You know you’re a reliable and honest person, but the lender knows other people aren’t always like you. As a result, lenders have several standards to help measure your ability to repay the money you borrow.

It’s easy to see getting a mortgage from a one sided perspective. You know what you want and what your needs are, and you have the right to live in a place that accommodates those needs. But first you’ll need to convince a lender that you’re capable of managing your finances after making what most likely will be your largest purchase of your entire life.

How do lenders determine the risk they take on by lending to you? It’s called an income assessment. A VA lender takes a look at each of your sources of income and then checks it against a few standards. Not all income qualifies to be considered part of your total income, but if it passes the test, then it is considered “verified”.

VA lenders want to see that your verified income meets the following four standards:

  • -should be steady and reliable

  • -should be anticipated to continue for the foreseeable future

  • -should be sufficient to maintain the families financial obligations

  • -should generally have a two year history or more

If your income passes each of the tests, then it is on its way to becoming verified.

There are several sources of income that usually are verifiable. Here are a few common ones:

  • -Your salary and your spouse’s salary (if you’re counting your spouse’s salary, then he/she will either need to be co-signing or the purchase needs to be in a community property state.)

  • -Some military allowances

  • -Retirement income

  • -Social security and disability

  • -Child support and alimony

It’s important to understand, that for a lender, determining whether you’re a good borrower or not is not so black and white. There is some flexibility in the process. You can work with your VA loan specialist to see where there is some room to try to make adjustments and help you qualify for your new home or refinance your existing home.

As always, try to remember that the rules about income and other guidelines are there to protect you against taking out a loan that you cannot manage in your current financial situation. As you work closely with your lender, they’ll explain each part of the loan and help you with any questions you have.

Creekside Mortgage, Inc is the Northwest number one VA loan experts. Give us a call today and we’ll answer your questions.