By Jonra Springs
Residual income is the amount of money left after accounting for all the expenses of a person's debt. Monthly income versus monthly debt payments is the debt-to-income ratio, which lenders use to consider customers for loan eligibility. The Department of Veterans Affairs, or VA, has established debt-to-income requirement for veterans applying for housing loans. Lenders, mortgage brokers and real-estate agents follow these guidelines to determine a buyer's VA loan qualification.Add all proposed housing costs, including monthly mortgage payments, insurance and taxes or the monthly escrow account charges.
Add the total monthly payments that the veteran makes for car loans, credit cards, alimony or child support, and other debts.
Multiply the veteran's total monthly income by 41 percent, which is the debt-to-income ratio for VA loan qualification.
Add the total monthly payments to the proposed monthly housing cost. Subtract that amount from the veteran's total monthly income to show residual income. The VA approves housing loans for veterans with 41 percent of total income remaining after subtracting all monthly costs.
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