Alternatives To Personal Loans
Personal loans can be a long-term financial commitment and work best for large, planned expenses.
For example, a debt consolidation loan and a loan for home renovation can both be financially beneficial, but taking them out around the same time can put you further in debt.
If you want to avoid taking another personal loan, here are some alternatives:
Savings: If the expense can be delayed especially if its a discretionary expense consider saving up for it first. In the meantime, try looking for other ways to make money to pay down your original loan.
Second Va Home Loan Scenarios
There are several ways you can capitalize on a VA loan more than once.
First, you could sell your current home that has a VA mortgage and purchase another home with a VA mortgage, says Atapour. Because your first house was sold or is selling at the same time you buy a new home, your VA entitlement can be restored for the purchase of home number two.
The second way is to refinance your existing VA loan into a new VA loan. This can be a good option if you want to lower your interest rate and monthly payment and/or tap into your home equity. You can choose a VA streamline refinance or a VA cash-out refinance loan.
The third way is to carry two VA loans for two different homes at the same time.
Getting Approved For Extra Mortgages
The main barrier to getting multiple mortgages is, rather simply, your ability to afford repayments on them.
If its buy to let mortgages youre after then the main criteria for affordability will be potential rental income.
With residential mortgages, the lender will need to construct a fairly detailed picture of your overall financial health. This will involve both your household income and any outgoings, from a Netflix account to your existing mortgage repayments.
As is the case with any mortgage, your will be taken into account so that the lender can have some kind of proof of your ability to pay back any money that you borrow.
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How The Va Loan Limit Is Set
Although VA loan entitlement amounts vary, the term refers to the amount of money the VA guarantees to the lender to finance a VA loan. Veterans may be entitled to two different types of entitlement, which ultimately set the VA loan limit. Your “basic” entitlement amount, which many veterans see on their Certificate of Eligibility , is $36,000 making the maximum VA loan guaranty $144,000 . But you, like many other VA borrowers, may qualify for a “bonus” entitlement of $68,250, in addition to the basic amount. Your total entitlement could be $104,250 and a maximum VA loan guaranty of $417,000.
Although $417,000 is a common VA loan limit for many counties in the United States, higher VA loan limits exist for counties in parts of the country with higher costs of living. In parts of Hawaii, for example, VA loan limits are more than $700,000. Veterans purchasing homes in those areas may be approved to finance a loan up to that amount, without a down payment.
Can I Have Two Va Loans
The unofficial slogan of VA Home Loan Centers is if you are up to date on your payments, following a short sale, we will get you in a home tomorrow. Under many circumstances, following a bankruptcy, foreclosure or short sale, a military member may qualify for a second VA loan. Veterans can use their home loan entitlements as many times as they want, providing that prior VA loans have been paid off, or if the veteran still has a remainder of their entitlement available. The VA entitlements are restored when prior VA loans are paid in full.
Beyond qualifying for a VA loan after previously using a VA loan, a prominent misconception exists regarding multiple loan uses at the same time, VA Home Loan Centers is constantly asked Can I have two VA Loans? The answer to this question varies depending on the situation, the amount of entitlement remaining and the loan amount.
Typical examples for an eligible applicant to receive a second VA loan in conjunction with the first include relocation to a new area as a result of Permanent Change of Station orders, upsizing or downsizing and essentially any factors resulting in a change of circumstance. If the individual wants to retain their home while purchasing a second home in the area of their new duty station, a possibility exists. For this to happen however, the individual must have a remaining entitlement amount following the usage of their first VA loan.
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Understanding Your Va Loan Entitlement
Your VA loan entitlement is a lifetime benefit. This means you can use your entitlement to buy or refinance a home many times over the course of your life. You’ll need to meet the eligibility standards to qualify for a VA loan. You will also need to meet Freedom Mortgage’s credit, income, and financial requirements to have your loan application approved.
Finding Assumable Va Loans
There are several ways for home buyers to find an assumable VA loan.
Believe it or not, print media is still alive and well. Some home sellers advertise their assumable home for sale in the newspaper, or in a local real estate publication.
There are a number of online resources for finding assumable mortgage loans.
Websites like TakeList.com and Zumption.com give homeowners a way to showcase their properties to home buyers looking to assume a loan.
With the help of the Multiple Listing Service , real estate agents remain a great resource for home buyers.
