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Some vets buy their first home with a VA mortgage only to outgrow it in a few years

Some vets buy their first home with a VA mortgage only to outgrow it in a few years

Those who are expanding their families may decide it’s time to move into a larger property and start exploring the market again. Fortunately, the VA mortgage program provides a lot of flexibility around reusing the benefit to get a second VA loan.

Can I Get a Second VA Loan?

Military homebuyers who want to take out a new VA loan have options. It’s possible to restore some or all of your VA loan entitlement, and in some cases, it’s even possible to take a second VA loan without selling your home.

VA Entitlement for a Second VA Home Loan

The VA loan program entitles qualified military homebuyers to a 25% guarantee—essentially backing the $0 down loan to reduce risk for VA lenders. This guarantee means that even in the event of a default, lenders will retain 25% of the original loan amount.

The funds provided for this guarantee are called entitlement. The basic VA loan entitlement is $36,000 and a second tier of entitlement is also available, generally set at $91,600. For most VA homebuyers, that means a total of $127,600 is available to cover the 25% guarantee. Buyers in high-cost counties will see higher limits.

Let’s take a look at how VA entitlement comes into play when you’re hoping to get a second VA home loan.

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Selling Your Home and Buying Another

Selling your home and buying another is the most common (and straightforward) way to reuse your VA home loan benefit. Let’s say you buy a $200,000 home, and the VA guarantees 25% of the loan amount, or $50,000. When you sell your home, that $50,000 is freed up, and your full $127,600 entitlement becomes available.