income is a calculation that estimates the net monthly income after subtracting
out the federal, state, local taxes, (proposed) mortgage payment, and all other
monthly obligations such as student loans, car payments, credit cards, etc.
from the household paycheck(s). Also included in the calculation is a maintenance &
utilities expense. The net income must exceed VA residual area income charts. The residual income calculation attempts to discern whether the veteran borrower(s)
has sufficient income for gas, groceries and other typical household necessities.
The residual calculation is actually more important to the VA than the customary
debt to income calculation.
"VA’s debt-to-income ratio is a ratio of total monthly
debt payments (housing expense, installment debts, and so on) to gross monthly
income. It is a guide and, as an underwriting factor, it is secondary to
the residual income". Source: VA Pamphlet 26-7, Revised Chapter 4: Credit
If the debt-to-income ratio is greater than 41%, the
borrower's residual income must exceed the area residual income by at least
The VA loan calculator will estimate the debt to income ratio
and residual income. The monthly income calculator will convert year to date,
biweekly, semi-monthly and other income calculations into monthly income.
According to the Veterans Administration all family
members (without regard of the relationship) must be
counted in determining “family size,” including: an
the spouse of the applicant who is not joining in the
title of the residence or on the mortgage note, and
any other individual(s) who depend on the applicant
for support. For example, children from a spouse’s previous
marriage who are not the legal dependents of the applicant.
Lenders are permitted to exclude any individuals from
“family size” who are fully supported from a verified
income source which, for any reason, is not included
in the effective income in the loan analysis. For example:
child support that is regularly received, or sufficient
foster care payments received for a child,
a spouse who has stable and reliable income sufficient
to support his or her living expenses and is not obligated
on the note
► Can you be denied a VA home
Yes. The VA home loan is offered to eligible veterans
who are gainfully employed, have a good credit history
and score and meet all the normal mortgage guidelines.
► Can you do a 15 year VA loan?
Yes. Lenders offer 15 year loan terms for VA loans.
The calculators and information contained herein are made available to
you as a self-help tool for illustrative use only. Examples are hypothetical.
We can not and do not guarantee the applicability or accuracy in regards
to your individual circumstances. I encourage you to seek personalized advice
from qualified professionals.