What Happens When Someone Dies With A Va Loan
Loan Possession Goes to the Beneficiary The possession of the loan shifts to their beneficiary, which is sometimes clearly mentioned in the Veteran’s will. If no one is mentioned in the will, it automatically passes to their spouse or estate. The beneficiary has to continue to make payments on the VA home loan…. view details
Va Loan Bankruptcy Waiting Periods
The waiting period can vary depending on a host of factors, but a big one is the type of bankruptcy you experienced.
With a Chapter 7 bankruptcy, lenders typically wait two years after the date of discharge. As for Chapter 13 bankruptcy, you may be eligible for a VA loan just 12 months removed from the filing date.
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Can I Get A Coe In Any Other Situations
You may be able to get a COE if you meet at least one of the requirements listed below.
At least one of these must be true. You:
- Are a U.S. citizen who served in the Armed Forces of a government allied with the United States in World War II, or
- Served as a member in certain organizations, like a:
- Public Health Service officer
- Cadet at the United States Military, Air Force, or Coast Guard Academy
- Midshipman at the United States Naval Academy
- Officer of the National Oceanic & Atmospheric Administration
- Merchant seaman during World War II
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How To Use The Va Loan After A Foreclosure
Due to unfortunate circumstances, veterans often ask how they can use the VA loan after a foreclosure. In other words, when a home financed with a VA loan is foreclosed upon, can veterans still use their VA loan benefits? They can, but certain restrictions exist. In this article, well explain how veterans can use their VA loan after a foreclosure.
Specifically, well cover the following topics:
- VA Loan Overview
- How to Use the VA Loan After a Foreclosure
- Final Thoughts
The VA Home Loan offers $0 Down with no PMI. Find out if youre eligible for this powerful home buying benefit. Prequalify today!
Does Va Loan Eligibility Expire
VA Loan eligibility does not expire. Once you are eligible for a VA Loan, you will remain eligible if you continue to meet the program’s requirements. For example, you must maintain a good credit history and keep your debt-to-income ratio below certain levels. If you do this, you will be able to take advantage of the many benefits of the VA Loan program throughout your life.
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Checking Your Va Eligibility
If youre retired, you dont have to use a VA loan to buy a home. There are plenty of products available, some of which are easier to qualify for.
Veterans may want to stick with VA products, though. On top of not requiring a downpayment, VA loans have lower mortgage rates and credit score requirements. This means more flexibility for home buyers something thats important when money is a factor.
Most veterans are going to be eligible for the VA loan, but it depends on how long and when they served in the armed forces.
If youre curious about your eligibility, you can learn more here.
Am I Eligible For A Va
You may be eligible for this type of loan if you meet all of the requirements listed below.
All of these must be true. You:
- Qualify for a VA-backed home loan Certificate of Eligibility, and
- Meet VAsand your lendersstandards for credit, income, and any other requirements, and
- Will live in the home youre refinancing with the loan
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How To Prepare For The Va Coe Application
The VA has a comprehensive COE application page that will list out exactly which documents you will need to have present depending on your status within the military. If you are a veteran or surviving spouse, youll need a copy of you or your veteran spouses discharge or separation papers . If you are currently serving on active duty, you will need a statement of service signed by your commander or a personnel officer.
Benefits Of Va Renovation Loans
So how do these VA loans help you? The high-level answer is that with a VA renovation loan , you are able to borrow not only the price of the home but also extra money for any improvements, repairs or alterations needed to improve the house and make it livable. And the best part? Its still only a single mortgage, so you only have to deal with one VA loan payment. It incorporates the improvements right into the value of the home. Work is then able to start after you close on the loan. This is a fantastic option if you want to use your VA earned benefit to purchase or refinance a home that needs a little TLC.
Its important to note that renovation loans are not used to remodel your entire home or to make major renovations. The purpose of this benefit is to ensure your new home meets the standard for VA financing. You can find these standards listed in detail as part of VA Pamphlet 26-7, Chapter 12. In short, the house must meet all current building codes, Federal regulations and HUD requirements. So, it can not be used to put in a swimming pools, an outdoor Jacuzzi, or even something major such as a septic system. But you can repair that leaky roof, replace worn floors, fix a cracked foundation or install energy-efficient upgrades.
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Can I Get A Second Va Home Loan
Yes, it is possible to get a second VA home loan.
