With a view to help the veterans in purchasing homes and refinancing their mortgages, if any, VA loan program was launched in the U.S. Ever since the VA loan program was introduced, the Department of Veterans Affairs has helped millions of its members buy homes. Veterans Affairs does not offer the loans directly. VA backs the loans provided by private lenders to veterans. By far, VA loan is considered the best loan as there is no down payment involved and neither is there any mortgage insurance. If you have been wondering whether it is possible to obtain VA loans for two homes, the answer is a sad ‘no’.
How Do You Qualify For A VA Loan?
If you are looking to apply for VA loan, you need to comply with the following requirements to be eligible for VA loan. You need to be in the age criteria to apply for the loan. Possessing a Social Security number and being a legal resident are essential. Your financial status to prove your ability to repay needs to be provided. Hence, you need to provide your income statement for a minimum of two years. Department of Veteran Affairs does not insist on credit scores to enable loan sanction. However, some lenders do expect the borrower to have a comfortable credit score, generally over 620, before they could be sanctioned home loan. Lenders who accept lesser credit score charge higher rate of interest.
Do You Qualify Twice?
The question of going in for two VA personal loans arises in the minds of those who feel or have a need for a second home. The obvious reason for seeking a second home is to ensure comfortable stay if one prefers a particular place to stay during vacation. Yet another reason could be the job, which requires shifting from the present residence. In this case, the owner may want to still possess the home while buying a new one in the place where he is about to relocate. While the reasons may be genuine, the rules do not favor granting loan for a second VA home while a person already owns one.
Why Two VA Loans Is Not Possible?
VA loan entitlement is one of the factors that is in the way of sanctioning loan. The term entitlement refers to the amount available to the borrower. In other words, VA entitlement is the amount guaranteed by the VA to the lender in case of default by the borrower. Certificate of Eligibility states the specific entitlement of the borrower. To reuse VA entitlement, the borrower has to pay off his or her VA loan completely. With a VA loan in use, the VA loan entitlement may not be sufficient to guarantee yet another home loan. Another factor that prevents such sanctioning of VA loan is the rule regarding occupancy. When one opts for VA loan, the rule states clearly that the purchased property should be occupied by the borrower. The borrower has to sign a document, which states that the house purchased using VA loan is intended to be the primary residence of the borrower. Hence, the possibility of obtaining VA loans for two homes is ruled out.