2nd tier va loan help

Asked by Jv5920, Norfolk, VA Mon Feb 11, 2013

I already have a mortgage that is 198,000 and I'm in a county that has a 417,000 limit. does this mean I can get a second house that is 219,000 (417,000-198,000) with no money down also? Or how does this work?

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Mon Feb 11, 2013
Hi Jv5920,

Thank you for your service.

I have a ton of experience with VA mortgages and specifically 2nd tier entitlement.

In counties where the VA loan limits is $417,000, your basic entitlement is $417,000 X 25% which comes out to $104,250.

Now we need to subtract the amount of entitlement that was used on current VA mortgage from $104,250 to determine how much entitlement you have available.

If your purchase price was $198,000 then we multiply that by 25% to get the amount of entitlement that was used on that mortgage which is $49,500 so that means you have $54,750 of entitlement available.

With $54,750 in entitlement, you can buy a home for up to $219,000 on a VA mortgage without a down payment.

The question will be whether or not you can qualify for the new mortgage with the existing mortgage counted against your income.

Please feel free to contact me for more information or help. You can also find more info on my VA mortgage website by clicking the link below.

John Burke
Senior Mortgage Banker
Peoples Bank & Trust Co.
(877)228-9069
Check out my recommendations right here on Trulia from some of my past clients:http://www.trulia.com/profile/johnburke/#__rec
1 vote
John,
What would be the down payment in your example above if someone wanted to buy a home for $280k but their 2nd tier entitlment was only for $219k without a down payment.
Flag Tue Nov 12, 2013
John,
What would be the down payment in your example above if someone wanted to buy a home for $280k but their 2nd tier entitlment was only for $219k without a down payment.
Flag Tue Nov 12, 2013
, ,
Thu Dec 5, 2013
george.h.campbell, Home Buyer, 80903
John,
What would be the down payment in your example above if someone wanted to buy a home for $280k but their 2nd tier entitlement was only for $219k without a down payment.


Hi George,

In your example you would need a down payment of $15,250.00. Here is how you calculate it.

At $280,000 you would need at least $70,000 in entitlement and or equity/down payment, $280,000 X 25% = $70,000. Now we subtract what you actually have available so if you're able to go up to $219,000 without a down payment that would mean you have $54,750 of available entitlement ($219,000 X 25%)

$70,000 - $54,750 = $15,250.

Another way is to take the difference between the 2 and multiply by 25%.

Here's how that calculation looks:

$280,000 - $219,000 = $61,000 X 25% = $15,250

http://www.valoansdoneright.com/va-2nd-tier-entitlement/
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