To Buy or Not to Buy...That is the question.

Friend and mortgage banker Eddie Kirby of Guaranty Mortgage Services shares with us his expertise on home buying for military families.

Change is a way of life for Military families. Moving from city to city on short notice. Wondering whether or not to use their VA Entitlement and actually purchase a home instead of renting or living on base. Worried that if they do buy they'll be stuck with the house and unable to purchase another one until it sells. Well, there's good news for VA families. 

While most active and inactive Military realize they can purchase one home with 100% VA financing; many do not realize they can purchase an additional home with 100% VA financing using their additional entitlement. For example, if the VA loan limit is $424,100 for a specific area. And the Veteran has already used their Basic Entitlement to purchase a $219,622 home. A Certificate of Eligibility is received back that states the Basic Entitlement is now $0* and the Entitlement charged is $54,905. But in small print in the middle of the Certificate of Eligibility it reads, "Additional Entitlement is available on most loans in excess of $144,000. In such cases the Entitlement amount is 25% of the loan limit for the county where the property is located". So to calculate the maximum amount the Veteran can receive 100% financing for you use the following calculation: $424,100/4 = $106,025. $106,025 - $36,000 (the current Entitlement used) = $70,025 x 4 = $280,100 maximum loan amount including any VA Funding Fees. So in this example the Veteran may qualify for up to $280,000 for the purchase of a new home. Now it's important to remember that the Veteran must still be qualified for the new loan in regards to credit; ratios; and housing allowances. And they must occupy the new property as their primary residence. (Perhaps they are going to rent the home that currently has the VA mortgage attached to it). And they must buy a minimum $144,000 home. But it is possible to get 100% VA mortgage financing for a new home while still having a VA loan on another property the Veteran owns. Something a whole lot of the Military (and even a lot of Lenders) are unaware of.

Mortgage loan for Military Families
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