It may not be as sticky as you think.
VA has a 2nd tier or bonus entitlement.
Here's how it works:
You basic entitlement is $36,000 for a home of $144,000 or less. If you go higher, your entitlement is 25% of whatever VA has set the county loan limit it at. In most areas that limit is $417,000 so your entitlement would be $104,250 ($417,000 X 25%). VA requires that you have enough entitlement and or down payment/equity to cover 25% of the loan amount.
So let's say your first home was $144,000, you would have used $36,000 of your entitlement. Now fast forward to today. Let's say you're looking at a new home for $250,000. You would need to have $62,500 ($250,000 X 25%) of entitlement for a VA mortgage which you would. Here's how the math would look.
Entitlement of $104,250 minus what was used, $36,000 = $68,250. This would be your remaining available entitlement which would be enough to "buy" home for $273,000 without a down payment.
What we need to do is figure how much entitlement he has available and whether or not it's enough to cover the loan amount on your current mortgage. The idea is to basically sell the house to your ex so that your existing VA mortgage gets paid off which in turn means your entitlement will be fully restored.
Please feel free to contact me for more information or help with your VA mortgage. You can also find more info on my VA mortgage website by clicking the link below.
Senior Mortgage Banker
Peoples Bank & Trust Co.