Marcie Geffner: Yes, you can get another VA home loan

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The VA mortgage is so attractive that it’s no wonder some borrowers want to take advantage of the Department of Veterans Affairs program more than once.

There are three ways a service member, veteran or other qualified borrower can get another helping:

– Buy a home with a VA loan, sell it and then buy another home with a new VA loan.

– Refinance from one VA loan into another.

– Have two or more VA loans for different homes at the same time.

The VA home loan “isn’t a single-use proposition,” says Michael Dill, vice president of mortgage lending at Guaranteed Rate in Tampa, Fla.

But before you start shopping for your next VA loan, hold on – a lot depends on something called your “entitlement.”

HOW ENTITLEMENT WORKS

The VA guarantees to reimburse up to 25 percent of the lender’s loss if a borrower defaults. This protection encourages lenders to offer VA loans with lower rates, no down payment and easier guidelines to qualify.

Typically, if you use a VA loan to buy a home for $200,000, the VA will guarantee a quarter of that, or $50,000.

Your entitlement is the total dollar amount that the VA is willing to guarantee and pay out on your behalf. In most parts of the country, entitlements top out at $106,025, but the limit can be higher in expensive areas such as New York, Los Angeles and Washington, D.C.

The $200,000 home in our example would reduce your $106,025 entitlement by $50,000. So, you’d still have plenty left for another VA loan to buy another home.

“A lot of military guys are stationed somewhere, they buy a property with a VA loan, then they get relocated and need to buy another one,” Dill says. “They can still buy and have multiple VA loans at the same time.”


Read more: http://www.newsobserver.com/news/business/article163962257.html

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