Reader Question: Do I Qualify for a VA Loan?

I received this question on a comment and thought I’d share my response via a post.

Happy New Year,
I am contemplating a return to the Tri Cities and would like to utilize my VA 0 down loan in the amount of $250,000 or less. My income is based of a civil service pension, social security and VA disability.  The total gross amount I currently receive is $4,400 monthly.   Am i going to be able to qualify for the VA  (or any other)loan?

Thanks in advance,
Greg

VA’s standard guidelines allow for a debt to income ratio of 41%.  This means that Greg’s total monthly mortgage payment and monthly debts should not exceed 41%. 

41% of $4400 is $1804. VA guidelines would probably allow $1804 for total proposed mortgage payment and monthly debts.

The current mortgage payment for a $250,000 zero down VA purchase would be roughly $1422 (including taxes estimated at $260.50 and insurance at $50 per month).  

This is based on rates as of 3:00 pm on January 3, 2012 of 3.250% (apr 3.430) for a 30 year fixed VA loan based on credit scores of 720 or higher. 

The proposed mortgage payment of $1422 less the $1804 allowed monthly debt (for the 41% debt to income ratio) leaves around $382 per month for other possible monthly debts (car loans, student loans,  credit cards, child support, etc.).

So if Greg has less than $382 per month in other debts, he would qualify for a $250,000 home (also assuming taxes and insurance are around what I’ve estimated).

BUT WAIT… there’s more…

If Greg’s social security income may be able to be grossed up by 15%, which would allow him to have a little more “wiggle room” with the amount of monthly debt.

In addition, if he is a disabled veteran, he may qualify to be exempt from the VA funding fee which would  also reduce his payment by about $23.00 (apr 3.261).  This would allow for $400 in monthly debt (not including if the social security income is able to be grossed up) with Greg qualifying for a $250,000 home in the Tri Cities.

If you are interested in applying for a VA, FHA or conventional loan for a home anywhere in Washington state, please click here.

Sunday Drive to the Tri-Cities: Washington’s Wine Country

Cari_2Editors Note: This Sunday Drive is brought to you by Cari McGee who knows her way around Richland, Kennewick, Pasco and surrounding towns as a Realtor in the Tri-Cities for Windermere.  Cari is also the author of The Real Estate Blog by Cari McGee.

Now that gas prices are back at feasible levels, you should think about taking a drive over to the OTHER side of our fair state.  The Tri-Cities (3-4 hour trip by car, depending on how fast you drive and what the traffic on the Pass is like) is a great place to spend a peaceful Sunday afternoon.

Now, I’m not an outdoorsy type of girl.  When I have free time, I’m curled up on the sofa reading a novel that takes place near a town that ends in ‘shire and where all the houses sport Aga ranges.  However, I realize that not everyone is like that.  In addition, one big reason anyone would come over here from Seattle is to enjoy the sunshine we see on more than 300 days in a year. So, the list of possible activities here include boating, fishing, golfing, shopping, and my new favorite – wine-tasting.

Carivines One sip of alcohol and I become flushed, my heart beats wildly and I feel light-headed.  Strangely, it’s not all alcohol that does it (or maybe it IS but because I love champagne and daiquiris so much I don’t notice it when I drink them!). Usually, though, one sip of wine begins the process and I can’t have more than three or four sips before I quietly set the glass down and go look for a diet Coke. So it was a great surprise to me to go winery-hopping through the Tri-Cities and have a GREAT time doing it because the whole flush thing didn’t happen!

Due to Eastern Washington’s location on the lee side of the Cascades, the entire areaCaribarnardgriffin  is sheltered from the more dramatic marine climate. A mix of light rainfall and irrigation from nearby rivers provides the ideal amount of water for growing grapes. The Tri-Cities is in the South Columbia Valley, which is part of the vast Columbia Valley Appellation.  Wines have been produced in the region only since the mid 1980’s, and yet the quality and reputation of the wines here is exceptional.

Three wineries are very close together along Tulip Lane in Richland; Barnard Griffin, Bookwalter and Tagaris.  One of them offersCaribookwalker  tastings for free, and the other two charge 5 or 6 dollars, but that is refunded if you buy a bottle of wine.  Breadsticks and crackers or chocolate chips provide a break for your palate in between selections and the atmosphere is laid back and relaxed.  The pourer will chat you up or let you and your group do all the talking, whichever option you wish.                                                       Caritagaris

Travel fifteen minutes away from those wineries (and the joke in the Tri-Cities is that everything is just fifteen minutes away from everything else) and you’ll find Badger Mountain/Powers Winery.  The vineyard at Badger Mountain is a certified organic winery, and so the wines made from grapes harvested there taste a bit differently than traditional wines.  There are no added sulfites as well, and even I, an inexperienced wine-drinker, noticed the difference.Caripowers

Further away than the famous fifteen minutes allows are Hogue Cellars (closer to Prosser), and Preston Wineries (out beyond Pasco).

Jump in the car some Sunday morning, zip across the state and enjoy some fantastic wine by mid-afternoon (or golf, or fish or shop!). There are all kinds of things to do here in the Tri-Cities, pick your fun and dive into it.  We’d love to have you!