Posts Tagged “VA credit”

Chapter 13 Bankruptcy FHA Home Purchase TheZerodownloan.comit’s a little known fact amongst Homebuyers, Renters, Realtors and even Loan Officers that both FHA and VA allow a Borrower to purchase a home after they’ve made 12 timely payments on a Chapter 13 BK.
Wait! What? Yes you read that right.
Why is this important? It’s important because while grappling with many unpaid collections, charge off’s and judgements, a Borrower’s credit score remains low and unable to revive. This keeps them from FHA financing.
Bringing all that unpaid debt, all the dirty laundry so to speak, under the governance of the Bankruptcy Trustee forces the credit bureaus to begin reporting each of those negative accounts as “INCLUDED IN BANKRUPTCY”.
The magic is this: When a trade/account is reported in this way, the FICO (Credit) Scoring model treats the accounts as “non-rated”.
Their negative effect is diminished!
Now a smart homebuyer would couple this with obtaining maybe 2 or 3 **secured** credit cards which are virtually guaranteed, pay on them for 12 months alongside the Bankruptcy Trustee payments and . . . voila! After 12 months of filing Chapter 13 the Borrower has a better score *AND* some re-established credit.
It’s important if using this maneuver to not leave any unpaid collection/charge off outside the BK filing.
For more details on purchasing a home while in Chapter 13 Bankruptcy, contact us at 877-332-9703 or through the links on this blog site.

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Did you know that whereas FHA loans limit Seller contributions for Closing costs to 6% of the purchase price, with a VA Loan, the Seller can make not only 4% concessions towards Closing Costs but another 4% towards Veterans’ other costs including paying off consumer debt to allow the Veteran to qualify ? !

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The answer is yes, with some restrictions.
The Veteran homebuyer has to live in/occupy one of the units as his/her principal residence.
The Veteran homebuyer cannot use the rental income he/she will acquire from the other units, to qualify for the VA loan.

The good news is that the VA Loan will finance 100% of the purchase price, even on 2, 3, or 4-unit property.

For more information on VA loans, check out the VA Homebuyer Webinar recording here . . .VA Homebuyer Webinar

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Yes he/she can! And yes , with a VA loan!
Federal Tax Liens are basically the last stage of the collection process by the Internal Revenue Service, after a Levy.
A lien basically ties up assets owned by the debtor.
How can a VA loan be approved under these circumstances ?
If the Veteran has a Payment plan (Installment repayment agreement) with the IRS, and has been making the payments on time for at least the past 12 months (which can be documented for the VA Underwriter), then the Veteran can indeed be approved.
How does the VA Underwriter deal with the CAIVRS alert that will surely come up?
The approved repayment plan will allow the CAIVRS to be cleared. (Federal IRS tax liens are allowed to stay unpaid if the IRS subordinates the tax lien to the VA mortgage.)
Watch our VA Homebuyer Webinar series here Click Here : VA Homebuyer Webinar

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Basic Facts First: On a VA home loan, the Veteran’s spouse’s debt obligations have to be counted against him/her when qualifying even if the Spouse will not be a borrower on the VA loan (i.e. “non purchasing spouse”).
Underwriters therefore add up all the monthly debts belonging exclusively to the spouse and count them against the Veteran (Borrower).
And since the spouse is not signing on the loan, his/her income, if working, is typically not used.
However a very little known fact is that VA actually allows *THAT PORTION OF THE SPOUSE’S INCOME THAT IS EQUAL TO THE MONTHLY DEBT OF THE SPOUSE**** to be used to offset the debt.
Confused?
Here’s an example

Veteran has $5000/mo income and $1000/mo debt of his/her own
Spouse has $2000/mo income and $700/mo debt of his/her own

We can use $700 ** of the spouse’s $2000mo but no more*** to offset the debts.

This gives us total debt of $1700/mo but total useable income of $5700/mo.

Thanks Vets for serving our country! :)

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