Loan Workbench: Process Qualifications for VA Loans

Loan Workbench: Process Qualifications for VA Loans




The Qualification tab is to help view and create scenarios for borrowers using their basic loan information to see if they will qualify for a VA purchase or a VA refinance loan. 

To the right, are Gauges that display visual representations of the information entered on the left. As information is modified, the gauges will move appropriately. 

Note: The information on this page is automatically populated if the data is entered in Encompass. Data that has been changed in Encompass will reflect in Command Center. 
However, if the lead went through Command Center's Lead Wizard, the data that appears in the Lead tab will appear in the Qualifications tab. Data from the Lead tab only applies if the loan has not been submitted to Encompass yet. 

Changes to the Qualifications tab stays in Command Center. It does not sync with Encompass or any other tab in Command Center. This is helpful when creating multiple scenarios with the borrower to see how they can get qualified for their loan. You can refresh the page often to view the default fields from Encompass or Lead tab in Qualifications. 

The Qualifications tab applies to loans that have: 
  • Fixed rate
  • Retail loans
  • Loan occupancy of primary residence
  • 1-unit properties
  • The VA qualifying criteria are based on the Fannie Mae and VA 2020 Guidelines 
  • Loans programs:
    • V15
    • V30
    • F15
    • F30
    • C15
    • C30


Create a Qualification Scenario

      1. Navigate to Pipeline from the left-hand menu. 
      2. Double-click on a Loan Number, and select the Qualification tab. 



      3. The Loan info is part of the Qualification tab that captures the loan information from Encompass or the Lead tab (if the data has not been submitted to Encompass yet).
 
      4. Select and enter the: 
  1. Purpose: Purchase or Refinance                                                                                
  2. Purpose of Purchase: Shopping or Under Contract (Purchase) / Rate and Term or Cash Out (Refinance)
  3. Base Loan Amount
  4. LTV 
  5. Program: C15, C30, F15, F30, V15, V30
  6. Rate
  7. Purchase Price (Purchase)
  8. Estimated Value (Refinance)
  9. PITI (Principal, Interests, Taxes and Insurance = sum components of the mortgage payment) 
          Enter the PITI information and the data will be calculated.  Select the edit icon  to enter data in the PITI fields and press  when finished. 

    2. Proposed First Mortgage is a calculation from the information entered in the Loan Program, Loan Amount and Rates fields to display the proposed monthly mortgage payment. 
  1. Down Payment Amount and Down Payment Percentage will automatically be calculated from the Down Payment Amount / Purchase Price. 
  2. Total Payment is a calculation of the PITI amount, Rent, Other Financial Responsibilities and HOA. Select the edit icon  to enter data in the Total Payment fields and press  when finished. 

  3. Appraised Value
  4. Borrower's first time taking a VA loan: Yes or No
  5. VA Residual Income Guideline to view the minimum residual monthly income the borrower(s) needs to have. 
    1. Enter the: VA Family Size and select the Region. A minimum monthly income will be populated from the information entered. 
    2. Click See Region Chart to view the Regions and States.  
    3.           
  6. Actual Residual Income is the monthly income after deductions, expenses and debts have been taken out.
    1. The Monthly Income figures are automatically entered from the Qualification Details > Total Income field. Enter the borrower(s) monthly pre-tax income in the Total Income field first, then come back to the Actual Residual Income Calculation to complete and see the borrower(s) Actual Residual Income. 
    2. Enter the:
      1. Monthly Deductions
      2. Proposed Monthly Sheltered Expense
      3. Debt
        1.  Checkmark the Debt fields to be included in the Actual Residual Income Calculation. 
        2. This syncs with the Credit and Liabilities section. 
    3. Click Save when finished. 
  7. Exempt from Funding Fee: Borrower does not pay the funding fee.
  8.       
  1. Base Entitlement
    1. "0" refers to the borrower(s) having used their entitlement on a previous VA loan and now has a partial entitlement.  
    2. $36,000 (Full Entitlement)
      1. To calculate the maximum loan amount: 
        1. Purchase (Loan Purpose), the maximum loan amount is lesser of the purchase price and appraised value.
        2. Refinance (Loan Purpose), the maximum loan amount is the appraised value. 
  2. Entitlement Used can only be editable if Base Entitlement "0" was selected. 
      5. Enter the borrower's Credit & Liabilities by clicking on . 
      6. Enter the: Type, Balance, Monthly Payments, check the box to include whether the credit and/or liability will be paid off or excluded. This is helpful when reviewing the DTI (Debt to Income) ratio gauge.
      Note: If the credit and liability item will be paid off or excluded, it will not be used to calculate the DTI. 



      7. Enter the borrower's Qualification Details. 

















      8. Select the edit icon  under each field for Command Center to sum up the total values. Press  when finished.
  1. Total Income

  2. Assets (Add more if needed)

  3. # of REO

  4. Occupancy: Primary
  5. Property Type
  6. Only 1 Unit properties
  7. Zip Code
  8. State (Automatically populated from the Zip Code)
  9. County (Automatically populated from the Zip Code)
      9.    Enter the borrower's Details of Transaction. 

  1. Costs: 
    1. Prepaid Amounts
    2. CC's (Closing Costs)
    3. MIP
    4. Discount
  2. Credits:
    1. Deposit
    2. Seller
    3. LC
    4. Other
    5. Subord (Subordinate Financing): Funds from another source, such as a second mortgage. 
  3. Cash from Borrower = Total Cost - Total Credit

How to Read the Qualification Gauges

Once the information on this page has been entered, the gauges to the right will reflect the standing if the borrower is going to qualify for the loan requested. 

Residual Income Gauge

This gauge helps view where the borrower's Actual Residual Income is in comparison to the Residual Income Guidelines to qualify the borrower(s) for VA loans. The minimum monthly amount is listed in the red section of the gauge. There are two factors used for this gauge: VA Residual Income Guideline and Actual Residual Income. The needle points to the borrower's actual residual income. 


Max Loan Limit Gauge

This gauge displays the maximum amount of money the borrower is qualified for on the loan. There are three factors used for this gauge: Loan Type, County (derived from the Zip Code) and Number of Units.  The needle is pointing to the current loan amount. 


LTV Gauge

This gauge compares the borrower's LTV (Loan-to-Value) to the maximum LTV allowed by the loan program selected. This is used to express the ratio of the loan amount to the value of home being purchased. The higher the percentage, the higher the risk of the borrower defaulting on the loan and the lender absorbing the loss.  For Purchase Loans, the LTV is calculated by dividing the Loan Amount by the Purchase Price. 


Credit Gauge

This gauge displays the minimum credit needed from the loan program selected to qualify the borrower for the loan. The Credit Score is editable, but defaults to the credit score shown in Encompass when the page is refreshed. 


DTI Gauge

This gauge compares the borrower's DTI (Debt-to-Income) ratio to the maximum DTI allowed from the loan program selected. The lower the percentage, the less debt the borrower owes then the borrower's qualification odds of receiving the loan are increased. The DTI is calculated from the (Total Monthly Payment + Total Monthly Liabilities) / Total Monthly Income. 




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