When pursuing a second VA home loan, youll need to have enough entitlement leftover from your first-time use. Or restore your entitlement through one a number of ways. A few options include selling the initial property or proving a net tangible benefit.
If Youre On The Caivrs List
To qualify for a VA loan, you must prove you have made good on previous government-backed debts and that you have paid taxes.
The Credit Alert Verification Reporting System, or CAIVRS, is a database of consumers who have defaulted on government obligations. These individuals are not eligible for the VA home loan program.
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Pay Off The Loan And Sell The Property
The first option, selling the property and paying off the loan in full, is relatively straightforward. After you sell your first property and pay off your initial loan, you will have to let the VA know so they can update your Certificate of Eligibility . You can do this by filling out VA form 26-1880.
Ensure to keep all the paperwork surrounding the sale and closing of the property, in case the VA requests documentation. Once your application is approved, you will be able to apply for another VA loan with your full entitlement.
Divorce Can Complicate Occupancy And Entitlement On Existing Va Loans
Divorce is possibly the most complex issue when it comes to civilian spouses and VA loans. If youre an ex-spouse of a service member, youre not eligible for a new VA loan in the same way a surviving spouse would be. Thats pretty straightforward.
It can get complicated when divorce is involved after you have a VA loan together. One way in which VA loans are different from other types of home loans is that the VA has very strict occupancy requirements on who can and cannot live in a home purchased using a VA loan.
However, if the civilian spouse is a cosigner, theyre eligible to remain in the home without the service member living there. The issue arises when it comes to entitlement with a VA loan. The service member cannot restore their entitlement unless their ex-spouse refinances and/or pays off the VA loan in full.
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Information For Va Home Loan Borrowers During Covid
Below are some frequently asked questions for Veterans regarding the VA home loan policies related to the COVID-19 emergency:
The number one priority for anyone financially affected by COVID-19 is to ensure the health and safety of you and your family. Next, . Your mortgage company offers free, expert assistance. While you might be worried about letting your mortgage company know about your financial hardships, your mortgage company is there to help you, and it is to your advantage not to wait, but to call them as soon as possible.
If youre nervous about contacting your servicer, or if youd like our help and advice, please contact a VA loan technician at or . When contacting a VA loan technician at , please provide the name and address on the loan.
2. What protections do I have for my VA loan while the COVID-19 pandemic continues?
There are multiple protections on your VA-guaranteed loan if you are experiencing financial hardship due to the COVID-19 emergency. The hardship can be direct or indirect. For example, you may be directly affected because you have lost your job, or you may be indirectly affected because of childcare situations that have decreased your monthly income or increased your costs.
The moratorium on evictions ended on .
The Bottom Line: Va Renovation Loans Can Be A Useful Option But Are Often Difficult To Obtain
VA loans come with many great benefits, and a VA renovation loan can be extremely useful to vets or current servicemembers looking to make repairs on their current or future home. However, it can be tricky to find a lender that offers them.
Fortunately, if youre considering buying a home that needs renovating, there are a variety of options available to you. The important thing is to search around and find the loan that best suits your needs.
Get approved to refinance.
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Can I Buy A Second Home With A Va Loan
You can use a second VA loan to get a second home but there are stipulations you must follow. As with the second VA loan, you have to have entitlement available, and youll have to be financially eligible for another mortgage.
On top of those requirements, you need to prove to the VA your second home provides a net tangible benefit. Essentially, this means that the loan must be in the financial interest of the veteran.
Net tangible benefits include:
- Tapping into a shorter loan term
- Locking in a lower interest rate or monthly payment
- Refinancing from an ARM to a fixed-rate mortgage
At least one net tangible benefit needs to be met to be eligible for a second home.
There are plenty of ways homeowners can get a second VA loan. Once loans are paid off and entitlement is restored, theres nothing to stop VA home buyers from using the mortgage program over and over.
Can You Use A Va Loan For Rental Property
You can legally purchase a multi-unit home with a VA loan as long as you move into one of the units when you rent out the others .
You can also legally purchase a home, move in and allow others to live with you rent-free if you choose.
If you want to pass off your financial responsibility for the property to someone else, they can assume your VA loan.
But, if you want to do this, your lender must participate in a VA loan assumption, so talk with your loan officer about how such transactions would work.