This applies to home buyers specifically searching for assumable VA loans as well.
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Va Loans And Second Homes
Federal regulations limit loans guaranteed by the Department of Veterans Affairs to primary residences only.
However, primary residence is defined as the home in which you live most of the year.
Therefore, if you own an out-of-state residence in which you live for more than six months of the year, this other home, whether its your vacation home or retirement property, becomes your official primary residence.
For this reason, VA loans are popular among aging military borrowers.
Forfeiting Your Va Loan Entitlement Forever
Its possible for you to lose your VA loan entitlement permanently. This can happen if you default on your VA loan, the lender forecloses and sells your home for less than you owe, and the VA has to reimburse the lender.
In this scenario, the VAs payment to the lender is deducted from your entitlement, and you cant get it back. This is also true of a short sale, in which your home is sold at a loss.
Unfortunately, you cant use your one-time restoration of entitlement benefit in the case of a short sale or foreclosure.
However, you can regain your entitlement if you pay the VA back the losses from the foreclosure or short sale, Atapour adds.
With additional reporting by Erik Martin.
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Does A Coe Mean You Are Guaranteed A Va Loan
No, having a Certificate of Eligibility doesnt guarantee a VA loan approval.
Your COE shows the lender youre eligible for a VA loan, but no one is guaranteed VA loan approval.
You must still qualify for the loan based on VA mortgage guidelines. The guarantee part of the VA loan refers to the VAs promise to the lender of repayment if the borrower defaults.
How The Va Bonus Entitlement Works
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs exclusively for active-duty military service members, veterans and eligible surviving spouses to buy or refinance a home with no down payment or mortgage insurance. The VA does not lend money but guarantees up to 25% of the loan this guarantee is called an entitlement.
The VA bonus entitlement can help you finance a home with a purchase price of above $144,000 possibly without a down payment or to purchase a second primary residence. The VA loan entitlement refers to the maximum dollar amount that the VA will pay to your mortgage lender if you go into mortgage default, or fail to repay your loan.
With VA loans, there are two forms of entitlement: basic entitlement and bonus entitlement. The basic entitlement is $36,000, or 25% of $144,000. For homes with a sticker price above $144,000, the VA provides a bonus entitlement worth 25% of the home loan amount. Lenders will let you borrow up to four times the entitlement with no down payment.
Full vs. remaining entitlement:
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Va Home Loan Overview And Advantages
What we know now as the VA home loan actually began with the 1944 Servicemens Readjustment Act. Among other benefits , this bill established the predecessor to the current VA home loan, increasing veteran homeownership via access to affordable mortgages.
Currently, the VA home loan offers the following key benefits, all of which make using the program a second time extremely appealing:
- No down payment required
- Streamlined refinance via the Interest Rate Reduction Refinance Loan
May I Have More Than One Va Loan At A Time
No. You can only have one outstanding VA loan at a time, and your VA loan must finance your primary residence not investment property, a business facility or a vacation home. “But once that loan is paid off and the home sold, a new VA loan may be taken out,” Hopkin said. You may also be able to leverage any remaining VA loan entitlement to obtain a new VA loan. Hopkins adds that there is no limit to how many times you can get a VA loan, provided you use the loan to finance the purchase of your primary residence, and you have no outstanding VA loans in your name.
About the Author
Stephanie Taylor Christensen is a freelance writer with more than a decade of experience in the financial services industry. Her work is frequently syndicated on national media outlets including USAToday, Fast Company, Real Simple and Forbes.
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Va Residual Income Rules
VA underwriters perform additional calculations that can affect your mortgage approval.
Factoring in your estimated monthly utilities, your estimated taxes on income, and the area of the country in which you live, the VA arrives at a figure which represents your true costs of living.
It then subtracts that figure from your income to find your residual income .
Think of the residual income calculation as a real-world simulation of your living expenses.
It is the VAs best effort to ensure that military families have a stress-free homeownership experience.
Here is an example of how residual income works, assuming a family of four which is purchasing a 2,000 square-foot home on a $5,000 monthly income.
- Future house payment, plus other debt payments: $2,500
- Monthly estimated income taxes: $1,000
- Monthly estimated utilities at $0.14 per square foot: $280
This leaves a residual income calculation of $1,220.
Now, compare that residual income to VA residual income requirements for a family of four:
- Northeast Region: $1,025
- South Region: $1,003
- West Region: $1,117
The borrower in our example exceeds VAs residual income standards in all parts of the country.
