can see an underwriter asking for a 12 month payment history. What type of loan did you have on your existing home & what type of loan are going to apply for on the new home?
  13. Hi Bmfmustang, Yes, it sounds doable. I would have your file pre-approved through underwriting upfront to make sure you don't run in to any issues.
  14. As long as you have made your payments on time to the trustee & you have the trustee's approval, you can be eligible for an FHA or VA loan 12 months into the bankruptcy. If your bk was dismissed & not discharged, the wait period is longer.

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