September 12th, 2017 11:46 AM by Joan Rusco
Interesting scenario arose with a realtor friend of mine. His client is selling his VA mortgaged home and wants to be able to buy another one of the same day. Can it be done? The short answer: yes.
To renew VA loan eligibility you must pay off your existing loan before getting the new one. My realtor friend wisely chose the same title company to do both the closing on his home sale and home purchase. That way every part of the transaction is handled at one desk. Otherwise the client would have to wait for the title company closing the sale of his/her home to wire the funds to another title company closing on the purchase of the new home. This eliminates the possibility of the purchase being delayed because the bank wire time deadlines have passed between transactions.
Let’s revisit another very important aspect of using a VALoansMN mortgage. As we’ve outlined in previous posts a VA loan is assumable. This means if your home financed with a VA loan is sold to another veteran that veteran, after meeting lending qualifications, can assume the balance left on your mortgage. This can be very attractive to a home buyer when interest rates are rising. Especially true now given our VALoanMN rates are extremely low. If you’ve purchased your home in the last couple of years with rates in the 4% (or lower) range and you want to sell the home in another 5, 6 or 7 years you would still have a sizable principal balance on the loan. Where do you think mortgage rates will be in a few years? Will they be higher or lower?
Let’s dig a little deeper on this ‘lending qualifications’ issue we raised above. Any veteran buyer of a home has to meet certain qualifications. This typically means meeting credit, debt, income and other requirements to show a lender you’re a safe bet. In addition there are a handful of lenders and servicers who do not allow their loans to be assumed. Talk to us at VALoansMN about this during your loan application process. We’ll set the record straight for you.
One of the most frequently asked questions about have a VA loan has to do with the ability to sell the home. There are no restrictions on selling your VA mortgaged home. A veteran or active duty person can sell their home to any potential buyer and can accept any kind of financing.
Yes, there are stricter guidelines on VA loans but those are in place to protect veterans. We harp on the benefits because we truly believe our loan program is the best program available. Call us at VA Loans MN so we can tell you our story.