How do you interpret the VA residual income chart?


Quick Answer

A borrower can determine the amount of residual income needed to qualify for a Veterans Administration mortgage by finding his household size and region on the chart. Residual income is the amount of money a borrower needs available each month after housing, taxes and debt repayment, says Military.com.

Continue Reading

Full Answer

Residual income thresholds vary by household size and region. Military.com states that the minimum residual income as of July 2015 is $441 per month for a family of one person in the Midwest or South regions of the United States. The maximum residual income is $1,318 for a family of seven people in the West region. The residual income thresholds are premised on a loan value of at least $80,000.

The VA loan program provides mortgages to United States Armed Forces veterans with no down payment required, says The Mortgage Reports. To help ensure that these loans are repaid, the VA requires that borrowers have sufficient residual income to pay their bills and have money leftover. Military.com explains that residual income is one factor among many considered by VA lenders when approving or denying a mortgage. In fact, even if a borrower meets the residual income threshold, Military.com points out that a high debt-to-income ratio may lead the lender to require additional income.

Learn more about Credit & Lending

Related Questions