Lender Overlays are some of the sneakiest guidelines that a lender can put into place and it is only for their benefit as overlays are additional loan requirements on top of the minimum guidelines as proposed for the loan program. If you are under the assumption that you are going to need a 580 FICO to obtain a loan and you get to a lender that requires a 620 or even a 640, this is a lender overlay which is a way lenders will try to prevent themselves from lending to riskier borrowers. Now before we can talk about a VA Loan Without Lender Overlays, we first need to understand what VA Loans are, who can obtain them, how to qualify for them, and what are the guidelines. First of all, if you are a veteran of the United States Armed Services you are eligible for one of the best loan programs around and it would almost be foolish for you not to take advantage of such a wonderful loan program for veterans. VA Loans have the most lenient guidelines offered and have consistently the lowest mortgage rates of any loans beating out FHA Loans and Conventional Loans for the past 3 years. If you are looking to take advantage of this loan program, you are going to make sure you have an honorable discharge from your military service as as a valid COE or Certificate of Eligibility for the service that you provided. Without a COE, there is no way that you will obtain a loan from this program as it is a requirement and you can obtain a COE for different ways of your time served:
– Served 90 Days of active duty during wartime
– Served 181 Days active duty during peacetime
– Completion of 6 years of service in the Reserves or National Guard
– The surviving spouse of a veteran who died in the line of duty or from service related injuries
For VA Loans, they are overseen by the VA or Department of Veteran’s Affairs who are in charge of creating and enforcing the guidelines of VA Loans just like the Federal Housing Administration or FHA does for FHA Loans. And just like FHA and USDA, the VA is not a mortgage lender but is only in charge of creating guidelines and insuring loans against default. Now, per VA’s discretion we can now talk about VA Loan Guidelines and how Loan Consultants can offer borrowers the best program around
– As was stated earlier, it is a requirement that a Certificate of Eligibility is obtained by the borrower which will ensure an honorable discharge and access to VA Loans.
– There is not a minimum credit score required for VA Loans, however, this is where you will definitely run into lender overlays depending on the lender you choose to go with. From experience, here at Loan Consultants we will lend to the lowest FICO scores around which is 580 when other lenders are requiring 620 and 640 FICO scores for loan approval.
– There is also not a defined debt-to-income ratio that needs to be followed and each loan should be evaluated on a case by case basis to ensure the proposed borrower will be able to make the mortgage payment on a monthly basis.
– If you have run into some derogatory events in your past there are some mandatory waiting period you are going to have to abide by before you will be able to get a VA Loan and they are as follows:
o Chapter 7 Bankruptcy: 2 Years after discharge date
o Chapter 13 Bankruptcy: VA Loan available while still on the payment plan as long as there have been 12 months of timely payments and a means test that shows the borrowers can afford the mortgage they are looking for
o Foreclosure / Deed-in-Lieu of Foreclosure: 2 years after the recorded date of the sheriff’s sale or when the property is taken out of your name
o Short Sale: 2 years after short sale date
– If you have outstanding collections whether they are medical or non-medical or if you have charge-off accounts, there is not a requirement to pay these off in order to get VA Loan approval.
If you are looking for a VA Loan Without Lender Overlays then you are in the right place as here at Loan Consultants we can lend to the bare minimum of guidelines and are an industry-wide leader in only working with lenders that do not put lender overlays in place on their loan offerings. There is a multitude of lender overlays that can be put in place as you can see by the list below:
– Credit Score: This is a tricky one as VA does not enforce or suggest a minimum credit score, but unlike other lenders that require a 620+ FICO, our requirement is only a 580 FICO
– Debt-to-Income Ratio: VA does not require a debt to income ratio and neither do we and we have gotten loans closed with DTI ratios approaching and surpassing 60%! This is a lot higher than most lenders who want to see a DTI ratio of 45% or less.
– Collection Accounts and Charge-Off Accounts: A lot of lenders will require you to pay off all collection accounts no matter if they are for medical or non-medical issues. If you work with us, we will not require you to pay these off and we will insist you keep that money in your bank account than with a creditor.
As you can see, there are some of the common lender overlays that you can possibly run into when working with lenders to obtain a mortgage. Now if you are looking for a VA Loan Without Lender Overlays or any VA Loan in general, you need to reach out to us today as we can ensure that we can work with all types of borrowers and their specific scenarios. We will work directly with you to develop a plan to get you in the VA Loan you worked hard to obtain access to. There is no reason you should go through the struggle of other lenders and jump through hoops in order to get your loan done. If you have done your research and are familiar with the minimum requirements needed for a VA Loan, then we should have no problem taking care of you and getting your deal done! Aside from no lender overlays, while working with Loan Consultants we will do everything we can to get your loan closed in 21 days where the industry standard is well over 30 days. We pride ourselves on closing loans as quickly as possible so we can get you in the new home sooner than later. If all this sounds good to you, then you need to reach out immediately and we can get you started on the path to home ownership in no time. As we talked about, VA Loans have the lowest mortgage rates of all loan programs out there and given your service to this country, you deserve nothing but the best. I look forward to working with you and delivering on my statements made in this article. Please call me any time day, nights, weekends, and holidays at 888-900-1020 and let’s get started today!
Gustan Cho Associates
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