How Many Va Loans Can I Have At Once
Another common question we here is how many VA loans can I have at once? Is it possible to have multiple VA loans at one time? The answer is yes in the right situation. For example it is very common when an active duty service member has to move to a new service station or base. They often might have a tough time selling the old home and decide to use it as a rental property. Now that being said there are few things to keep in mind. In order to keep the current home and purchase a new home with no down payment you must have enough in your VA entitlement. It is also important to remember that anytime you purchase a new home with a VA loan that property must be the primary residence. So in the example above this is a situation where the Veteran could possibly keep the older home for an investment property and purchase a new home using his or her VA loan benefits. If you are considering or have questions about purchasing a second home with your VA loan benefits call 855 -956 -4040 to speak with a VA mortgage professional.
Title Report/title Insurance Policy
Title fees can vary a lot. Theyre based on a variety of factors including geographic location, the purchase price of the home, and the loan amount. In other words, title fees for a less expensive property will be less than those for a high purchase price.
The title report ensures that no one else can claim ownership of the property. The title report and title insurance protects you and the lender in case theres an instance in the future where someone attempts to claim ownership rights to the house.
How Many Times Can I Use The Va Loan Benefit
25 million active duty service members and veterans are eligible to qualify for the VA loan program. These brave men and women often ask, How many times can I use the VA loan benefit?
The answer is in theory, as many times as they want. As long as the military member has paid off the original VA loan and sold the property purchased by it, they may reuse the loan. Entitlement allotment is infinite as long as all borrower loan payments are current. Of course, all program eligibility requirements must be met in order to qualify for subsequent loans. Aside from the military service requirement, qualifying is based on lender/investor underwriting guidelines such as income, , DTI and LTV, etc.
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A Va Loan Is Reusable
Once you completely pay off a VA loan, you regain your full VA eligibility and can reuse it for another VA loan.
You can reuse a VA loan as many times as you want, as long as the previous loan is paid off.
And like I mentioned before, you can also have two VA loans at a time, if you have enough entitlement available.
What Is A Va Loan Entitlement
Every Veteran and active service member who meets the VA’s service requirements has something called a VA loan entitlement.
Entitlement can be a bit confusing, even for those working in the mortgage industry, but the most common definition is that its a specific amount the Department of Veterans Affairs will repay a mortgage lender if the borrower fails to make their payments . This protection is called the VA loan guaranty.
Eligible Veterans in most parts of the country enjoy the following:
- Primary entitlement: $36,000
- Secondary entitlement: $68,250, available when buying a home for more than $144,000.
In more expensive housing markets, there are usually higher entitlement amounts.
Let VAMortgageCenter connect you with a home loan specialist to guide you through your entitlement questions and calculate your remaining entitlement.
When a qualified borrower purchases a home through the VA loan program, they use some or all of their entitlement. The VA typically guarantees a quarter of the loan amount, so borrowers usually utilize a quarter of their entitlement when purchasing.
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Why A Va Loan
The primary benefit of a VA-guaranteed loan is that it allows an eligible serviceman to purchase a house with no money down. Although interest rates are set by the private lenders that issue the loans, the guarantee encourages lenders to keep rates low and terms favorable. The VA appraisal performed on each home purchased with a VA loan helps to ensure that the home is safe and habitable. Today, more than 25 million veterans and active-duty personnel are eligible for VA-backed home loans.
Va Loan Are Government
Like I mentioned before, the VA guarantees a portion of the loan will be paid back to the lender, in case the homeowner defaults. Government backing gives lenders the confidence to extend financing with great rates and terms.While the VA insures the loan, the government itself does not lend money for the loan, which Ive learned is a common misconception. You actually get financing from a private mortgage lender, like Atlantic Bay, just like you would with a conventional loan.
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Va Loan Eligibility Requirements:
Contrary to popular belief, VA loans are available not only to veterans, but also other classes of military personnel. The list of eligible VA borrowers includes active-duty service persons, members of the National Guard, Reservists, surviving spouses of veterans, cadets at the U.S. Military, Air Force or Coast Guard Academy, midshipmen at the U.S. Naval Academy, and officers at the National Oceanic & Atmospheric Administration. A minimum term of service is typically required.
Both active duty and retired military are eligible for a VA loan after a set period of time, based on their service period. For example, Gulf War vets are required to serve at least 90 days of active duty or to fully complete the term they were ordered to active duty for without a dishonorable discharge. That group includes vets that were in service from August 2, 1990 until the present.