Therefore, despite the borrowers debt-to-income ratio of 50%, the borrower could get approved for a VA loan.
Investor From Dmv Maryland
Yes, I think many don’t know and/or have lenders who just don’t know. I literally got this reply from my lender on Monday when I asked about subsequent VA entitlement when the first loan has not been paid off.
You can obtain a second VA loan for the purchase of new home without having first paid off the current VA loan. There are some requirements that have to be met in order to obtain the second VA loan. Eligibility for 100% financing on the new VA loan is determined by the amount owed on the current VA loan, amount of the new VA loan, and the max VA loan limits for the county the new property is being purchased in. would undoubtedly have some VA loan benefit entitlement remaining but not enough entitlement to purchase a new home in this area without putting a considerable amount of cash down. The others requirements are related to the distance from the current property to the new property and whether or not it makes sense as a new primary residence. If purchasing a much less expensive property in another state, the second VA loan could possibly be the best option but if purchasing locally a property at a price that is in the same ball park or higher than what you owe on your current VA loan, VA either wont be an option or wont be the best option.
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Using Multiple Va Loans At Once Is Possible Often With No Money Down
A fairly common occurrence for Veterans is the need for having multiple VA loans at once. This is called accessing a Veterans bonus entitlement or 2nd tier entitlement. Many do not realize that this is even a possibility. This financing option available through the Veterans Administration is available to service members, Veterans, and qualified surviving spouses not just once but twice.
Va Loan Entitlement: What Is It
What is VA loan entitlement?
VA entitlement is the dollar amount the VA will repay a mortgage lender if the qualified borrower defaults or fails to pay their mortgage, said Sam Atapour, the branch manager for Embrace Home Loans in Ashburn, Virginia.
Typically, the entitlement guaranteed by the VA to cover any losses equates to 25% of the total loan amount. Basic primary entitlement is $36,000, although Atapour said most lenders will permit a loan up to four times that amountâ$144,000. A VA bonus entitlement provides the ability to borrow more than this amount.
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Qualifying For A Second Home Loan
In order to qualify for a 2nd VA home loan, you and your home will need to meet the same requirements as for the first loan. Take a look at just a few:
- Certificate of Eligibility
- Many lenders require 620 credit score or higher but the VA simply lists suitable credit
- 41 percent DTI or lower
- Sufficient income
Can I Take Out Another Va Loan
Yes: VA loan benefits can be used again and again, provided that you meet the qualifications for reuse. Here is a closer look at 3 common scenarios may help some veterans get another VA loan.
Does one of these apply to you regarding your previous VA loan?
- Paid in full and house sold
- Assumed by another veteran
- Balance on mortgage and still own the home
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How To Get More Than 1 Va Loan
One common myth about VA loans is that you can only use your VA benefit once. The truth is that you can use your VA home loan guarantee as many times as you want. In fact, under a variety of special circumstances, you can even have 2 VA loans at the same time.
If you meet the eligibility requirements, you have a VA loan benefit available to use. Once you take out a VA loan and have the United States Department of Veterans Affairs guarantee the home loan, the benefit is occupied.
If you would like to use your VA benefit again for another loan, you must first restore the benefit.
In order to obtain a VA home loan benefit restoration of ones eligibility, a veteran or eligible borrower should contact the VA HLC or call the number above to expedite processing.
What Is Va Loan Assumption
One benefit for home buyers is that VA loans are assumable. When you assume a mortgage loan, you take over the current homeowners monthly payment.
That could be a big advantage if mortgage rates have risen since the original owner purchased the home. The buyer would be able to acquire a low-rate, affordable loan and it could make it easier for the seller to find a willing buyer in a tough market.
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How To Restore A Va Loan
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Whether you are moving to a new home or looking to purchase a second one, you may be wondering if you can use your full VA loan entitlement more than once. While the loan entitlement is limited, there are ways to restore it and extend your ability to buy without paying a down payment.
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Va Loans Are Assumable
Most VA loans are assumable, which means you can transfer your VA loan to a future home buyer if that person is also VA-eligible.
Assumable loans can be a huge benefit when you sell your home especially in a rising mortgage rate environment.
If your home loan has todays low rate and market rates rise in the future, the assumption features of your VA become even more valuable.