You used a VA mortgage once. But can you take advantage of this Department of Veterans loan program again? Can I get a second VA home loan?
Explain entitlement to VA mortgage
VA loan entitlement is the amount that VA will guarantee for a home loan. This helps determine how much you can borrow before you need a down payment. Eligibility protection encourages lenders to offer VA loans at lower rates, with no down payment and easier qualification guidelines.
The entitlement amount is usually USD 36,000 or 25 percent of the loan amount up to the applicable loan limit; currently, USD 510 400 is the limit in most areas of the country, but is higher in some markets.
Eligible borrowers in most parts of the country have primary entitlements of USD 36,000 and additional secondary entitlements of USD 91,600. That gives $ 127,600.
When buying a home with a VA loan, some or all of this entitlement is used in the mortgage. For example, a $ 200,000 loan uses $ 50,000 (25 percent) of the entitlement. Say you want to have two VA loans. The math is simple: USD 127,600 minus USD 50,000 of the allowance used for VA No. 1 loan is up to USD 77,600 of allowance that can be used for VA No. 2 loan.
Second scenario for the VA housing loan
There are several ways to use a VA loan more than once.
First, you can sell your current home with VA mortgage and buy another home with VA mortgage. Since your first home has been sold or is selling at the same time when you are buying a new home, your VA entitlements can be restored to buy house number two.
The second way is to refinance an existing VA loan with a new VA loan. This can be a good option if you want to lower your interest rate and monthly payment and / or use your equity. You can choose an improved VA refinancing (also known as an interest rate refinancing loan or IRRRL) or a VA refinancing loan.
VA loan not repaid? Many VA loans are possible
This does not happen often, but it is possible to have two VA loans at once.
At present, a borrower with full credit entitlements and full entitlements has sufficient support for a USD 424.100 loan in most counties in the US. With an average VA loan of around $ 210,000, most veterans have some right to stay after taking advantage of a home loan. Although VA requires the loan to be repaid in full and the house sold before entitlement is restored, there is a one-time exception to this rule.
In the case of transfer to the army, this exception may be useful. If you still have sufficient entitlements, you can use the remaining benefit of a VA home loan without selling your previous home or paying off the loan. Of course, you still have to qualify for income and credit.