How Many Times Can You Use A Va Loan
Getting a VA loan isnt a one-time deal. After using a VA mortgage to purchase a home, you can get another VA loan if:
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You sell the house and pay off the VA loan.
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You sell the house, and a qualified veteran buyer agrees to assume the VA loan.
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You repay the VA loan in full and keep the house. For one time only, you can get another VA loan to purchase an additional home as your primary residence.
How Can Divorce Affect A Va Loan
The VA loan is designed to help veterans achieve the dream of homeownership. With that, there are very strict occupancy requirements that you wouldnt have to worry about with most other types of mortgages.
First, ex-spouses of service members arent eligible for a new VA loan. Thats a relatively cut and dried rule. But if you and your former spouse are on the same VA loan together, it gets a bit more complicated.
In the event of a divorce, the civilian spouse can remain in the home if they were a co-signer on the loan. But if the civilian spouse wasnt a co-signer, they cannot stay in the home if the veteran has moved out.
If the civilian spouse keeps the home, and the mortgage, there are also entitlement issues to consider. The service member wont be able to restore their entitlement until their ex refinances the loan or pays off the existing VA loan.
The finances post-divorce are never easy. But a VA loan can throw more complications into the mix.
Option : You Can Be The Sole Borrower
If you qualify for a VA loan on your own, you can be the sole borrower on the mortgage. This means you would be fully responsible for making prompt mortgage payments. Any payment default would negatively affect you, but not your partner.
While its legally possible to have a partner listed on the deed even if they are not listed on the mortgage, most lenders wont allow this because they do not want your partner to have an ownership claim without also having to share in the mortgage debt responsibility.
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If Your Spouse Is Not A Veteran
Only one spouse needs to be eligible for a VA loan in order to secure the full guaranty. In fact, its common for couples consisting of a service member or veteran and a person not in the military to use a VA loan to buy their home. According to the Lenders Handbook VA Pamphlet 26-7, the requirements for spouses vary depending on whether or not their names will be on the loan. If a spouse is not participating in the purchasing process, their credit history doesnt need to be considered, but their debts do factor into the calculation as part of the households liabilities. If a spouse will be contractually obligated for the loan, then their income, credit, and debts should be verified and weighed just like the vets. The spouses income will also come into play if the vet is relying on their spouses income to qualify for the loan or counts alimony, child support, or maintenance payments as part of their income.
What if you live in a community property state? As The Mortgage Reports explains, community property states consider assets and liabilities amassed during the marriage to be jointly owned. Therefore, vets applying for a VA loan in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin should expect for their nonmilitary spouses credit, income, and debts to be reviewed whether theyre contractually obligated for the loan or not.
Can An Unmarried Couple Get A Va Loan
One of the most common questions VA loan officers hear is, Can I get a VA loan with my girlfriend ? And the unsatisfying answer is it depends.
VA loans come with lots of benefits, including 0% down payment options and the ability to purchase multi-family residential buildings with up to four units . But these benefits are reserved for qualified military service members, veterans, and their spouses. If youre not legally married, your partner doesnt qualify for your VA benefits. But that doesnt necessarily mean you cant buy a home together. It just means you may need to think outside the box to make VA loan requirements work for you.
So lets take a deeper look and explain the answer to the question, Can an unmarried couple get a VA Loan?
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Va Loan Assumption Fees
In addition to paying 0.5% funding fees, lenders are also permitted to charge a reasonable fee for assumption plus the cost of credit score reports. The funding fees must be paid within 15 days of assuming the loan.
According to the VA mortgage rules listed in the loan handbook by the VA, a lender with automatic approval authority can charge a lenders fee of $300 plus the credit score report cost. A lender without automatic approval authority can charge up to $250, excluding the credit score report cost.
Additional fees might imply depending upon state laws and your circumstances.
While paying a 0.5% funding fee is mandatory for loan assumption, if your situation fits any one of the following, you might be exempt from the fees altogether.
- You receive VA compensation for a service-related disability.
- You are eligible to receive VA compensation for a service-related disability.
- You receive compensation for pre-discharge disability.
- You are a spouse of a Veteran who either went missing in action , was a prisoner of war , died in the line of duty, or died from a service-related condition.
What Are Todays Va Mortgage Rates
VA home loan rates today are low, much lower than those of conventional loans. This is why these mortgages are a favorite among the military community.
Get a VA loan rate quote, which does not come with any obligation, but does come with your live credit scores. You dont need to disclose your social security number to get started, and requesting a quote takes just minutes.
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What If I Can’t Pay The Mortgage
If you’re unable to afford the payments, there are a couple of options.
