One major question from borrowers who have already purchased a home with a VA loan is if they are eligible for the benefit again. The answer is ‘Yes’. Veterans and active military families are eligible for a VA home loan for the second time around, if they meet certain criteria. Fortunately, a VA loan is a lifelong benefit for those who have served our country. The United States Department of Veterans Affairs helps service members, veterans, and eligible surviving spouses with a VA loan. It helps them become homeowners. Lenders such as banks and mortgage companies usually offer VA home loans. They come up with qualifying standards, terms of the mortgages, etc. Getting a VA loan for the second time requires looking into a borrower’s VA Loan entitlement.
Can I Get A VA Home Loan For The Second Time?
What is entitlement?
Entitlement can be defined as a specific amount the VA promises to repay to a lender if the borrower defaults on the loan. This is part of the VA Loan guarantee. The qualified borrowers normally use some or all of their entitlement. The VA typically offers a quarter of the loan amount, so borrowers will leverage a quarter of their entitlement when purchasing.
VA loan possibility for the second time
Even after using the entitlement, borrowers still can use their VA loan benefit again. The great thing about the VA home loan program is that eligible service members have the benefit for life. However, the entitlement is available once the loan is repaid in full. You need to sell your house to another VA home buyer to restore your entitlement. It is possible that you can have two VA loans at the same time. VA borrowers with no sufficient entitlement may still be eligible to get a VA loan by paying a down payment. Moreover, VA loans do not carry any type of mortgage insurance.
Home buyers opting for foreclosures will have no long-term impact on VA loan eligibility. They have to wait two years before they use a VA loan after a foreclosure.
Eligibility for a second VA loan
You can use a second VA loan to get a second home – but you should be eligible for entitlement and have to be financially eligible for another mortgage. Moreover, you should prove to the VA that your second home offers a net substantial benefits such as looking to reside closer to work, buying a larger home, downsizing after a change in finances, buying a second home for your spouse. At least one benefit needs to be met to be eligible for a second home. You will not be given access to full VA loan entitlement when you keep that first VA-backed mortgages. Restored eligibility is not available for those who surrendered a deed in lieu of foreclosure.
The VA loan entitlement calculations can be confusing; therefore you need to search for lenders and industry professionals who know how to work upon them.
VA home loans can be used for the purchase or construction of single-family homes. VA home loans need no down payment or private mortgage insurance (PMI) requirements, making them an excellent choice for you as a veteran.
VA mortgage lenders provide veterans with a wide range of home loans that cover a broad range of needs, including constructing a single family home, purchasing a single family home, and upgrading your primary residence. VA mortgage lenders can help you with the paperwork and documents involved in getting a restoration of entitlement.