Getting out with a family

Madden86

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Hello,
I am new to the forum and am at the start of my PEB in the navy. I have been in the navy for 10 years. I plan on being discharged but I am unsure of what type of rating I will receive from the VA. I will complete the remainder of my C&P exams today.

My wife has been stressing out due to the unknown. My wife is unemployed and We have 2 small children and plan on moving back home upon discharge. My question is will I be able to use my VA benefits to purchase a home? Has anyone else had a similar situation? I also plan on using my GI bill for school. I'm just looking for some sort of hope at this point. Any advice would be helpful, thank you for your time!
 

tony292

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what conditions are putting you out of the navy? what rank are you? if junior enlisted, then the DOD percentage may not be as high as the VA percentage. how much you will make has a lot of factors built in. Yes you will be able to use your VA home loan but you'll need a good credit score and income after the Navy to qualify for a mortgage. I would start networking in the town you plan to live now so that you may have some job prospects lined up. polish up your resume.
 

Madden86

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I'm getting out with anxiety nos, depression, ADD, GERD, tinnitus, subdural hematoma, and a fractured left arm on my claim. I have been in for 10 years and I am an e-5. I have to take medication daily for the anxiety/depression, ADD and GERD.
 

Camp P Marine

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Just an FYI waiting until you have your ratings could save you thousands for the VA home loan funding fee waiver.


You do not have to pay the fee if you are a:

  • Veteran receiving VA compensation for a service-connected disability, OR
  • Veteran who would be entitled to receive compensation for a service-connected disability if you did not receive retirement or active duty pay
http://www.benefits.va.gov/homeloans/purchaseco_loan_fee.asp
 

chaplaincharlie

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@Madden86

You can use your GI bill to get a house with an honorable discharge. The wait gets to most people on this board. Things have been moving quickly lately, so your timing is great. What do plan to study in school?
 

Madden86

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I want to go to school to be an IT. I have always been good with computers and very tech savvy. I didn't think they would accept the GI Bill as a source of income though for the VA loan.
 

scoutCC

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It will depend on the bank, or more specifically the underwriting. Some will treat income as income, they don't care that much about the source. Some will care about how well established the income is and how long it will remain in effect, that sort of thing. It may take a little bit of bank shopping. The VA itself imposes no rules about what sorts of incomes will work that I know of.
 

brokenwings

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what conditions are putting you out of the navy? what rank are you? if junior enlisted, then the DOD percentage may not be as high as the VA percentage. how much you will make has a lot of factors built in. Yes you will be able to use your VA home loan but you'll need a good credit score and income after the Navy to qualify for a mortgage. I would start networking in the town you plan to live now so that you may have some job prospects lined up. polish up your resume.
If you have served for atleast 10yrs and still a junior enlisted because the JOB isn't as fancy as the others to get you promotion, why does the rating have to be base on that? I believed what you are saying though as I have seen it a lot happening to many but wasn't the rating supposed to be based on our Medical conditions and atleast for how long we all equally make the sacrifice to serve regardless of rank??
 

chaplaincharlie

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@Madden86

Congratulations on choosing a career field with lots of opportunities. There are several certifications that are crucial to getting into the IT arena.

I suspect that getting financing with only VA benefits would be a challenge, but would imagine that those benefits would be considered by the underwriters. A lot depends on how much you want to finance, how much you are paying down, ....

Best wishes as you transition.
 

tony292

PEB Forum Regular Member
PEB Forum Veteran
Brokenwings,

When DOD calculates your pay there is option A or option B. Rank and years in service might make one or the other larger. From DFAS:

Your retired pay will be computed using one of two methods:

  • your disability percentage (using a minimum of 50 percent for payment purposes while on the TDRL), referred to as Method A, or
  • your years of active service, referred to as Method B.
Your pay will be computed based on whichever is more beneficial for you.
 

tony292

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PEB Forum Veteran
Bottom line is he needs to get his CP exams back and compare VA vs DOD percentages. VA compensations percentages are identical no matter rank or years. DOD is completely opposite. There are online calculators for both.

I personally am 100% both sides. But 100% VA pays 3200 per month with a wife and two kids. 100% DOD = 75% of my high 36 months, regardless of dependents or not, it is a calculation made on base pay only, and that will vary widely based on rank and years of service, and as an O3E over 18, that ends up being 5000 per month for me. In the end, I'll get the method (A or B) more beneficial to me, because that is the way the rules and laws are written. So I'll end up with 3200 VA and 1800 DOD for a total of 5000 based on O3E over 18 x 75%.

I'm not saying it is right or wrong, just that it is what it is. As an E5 at ten years, he will more likely be better off trying to max out his VA side. For me it was more beneficial trying to max out the DOD side.

VA makes jumps and leaps, look up the differences in 70,80, 90 and 100 percent on the VA side, it is about as non linear as can be.... Do some simple calculations based on 80, 90 or 100% of E5 over 10 pay and compare that to the same percentages VA. Results will be vastly different. It is NOT linear like DOD ratings are.... Again, I don't make the rules, and you may not think the rules are fair, but they exist.

http://vvaarizona.org/combined_disability.php

http://www.vvaarizona.org/va_comp_calc.php

http://www.dfas.mil/dam/jcr:b6ef41d4-f071-45f9-b863-70b202be05a6/2015MilitaryPayChart_2.pdf

So his base pay is 3107. So even if he maxed the DOD side at 100%, he would not make more than the max 100% VA side with 4 dependents of 3400. However, due to the extremely non linear nature of the VA side, if he was at say 70 percenton both sides, he may in fact make more on the DOD side, As 70% VA is 1401 and 70% DOD is 70% of his E5 over 10, or 70% of 3107 would be 2174. So close to 400 more on the DOD side if he was rated 70% each side. This is quite a large difference and the reason I initially asked for his rank and years of service. Rank and years of service absolutely matter, a great deal in final compensation determinations.
 
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Madden86

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Thanks for the responses. All of my C&P exams have been completed. Just waiting to go over the NARSUM.
 

pittpan2005

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For mortgages, GI Bill and Voc Rehab stipends are not considered earned income. However, underwriting will look at is as "other" income for painting the larger picture. While not calculated into your monthly income, it is an outlier that may help appease them.

They want to see a current or expected 24 month income based on VA or DoD compensation (plus other compensation). Many lenders gross up your non-taxed income (VA and SSDI) 20% to 25% for income purposes.

When you start shopping ask what the banks/credit unions overlays are. Some have "hard" debt to income ratios and others do not. Ask about reserves, whether they gross up, etc.

As pointed out above...no VA funding fee. Ask questions before you have them pull your credit score. This allows you to know which lenders are likely to work with you and which will not. It saves you time, credit score reductions, and doesn't cause you to be mislead or misinformed.

If you have questions feel free to ask or PM me. While I would give up all I have earned and receive for my health to be returned, I leveraged my position after being medically retired. When I got out in 2010 I had a sub 600 credit score, high medical bills, and no savings. Five years later I own 5 houses (1 primary residence and 4 rentals), and our business is growing. It takes work, but if I can do it so can anyone.

Start small and find your way.
 
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