The loans are available to military personnel that are currently serving, those who have been discharged, and those who have retired. Your eligibility for a VA loan is determined by the length of service and character of your service. In general, the following criteria qualifies you for a VA loan:
In addition, there are these requirements:
The home must be your primary residence
You must have a valid certificate of eligibility from the VA
Although the VA has no minimum credit score requirement, most lenders do
Whos The Ideal Borrower For The Va Loan
There are only two kinds of borrowers who can get a VA loan: active duty military and retired military. However, there’s on exception — surviving spouses can also use the benefit if it hasnt been used yet and they never remarried. So, the ideal borrower for a VA loan:
Has dedicated a significant portion of their life to the United States military.
Wants to buy a home and put much of their payment toward principal.
Does not necessarily have much saved for a downpayment.
Intends to stay put for a while, since the VA loan rate is pretty amazing.
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How To Reuse Your Va Loan Benefit
VA loans are a lifetime benefit that you can use to upgrade your home as your family and need for space grow. After you sell or pay off your current home, you can have your full entitlement restored and use it to buy a bigger house. If youd prefer to buy a second home before selling your first home, you may be able to use your remaining entitlement to do so. Heres a more detailed look at your options.
What Va Loans Can Be Used For
VA home loans can be used to buy, build, improve, or refinance a home intended to be the borrowers home address, or as the VA Lenders Handbook says, the primary residence. Primary residence requires the owner to live in their homes. Primary residences cannot be a timeshare, vacation home, bed-and-breakfast, etc.
VA Loans can be used to buy properties with as many as four living units. The borrower is also permitted to consider the purchase of a mixed-use or mixed-zoning property as long as the non-residential use of the home does not compromise the residential nature of the property.
If you purchase one-to-four unit real estate with the help of a realtor, broker, or real estate agent, regardless of your intent for the unused living units in your new home, you MUST occupy the property as a condition of loan approval.
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Using A Va Loan After Default
Any entitlement tied up in a mortgage that you foreclose or otherwise default on will be lost, but that doesn’t always mean you can’t reuse your VA loan.
Imagine you buy a $200,000 home, using $50,000 of your entitlement. If you default on the mortgage, that $50,000 can’t be restored. But you’d still have $77,600 in second-tier entitlement left over.
Assuming that you meet lenders’ credit and waiting period requirements, you could use your second-tier entitlement to get a second VA home loan.
Q: How Can I Obtain Proof Of Military Service
A: Standard Form 180, Request Pertaining to Military Records, is used to apply for proof of military service regardless of whether you served on regular active duty or in the selected reserves. This request form is NOT processed by VA. Rather, Standard Form 180 is completed and mailed to the appropriate custodian of military service records. Instructions are provided on the reverse of the form to assist in determining the correct forwarding address.
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Renting Your Va Loan Home After Purchase: When Its Legal To Do So
It is perfectly legal under the terms of your VA home loan for you to purchase a multi-unit home, as long as you move into one of the units when you rent out the other units
It is also legal to purchase a home, move in, and allow others to live with you rent-free if you choose.
You are also free to allow your VA home loan to be assumed by another person if you want to pass financial responsibility for the loan off to another.
Your lender must participate in a VA loan assumption so you will need to have a discussion with your loan officer about how such transactions work.
Va Entitlement For A Second Va Home Loan
The VA loan program entitles qualified military homebuyers to a 25% guaranteeessentially backing the $0 down loan to reduce the risk for VA lenders. This guarantee means that even in the event of a default, lenders will retain 25% of the original loan amount.
The funds provided for this guarantee are called entitlement. The basic VA loan entitlement is $36,000 and a second tier of entitlement is also available, generally set at $91,600. For most VA homebuyers, that means a total of $127,600 is available to cover the 25% guarantee. Buyers in high-cost counties will see higher limits.
Let’s take a look at how VA entitlement comes into play when you’re hoping to get a second VA home loan.
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Q: Is The Surviving Spouse Of A Deceased Veteran Eligible For The Home Loan Benefit
A: The unmarried surviving spouse of a veteran who died on active duty or as the result of a service-connected disability is eligible for the home loan benefit. If you wish to make application for the home loan benefit as a surviving spouse, contact our Atlanta Eligibility Center. In addition, a surviving spouse who obtained a VA home loan with the veteran prior to his or her death , may obtain a VA guaranteed interest rate reduction refinance loan. For more information, contact our Atlanta Eligibility Center.
