The short answer is yes. Basically, once you’ve established eligibility, it’s sort of like establishing a credit limit. Your eligibility is for a specific maximum entitlement; some individuals may be able to purchase a home without using his or her full entitlement. In that situation, it is possible to put the remaining entitlement towards financing a second property. Additionally, it is possible to restore the full entitlement amount by meeting certain requirements and applying for restoration of entitlement with form 26-1880. The simple version of the restoration requirements are that the loan is either fully paid or transferred to an eligible veteran. There is a one-time-only option for restoration of entitlement if the original property secured with the paid-in-full-loan is still in the veteran’s possession. Once again, your loan officer will be able to handle all this for you.
Posts Tagged ‘va entitlement’
Reusing VA eligibility: Can I obtain another VA loan?
Tuesday, November 17th, 2009Will VA loans stand the test of time? VA loans and their ability to survive new regulations.
Wednesday, September 30th, 2009If you would have asked me a year ago if VA loans would see massive amounts of overhaul and guideline changes, I would have laughed at you and said “NO WAY”! You see I have been in the mortgage industry since 1997; I have been doing VA mortgage loans the entire time also. As the housing market heated up and everyone was jumping on the sub prime and/or option arm band wagon, I stood my ground and built my business around good old fashioned VA home loans. It was a regular occurrence in my office to have representatives from banks, mortgage lenders, and all types coming into our office to try to convince me and my loan officers to start “pitching” or “selling” these unique new and “profitable” loans. I never once swayed. A good friend of mine named Garret had stopped doing VA loans and began building a very successful mortgage operation around the option arm loan. We had many opportunities to change our model from VA loans to something else, and frankly I may have made a lot more money in the short term. I however, was not purely motivated by money like many that were doing loans at that time. Was an option arm or a sub prime loan good for the homeowner? Those loans kind of came out of nowhere and what would happen if they disappeared one day? When I looked at VA loans I realized they were cut and dry, black and white and had stood the test of time and it didn’t matter if you were talking about a Georgia VA loan, North Carolina VA loan, or any other kind of VA loan. I enjoyed serving American soldiers both active and retired and had confidence in knowing I was offering these people a solid loan that I could count on never going away or changing.
Lets now fast forward to 2009 and the soon to be 2010. Option arm loans are non existent, sub prime loans are shunned and gone. VA loans are more popular than ever and are being utilized like never before. Do you think my ideas and thoughts on VA loans have been unscathed or unchanged in light of the mortgage meltdown or real estate implosion? They have changed quite a bit! I still think the VA loan is the best loan by a long shot. If you are an eligible veteran, then you should always use your VA entitlement and get a home with the help of a VA loan. However, I sometimes feel at this point that the never changing, black and white, old fashioned VA loan will change and could essentially fall from grace if the big wig government law makers keep trying to get involved in mortgage regulations.
Here is a short list of POSITIVE attributes of the VA loan program as it was/is and a list of what possible changes may be coming/already have come
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Positive Attributes of the VA Loan Program |
Current Status |
Comments |
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100% no money down purchase option |
Still available |
FHA canceled the no money down option and some think VA may follow suit. Let’s hope not. |
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No minimum fico score required |
all major banks and lenders require a 620 score. VA does not take a stance but is allowing banks to add this requirement. |
We feel this is a HUGE slap in a veteran’s face. Suppose the VET got hurt in battle and has medical expenses that are hurting his/credit but all other accounts are to date and clean. In the past banks took that into account and now they don’t. |
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Streamline refinancing with no appraisal or employment verification. |
Most banks or lenders want an appraisal or other form of verification of property value. Wells Fargo is a big proponent of this dumb rule. |
You cannot name a single city in out country where the home has NOT lost value. Why allow a veteran to buy a home with no money down, then force them into a high rate during low rate periods, by telling them, “sorry your home is not worth what it used to be!” Give me a break. |
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1-2 30 day late payments are okay on your mortgage if you want to refinance. |
NON EXISTENT. |
Why are we seeing all this talk about bail out the home owner and make housing more affordable, yet America’s veterans can not get a break? In the past banks were ok with a late or two if the veteran was current at the time of refinance. |
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NO employment verification on VA streamline refinance. |
almost non existent, banks and lenders are all verifying employment. |
On a streamline as long as the veteran is making payments on time they should be allowed to refi to a lower rate. Un employment is at an all time high and we need to help those that are still making payments and trying to keep their houses. |
So veterans if you are reading this, please don’t be bummed out but please be alarmed. Your hard-earned VA benefits are being jeopardized by people in Washington and Big Banks that took bail out money. I will fight this fight along with many others to protect your hard-earned benefits and I will keep doing loans for Veterans as long as the market allows and tells us loan officers that Veterans deserve special treatment!
VA Loans vs. Conventional Loans – Which is better?
Friday, May 1st, 2009What should you choose? VA or Conventional?
At some point Veterans will come to a dilemma when deciding what type of loan to use when buying a home. This is a very valid question or concern as both have their place in the home buying process. Having worked with Veterans for the past 7 years I can shed some light on this subject. First let me start by saying that owning your own home is still one of the best financial decisions an individual can make if its done right. What I mean by that is simply don’t bite off more than you can chew. Once you sign on that dotted line you are now responsible for making payments for the next 15 to 30 yrs. BE SMART ABOUT IT. OK, lets analyze the VA loan and Conventional loan.
VA loans allow NO MONEY DOWN 100% financing
VA loans allow for a Veteran to borrow 100% of the purchase price. This now is one of the only loan programs that allow for 100% financing. Unlike Conventional loans, you don’t have to pay any mortgage insurance premium (MIP) on Veteran Home Loans. MIP is a separate insurance that covers the lender in case of loan default. The amount of MIP is paid on a monthly basis and is completely risk based and can be very expensive. The reason why a Veteran does not have to pay this is simple. The Department of Veteran Affairs is guaranteeing a portion of the loan to the lender. This is what is commonly known as your VA entitlement. For the Dept of Veteran Affairs to guarantee a VA loan to the lender there is a fee assessed by the VA. This is called a VA Funding Fee (VAFF). The amount of this fee is usually 2.15% of the loan amount and it CAN BE financed into the loan. This fee can be decreased if the Veteran puts money down and will also be waived is the Veteran is receiving 10% or more VA disability. In this day and age, who has $20,000 just laying around to put down on home. This is just my opinion, but if you have that much money saved its better left in an interest bearing account. Besides, all the interest on home loans is tax deductible so on that $20k you will will gain interest and be able to deduct more interest on your home.
Do I need to have great credit?
Credit Qualifications on VA loans are much different than conventional loans. With VA loans its based on timely payments within the last 12 months whereas Conventional loans are score driven. A Veteran who has a credit score of 620 can get them same rate as someone with an 800 credit score.
How much money do I have to make?
There is an additional step with VA loans. VA is not so concerned about Debt to Income (DTI) but rather Residual Income (RI). The Department of Veteran Affairs has established a calculation based on family size, loan size and location and takes into account net income (after taxes). Conventional calculates DTI on gross income (before taxes).
These are the main differences between VA loans and Conventional Loans. If a Veteran has served his country and helped the cause of Freedom and is given the ability to use a VA loan, there is no reason why he/she should not use it. I’ve done both VA and Conventional loans. VA LOANS provide lower monthly payments. This industry is changing so much. It isn’t what it used to be but the VA loan has remained constant. Good luck and happy house hunting.