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How Many Homes Can I Buy With A Va Loan
The Bottom Line: Yes, You Can Buy Two Homes With A VA Loan As such, buying a home with a VA loan for the purpose of making it a second home or investment property is allowed, but you can convert the property after you’ve lived there. You can also make rental income by living in one unit and renting out the others…. see details
It Can Be Easier For Veterans To Buy A Home After Bankruptcy Or Foreclosure
Veterans and active duty military personnel can still be eligible for a VA loan after a bankruptcy. In fact, it may be easier for military families who’ve experienced bankruptcy to qualify for a VA loan compared to other types of home loans.
The kind of bankruptcy you’ve filed affects your eligibility, and the mortgage application process requires additional steps. Here’s what you need to know.
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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.
Why Might I Want To Get A Va
A VA-backed cash-out refinance loan may help you to:
- Take cash out of your home equity to pay off debt, pay for school, make home improvements, or take care of other needs, or
- Refinance a non-VA loan into a VA-backed loan
On a no-down-payment loan, you can borrow up to the Fannie Mae/Freddie Mac conforming loan limit in most areasand more in some high-cost counties. You can borrow more than this amount if you want to make a down payment. Learn more about VA home loan limits
Youll want to keep closing costs in mind when refinancing a loan, as they can add up to thousands of dollars. Make sure you understand how your new loan amount relates to the value of your home. While your lender can advise you on the costs and benefits of the transaction, youll want to be sure you understand what youre getting into.
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What Is A Va Loan Entitlement
A VA loan entitlement indicates the amount that the Department of Veterans Affairs is willing to guarantee on each home loan. With a VA entitlement, the veteran can work with the VA lender to determine how much they will be able to borrow without a down payment.
Essentially, this entitlement is a promise to a lender that the VA will cover any losses for up to 25% of the loan amount.
Depending on your circumstances, you may receive a full or reduced entitlement.
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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Is Another Va Loan Possible If I Have Had A Va Loan Assumed From Me
VA loan rules permit an otherwise eligible VA borrower to apply for a new VA mortgage loan in the wake of a prior VA loan assumption under certain conditions.
If a loan is transferred to another qualified VA loan beneficiary, their entitlement takes over provided a Substitution of Entitlement is obtained. The Substitution of Entitlement, also referred as Statement of Veteran Assuming GI Loan, is a form that the qualified veteran buyer signs permitting substitution of entitlement for that of the veteran-seller. Without this certification the entitlement utilized to purchase the home will remain tied up there until the loan is fully repaid.
A Substitution of Entitlement is normally possible after the borrower who had the original VA loan assumed can present a Release Of Liability form from the original VA loan.
Its very important to point out that when having a VA loan assumed, if you even think you may need to use your VA loan benefits in the future, at the time of transfer of ownership the original borrower should also submit a request to the VA to have VA loan entitlement restored for a new VA mortgage. Ask your lender how this procedure works if you arent sure.
Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News
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Can You Use A Va Loan To Flip A House
Requirement: VA loans must be used to acquire your primary residence. As a veteran you can use a VA loan to acquire a property that you intend to flip if you use it as your primary residence during the renovations. That property can then be either flipped for profit or kept as a rental property…. view details
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Using And Reusing The Va Entitlement
When you bought your home using a VA loan for the first time, you may have used a portion or all of your VA entitlement. As noted above, a VA entitlement is not a one-time benefit and can be used over and over in these circumstances.
Scenario 1
You want to move out of your home with the VA loan and buy another one using a VA loan. You can sell the home and pay the existing VA loan in full. That way you can have your used entitlement back to be reused on a new home.
Scenario 2
You want to buy a new home using a VA loan but want to keep your current home with the VA loan. On a one-time basis, your entitlement will be restored if you repaid the existing VA loan and remain the owner of the house.
Scenario 3
You sold your home with the VA loan assumed by the buyer. Your entitlement may be reused if: the buyer/new owner is a qualified veteran who agrees to swap his/her entitlement with you or this new buyer paid off the VA loan.
Scenario 4
Your work at the military required a permanent change of service. You plan to buy a new home with a VA and want to turn your old home with an existing VA loan into an investment property. You can use whatevers left of your VA entitlement to buy a new home at your new location.
Scenario 5
Your remaining entitlement can also be used to purchase another property after foreclosure or bankruptcy, subject to the applicable waiting periods.
Do You Know if You Qualify?
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