VA Home Loan Eligibility

by Les
(Colorado Springs, Colorado USA)

Ask Kate about VA Home Loan Eligibility And Tipped Wages: Hello Kate, My fiance and I are trying to buy a home with a VA home loan using income from tipped wages.

Les continues... I have found that the banks are telling me that they cannot consider my tipped wages as income. Is this true for most mortgage lenders?

Kate Answers: VA Home Loan Eligibility And Tip Income

Dear Les,

Right off the bat, I'll tell you that lenders prefer to ignore tipped income for VA home loan eligibility, as well as FHA mortgages or conventional programs.

However just because they don't like the thought of qualifying borrowers using tipped wages as income doesn't mean they won't or can't. The key to success is making the lender comfortable with their decision to qualify you, using your income from tips.

Keep in mind, the person approving the VA home loan (a mortgage underwriter) must be able to justify their decision to approve VA mortgage loans. So your job is to make their job as easy as possible. This means elbow grease on your part, aka paperwork.

List of Documentation To Prepare

1. The current year's paystubs, yep, all of them.

2. Last two years W2s

3. Last two years of tax returns, all pages

4. Break down and separate the amount of tipped income and hourly wages each month. (Show hourly wages + tips = gross income)

5. Explain why tipped wages in your field of work are customary, normal compensation and expected to be ongoing.

6. Include a letter from your employer, with contact information, as additional back-up verification.

Tip: VA Home Loan Eligibility And Tipped Wages Income

Here's a tip for you. The lender wants to see, at the least, a 24 month history of tipped wages to be assured this type of income is ongoing. The tipped income will be averaged over the last two years or longer.

I have also included more tips for successful mortgage approvals near the bottom of the page. You'll find a gold mine including nuggets like How To Cure Mortgage Approval Hiccups.

Les, one more thing. I'd like to hear back from you. Let me know if this page was helpful to you. Comment here on VA Home Loan Eligibility And Tipped Wages Income.

Or Ask Kate another question here.

Best wishes,

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