Military Movers in Charlotte>Question Details

Dorianne Dav…, Home Buyer in Olive Branch, MS

My husband is in the military, bought his first home before we married. We rent it out when we're not stationed there. We're trying to buy a 2nd home.

Asked by Dorianne David Block, Olive Branch, MS Sun Aug 18, 2013

Because we don't know where we'll be stationed and which house we'll be living in, do we need to put down 20%? We don't want to sell the first home because we often go back there to live and eventually want to retire in the area where we'd like to buy the 2nd home.

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Hi Dorianne,

I know I'm a little late to this party, but I have some news I think you're going to like! I ran into this with a previous client of mine. Even if your husband bought the first home with a VA loan, it's still entirely possible for you to buy a second home with a VA loan, if you're planning to live there for the next two years. Contrary to popular belief, you don't have to close out one VA loan before taking out another. you just have to plan on the new home being your "primary residence" and you have to have enough eleigibility left. VA loan limits are generally $417,000, although they can be higher in some high-cost living areas. Take the amount you have left on your 1st home's loan ($200,000, for example), then subtract it from $417,000. That's the highest amount your VA loan will guarantee. You can buy a more expensive home, but you will need downpayment for the difference. There is one catch- the 2nd home has to cost more than $144,000. That's the minimum amount in order to tap into the VA's 2nd tier entitlement.

My advice, get yourself aligned with a good agent. Maybe someone with a military background. They will most likely know a good lender who can help you sort all this out. Check with to see if they have an agent in your area. The agent will credit 25% of their commission to your closing costs and will probably have a lender in their network that will offer you a discount on their origination fees, as well.

Best of luck!

Shawn Devoid (retired USAF)
Chartered Real Estate Consultant
Tierra Antigua Realty
1 vote Thank Flag Link Tue Aug 27, 2013
I can help you get the 2nd Tier VA loan approval so you can buy the new house even though you are already using your VA Entitlement. Please contact me phone/text at 858-805-5347

Happy Holidays!

Bryan Horn

ps - Wells Fargo and I don't charge a lender fee to Veterans on VA Loans. It's our way of saying Thanks for protecting our country...
0 votes Thank Flag Link Fri Dec 26, 2014
Good morning, Dorianne:
There are a LOT of options for financing your new home (and possibly refinancing your current home) that will result in your putting less than 20% down on your new home. These are best explored with a mortgage banker that knows VA and other financing. If the homes are in different states, you should be talking to a lender who is licensed in both states. I'd be glad to recommend one if you contact me through profile. If you have a full time agent with a Masters degree in Planning with Finance and over two decades of experience, working for you, you will likely do better in negotiations. I'd be pleased to provide that service. If you appreciate this answer, please give it a thumbs up, or if this was the most helpful answer, please say thanks with a best answer click.
0 votes Thank Flag Link Fri Aug 23, 2013
As a service connect disabled Veteran of the Marine Corps and one of the top 5 VA lenders in the nation for one of the largest lenders in the nation I can truly say there is a lot more than meets the eye. 1st off what was the total entitlement used on the 1st home? You do have a 2nd Tier entitlement that might be an option. Please give me a call at 6232930044. Please thank your husband for his service and thank you for your strength and commitment. Semper Fi.
0 votes Thank Flag Link Thu Aug 22, 2013
As the wife of a combat veteran, I understand the unique situation facing military families and the non-traditional lifestyle they lead. You will not necessarily have to put 20% down, but if you want to use the rental income from the first home as annual income to assist you in financing and not have the home count against your debt to income, you will need to have a 36 month rental history to show and have 20% equity in your current home. This will allow you to count the income received in rentals towards your income and you won't need to count the mortgage on the home as debt. Each lender is different and I recommend that you shop around for the best fit with a company that suits you. While I agree with the other agents that the VA loan is a great option, I have often found that if you have the credit and a little bit of down payment, you can often get a better deal and a faster close with conventional loan products. Most lenders do both government subsidized and conventional products and can give you side by side comparisons of both up-front and long term costs of each. If you have any other questions, please feel free to contact me!

Stephanie Blackburn, REALTOR
0 votes Thank Flag Link Mon Aug 19, 2013
As Dave suggested, always start with a VA loan option and work from there. If your husband has used the benefit, and not "closed out" that use, he won't be eligible, but talking to a VA loan specialist is a good idea to see what they can and cannot do for you. USAA is also a good start, but not always the best answer. Steer clear of USAA's Mover's Advantage. While I've been a happy customer of USAA for about 30 years, I'm very disappointed in that program and how it's run (very misleading to the service member).

One option you MAY have, depending on how much time you have to mess with it and how much you still owe on the first home, is to refi the first home with a non-VA loan, which will get you your VA loan benefit back to use on this loan. Could make sense since the downpayment would likely be larger on the new home and you may not even need a downpayment on the old home if you have sufficient equity in it. If it's never been refinanced, it's likely you'll get a better mortgage rate on the old home now than he did when he bought it. Lots of options. Take the time to get it right and you could save yourself a lot of money. Best of luck...
0 votes Thank Flag Link Mon Aug 19, 2013

There are some ways to go about using a VA loan on a second home and other options that might be advisable for you to use and not have to put 20% down. I am a retired Army officer and spend a great deal of my time helping fellow active and retired military veterans and families find homes in the Charlotte area. So I am pretty well versed in the programs and the benefits since I use them myself.

First, if he used his VA entitlement on the first home before you got married he cannot use it again if he still owns the home unless the home is paid for. I do not know how long he has had the home....but generally speaking it probably is not paid for right now. However; depending on the rate he could refinance the house and remove the VA loan form the books and get his entitlement back that way as well. I have done this and seen it done in the past where someone refinanced their home away form the VA in order to get their entitlement back because they knew they were going to move and did not want to sell their home.

Second option is this home you will be purchasing is going to be a primary residence and the other home is currently rented out and based on your question I believe you can show a consistent rental when not stationed there. This will allow you to purchase another home with out 20% down. Because the new home will be your primary residence. I had a similar situation with a couple that kept one place as a rental. They ended up doing a conventional loan with 5% down. Depending on your credit score you can get them as low as 3% down.

There are options available o you based on what you said. I would be happy to help you out or answer any other questions for you. Please do not hesitate to give me a call or e-mail me back if I can be of assistance to you.

Dave diCecco
Coldwell Banker United
0 votes Thank Flag Link Mon Aug 19, 2013

To answer your question about 20% down, the answer is probably no. A VA loan does not require any down payment. However, to get the loan payment that you may want, you may have to put money down. Ask a couple of lenders to run your numbers and at least one to check your credit.

Most military service-men and service-women use the USAA for loans and relocation. Are you talking to these folks? With out knowing more of your finances, I really can not offer you any more advice. Most lenders are very specific in what they want to see with leases, and how the rents are counted against the debt. I would not make any assumptions based on what lenders did in the past because the business of lending has changed dramatically over the last 6 years.

Wishing you success,
0 votes Thank Flag Link Sun Aug 18, 2013
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