A mil-to-mil couple is a couple where both spouses are members of the armed forces. Most anybody who’s served in the armed forces is familiar with this phrase, but may not be familiar with some of the advantages that a mil-to-mil couple has. You can basically guess the advantages when you consider all of the benefits veterans are entitled to and then multiply them all by two, but there are some things that you may not guess. One of these things is the advantage of being a mil-to-mil couple when applying for a VA loan. Whether you’re in a mil-to-mil couple, already married but not mil-to-mil, or still single, knowing the differences can be enlightening. When both spouses in a couple are in the military, there opens up a lot of different possibilities for them in the realm of VA loans.
One of the options that a mil-to-mil couple has in consideration to a VA loan is to have one spouse use all of his or her VA loan entitlement on the mortgage, and the other not use any of it. This can be really smart, because then if they end up defaulting on the mortgage, they still have the other spouse’s VA loan entitlement to use on another home. In the event of a divorce, this can be a good way for the spouse that needs to find another home to still have their VA entitlement to use to help them. The spouse not using their entitlement can still be financially obligated on the loan if they co-sign on the mortgage. While this is a common and very advantageous way to utilize the dual VA loan benefits a mil-to-mil couple has, it is certainly not the only option available to them.
Another option that the couple has is to combine their two entitlement amounts onto a single loan. In this way, the couple can double the guarantee to get a more expensive home – or perhaps even negotiate a better interest rate. When a couple does this, the financial obligation for the mortgage is divided in half between the two spouses, and each of the spouse’s entitlement amounts would be equally drawn from in order to cover the amount of the loan. This is most advantageous when the couple is not expecting to move or purchase another home again in the foreseeable future. In this way, they can purchase a home that their family can grow in and that they can eventually retire in. If the couple is expecting to move again, even if it’s ten years from the date of closing the first loan, they may want to consider the first option and compare how much they’ll save in the long run with each option. When doing this, it’s best to consult with a VA-approved lender, who is very familiar with amortization schedules and will be very willing to help you decide what the best option for you will be.
A possibility for many mil-to-mil couples is to use the remaining entitlement for one spouse and all of the entitlement for the other spouse. This option can present itself after the first option has been used and something happened that caused the first spouse to require the VA to pay money on his or her behalf. It’s very possible that not all of that spouse’s entitlement was used up, and so they can combine however much they have left with all of the other spouse’s entitlement, and still have a more advantageous loan than either would have on their own. A situation where this option is possible can also come if one of the spouses had a loan that used up some of their entitlement before they got married. Having a mil-to-mil spouse can help a VA-eligible servicemember still enjoy VA loan benefits after a run of bad luck.
It’s important to remember that the occupancy requirements set by the VA are pretty set in stone, and apply to whoever is using their VA loan benefits to guarantee the loan. Per the VA Lender’s Guide: “”Any person who uses entitlement on a joint loan must certify intent to personally occupy the property as his or her home. Any borrower on a joint loan who does not use entitlement for the loan (such as a nonveteran), does not have to intend to occupy the property.” In other words, anyone who purchases a home using a VA guaranteed loan must be intending to occupy the home as their primary residence.