Simple Va Loan Eligibility Explainer
The first step in getting another VA mortgage loan is learning about VA loan eligibility.
Eligible borrowers receive a VA loan entitlement, which allows the veteran to purchase a home up to any price with zero down.
Because of various guidelines, if your home prices is less than $144,000, a portion of your entitlement will be left over. This sometimes makes it possible to keep and rent out your current home and purchase another one. Active military personnel often do this after buying a house in one location and receiving PCS orders for another area.
You can also use the remaining entitlement to buy income-generating property of up to four units, as long as you occupy one of them.
Buying a second home or vacation home with remaining entitlement is not permitted. You or your spouse must certify that you will occupy the property as your primary home.
Now heres where it gets interesting.
If you use all of your entitlement to purchase a property, you dont automatically get a second entitlement. But, the moment you sell the property or pay off the mortgage, you can apply to have the full entitlement restored.
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Does The Va Funding Fee Increase With Subsequent Use
The first time you use your VA entitlement, youll typically pay a one-time funding fee of 2.3% of the value of your loan, assuming you have a zero or very small down payment. So if you borrow $100,000, you have to pay $2,300 on closing. Alternatively, you can often add your funding fee to your loan amount and pay it down over the lifetime of your mortgage.
Though that might seem like a lot of money, its substantially less than what you would likely pay in private mortgage insurance for other low-down-payment loan types.
Some service members are exempt from the funding fee, including veterans with certain service-related disabilities and surviving spouses.
There Are No Closing Costs On A Va Home Loan
There are closing costs on VA Home Loans just like any other type of residential loan, but there are fees that cannot be charged to the borrower that may differ from other products. It is also common in most states to offer higher interest rates that yield lender credits back for the borrowers closing costs.
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Can I Have Two Va Loans At The Same Time
It’s possible to have more than one VA loan at the same time. To do this, you would need to use your remaining entitlement for the second loan also called second-tier entitlement.
This approach is often used by:
- Service members experiencing a permanent change of station. They may choose to retain their primary residence, often to be rented out. The VA borrower may have enough remaining entitlement to purchase a new home without a down payment at the new duty station.
- Former VA borrowers who lost their homes to foreclosure. Using their second-tier entitlement can allow them to buy a new home and start anew.
Your Certificate of Eligibility will detail how much of your entitlement remains. This is the amount youd be eligible to have guaranteed by the VA on your second loan.
If theres not enough to cover the loan youre looking for, you may be able to qualify by making a down payment . VA loans also do not require mortgage insurance, another way youll save over other loan options.
What Is My Entitlement
Your Entitlement is the amount of money the VA is willing to guarantee on your behalf to a private mortgage lender. The VA offers a basic entitlement of $36,000 to each Veteran. A lender is usually willing to loan you up to four times that amount or $144,000. If something happens and you are unable to pay back the loan, the VA will pay 25% of your loan to the lender as a guarantee. However, in many places across the country, its difficult to find a suitable home for $144,000. To ease this problem, the VA decided to link the amount it guarantees to the conforming loan limit for conventional financing as stated by the Federal Housing Agency . Doing that increased the amount available to veterans looking to buy a home. In most counties across the country, the VA will back 25% of your home loan, up to a maximum loan amount of $484,350 . In other words, if you finance a $250,000 home in a county with a limit of $484,350, you are only using a little over 50% of your entitlement.
The VA loan entitlement is yours for the duration of your life. It never expires, and you can use all of it or just some of it. You can even borrow more than the loan limit of $484,350, but most lenders will require some sort of down payment since the VA only backs 25% of the loan limit. Being able to use your benefit over and over is based on how much of your entitlement is available to you, and the reasons behind your wanting to use it again.
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Will A Short Sale Ruin My Credit
No. A short sale will show as a settlement paid rating on your credit report. However, this paid mark may show late payments, and may indicate the balance was not paid in full. This alone will cause a decrease of your credit score. However, if you make your other monthly debt payments on time, it will not lower your score as much.
Va Loan Entitlement Restoration
You can use your VA loan benefit more than once. Much more than once, in fact.
Veterans and active duty personnel, as well as members of the Selected Reserves are eligible for another loan, at the same low VA loan rates enjoyed by first-time home buyers.
The following guidelines apply depending on whether you are keeping or selling your current home.
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