First, you can sell the home. Selling is one way to avoid unaffordable payments that could lead to default or foreclosure.
If selling is the last resort for you, the other option is refinancing. If there’s enough equity in the home, you could potentially reduce payments by extending the life of the loan – as long as you qualify.
In either case, your first step is contacting the mortgage servicer or original lender to inform them of the Veteran’s passing. Once notified, they can guide you through transferring the mortgage with your specific financial situation in mind.
Q: Only A Portion Of My Eligibility Is Available At This Time Because My Prior Loan Has Not Been Paid In Full Even Though I Dont Own The Property Anymore Can I Still Obtain A Va Guaranteed Home Loan
A: Yes, depending on the circumstances. If a veteran has already used a portion of his or her eligibility and the used portion cannot yet be restored, any partial remaining eligibility would be available for use. The veteran would have to discuss with a lender whether the remaining balance would be sufficient for the loan amount sought and whether any down payment would be required.
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Assistance From The Social Security Administration
- Monthly Social Security payments are paid to a spouse or a divorced spouse with children of the deceased service member under the age of 16, or disabled children in their care who meet the eligibility requirements.
- Monthly payments are also paid to children under the age of 18, or 19 if they are full-time students, or older children who were disabled before the age of 18.
- The amount paid will be determined by the Social Security Administration.
- Up to $255 in Social Security benefits may be paid to the surviving spouse living with the member at the time of death.
- If there is no surviving spouse, the sum is paid to the child or children who are eligible for Social Security benefits for the month of death.
- If more than one child is eligible for the month of death, the sum is divided equally among all such children. No other survivors are entitled to this benefit.
Dependency And Indemnity Compensation
This compensation is an important part of an eligible survivors long-range financial planning. It is paid to eligible survivors of active-duty service members and survivors of those veterans whose deaths are determined by the VA to be service-related.
- It is a flat monthly payment, independent of the pay grade of the veteran. This payment is adjusted annually for cost-of-living increases and is non-taxable.
- To help ease a survivors transition, the VA also adds a transitional benefit of $270 to the surviving spouses monthly DIC if there are children under age 18.
- The amount is based on a family unit, not individual children.
- It is paid for two years from the date that entitlement to DIC commences, but is discontinued when the child reaches age 18, or under the age of 23 if attending school.
- This benefit is payable for the life of the spouse, provided the spouse does not remarry before the age of 57. However, should a remarriage end, DIC benefits can be reinstated.
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Lenders Role During Va Loan Assumption
The lenders participation during VA loan assumption depends on whether your loan closing date was before or after
If the loan was closed before March 1, 1988, the lenders approval is not required as these loans are freely assumable. However, if your loan was closed after March 1, 1988, you must get in touch with a VA-approved private lender who can work with assumable mortgages.
Original owners must also ask their lenders to obtain the mortgage liability release as it could protect your if the new owner defaults on paying back the loan.
While certain circumstances do not require a lenders participation, it is important to get in touch with one to get a better understanding of the process for assuming a mortgage.
A Little Known Tip Re: Dealing With Spouse’s Debts On A Va Loan
April 19, 2011 at 8:36 pm By admin
Basic Facts First: On a VA home loan, the Veterans spouses debt obligations have to be counted against him/her when qualifying even if the Spouse will not be a borrower on the VA loan .Underwriters therefore add up all the monthly debts belonging exclusively to the spouse and count them against the Veteran .And since the spouse is not signing on the loan, his/her income, if working, is typically not used.However a very little known fact is that VA actually allows *THAT PORTION OF THE SPOUSES INCOME THAT IS EQUAL TO THE MONTHLY DEBT OF THE SPOUSE**** to be used to offset the debt.Confused?
Veteran has $5000/mo income and $1000/mo debt of his/her ownSpouse has $2000/mo income and $700/mo debt of his/her own
We can use $700 ** of the spouses $2000mo but no more*** to offset the debts.
This gives us total debt of $1700/mo but total useable income of $5700/mo.
Thanks Vets for serving our country!
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Va Home Mortgage Limits
You might be wondering exactly how much house can you buy with a VA loan. According to the VAs loan limit documentation, eligible veterans, service members, and survivors with full entitlement no longer have limits on loans.
With that being said, it is still up to your lender to determine how large of a mortgage you can borrow. Your mortgage banker will determine the size of loan you can afford by assessing your credit history, income, and any assets you may be holding.
Q: I Sold The Property I Obtained With My Prior Va Loan On An Assumption Can I Get My Eligibility Restored To Use For A New Loan
A: In this case the veterans eligibility can be restored only if the qualified assumer is also an eligible veteran who is willing to substitute his or her available eligibility for that of the original veteran. Otherwise, the original veteran cannot have eligibility restored until the assumer has paid off the VA loan.
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Protecting A Couple’s Credit
You can also leave one persons name off the mortgage to avoid potential damage to both credit scores.
Even if you have every intention of making your mortgage payment and fulfilling your obligation, unexpected events might make it difficult to afford your mortgage in the future.
This can include a job loss, an injury, or illness.
If you default on your payments and both of your names appear on the loan, both of your credit scores suffer.
But if only one persons name appears on the mortgage, this can potentially protect the other spouses credit.
And with one person maintaining a clean credit file, it might be easier to apply for future loans.
Where To Get Help With Va Loans
VA loans offer exceptional benefits, but they can be difficult to navigate, particularly if youre looking to qualify for a mortgage as an unmarried couple. At OVM Financial, we have experience with creative financing solutions, and were happy to discuss your options with you and help you find the best solution for your unique situation.
You can contact us at 757-296-2148 with any VA loan questions. And when youre ready to apply for a mortgage, you can start your loan application online.
If youd like to continue learning more about VA loans, check out this post that explains what makes a VA loan a qualified mortgage.
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Exceptions For Occupancy More Than 60 Days
The Veterans Administration states more than 60 days may be considered reasonable if both of the following conditions are met:
- The Veteran certifies that he or she will personally occupy the property as his or her home at a specific date after loan closing, and
- There is a particular future event that will make it possible for the Veteran to personally occupy the property as his or her home on a specific future date.
VA further states, Occupancy at a date beyond 12 months after loan closing generally cannot be considered reasonable by VA. The key word here is generally, because there are other exceptions where we have been successful in closing a VA loan for Veterans with outside the box scenarios. Most commonly, the issue is the Veteran or other borrower working outside the reasonable commuting distance from the property.
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Financial Strength Of The Co
Adding a co-signer to a VA loan increases the prospective borrower’s income total and makes them legally and financially bound to the loan. There’s no question it’s nice to have a bump in income, but at what cost?
If a co-signer can contribute income to the VA loan application, but has paltry credit or debt history, then the overall VA loan application will be affected, and not for the better.
VA lenders will consider the co-signer’s income, debts, liens, foreclosures, bankruptcies and credit score. VA lenders have varying requirements for credit scores and DTI ratios, but the better the co-signer’s numbers, the better chance of approval for a VA loan home.
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What Is An Assumable Loan
When a prospective borrower wants to buy a house, in most cases, they apply for and take out a new mortgage to finance their purchase. This differs from a loan assumption.
Assuming a loan is a lending process under which a borrower takes over another borrowers current mortgage. The borrower assumes the loans interest rate, outstanding balance, repayment term and other related items.
Can A Girlfriend Be On A Va Loan
VA loanloanloansloansVA
. Also to know is, can you get a VA loan with your girlfriend?
May a veteran join with a non veteran who is not his or her spouse in obtaining a VA loan? Yes, but the guaranty is based only on the veteran’s portion of the loan. Unlike other loans, the lender must submit joint loans to VA for approval before they are made.
Also, can unmarried couples use VA? Scenario 1: VA-Eligible Borrowers and Unmarried PartnersIf you plan to co-borrow with an unmarried partner or friend who’ll live in the home with you, also plan on needing money for a down payment. Remember that the VA will only guaranty the VA-eligible borrower’s portion of the loan.
Similarly, you may ask, can a fiance be on a VA loan?
VA loan rules in the VA Lender’s Handbook address this situation in Chapter Seven under the heading, Joint Loans. Chapter Seven says that a veteran and fiancé can apply for the VA loan together and be treated the same as a married couplebut the loan’s approval depends on the couple becoming legally married.
Can a non spouse be on title on a VA loan?
VA does not allow an individual to take title to a property if that individual is not on either the mortgage or a deed of trust. Accordingly, if a spouse or other owner does not want to sign a mortgage note and be obligated for a VA-guaranteed home loan that individual must sign a deed of trust.
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Who Can Be Exempted From The Va Loan Assumption Funding Fee
If you can meet any ONE of the following conditions, your funding fee for VA loan assumption may be waived.
- You receive VA compensation for a service-related disability.
- You are eligible to receive VA compensation for a service-related disability.
- You receive compensation for pre-discharge disability.
- You are a spouse of a Veteran who either went missing in action , was a prisoner of war , died in the line of duty, or from a service-related condition.
