A VA loan is a good option that a veteran has to invest in real estate at an age where his income is not good enough to take out a loan from another financial institution. Due to the risk of repayment, not all leading financial institutions willingly grant loans to veterans. Can I buy a second home with a VA loan?
How do you qualify for a VA loan?
Some criteria must be met for second homes to qualify for a VA loan. These criteria are:
- The buyer can buy a house to use as holiday homes. These types of properties are not eligible for VA loans.
- As mentioned above, the buyer must spend a significant amount of time at home every year to qualify for a VA loan.
- It is very important for the buyer to consult with a recognized VA credit advisor before taking out the loan.
There are also some rules regarding home occupation and relocation for military service. In the case of a military person who is currently active in service, there is a high probability that he will be moved more often. The base of the service technician changes with each move. In this case, if a service technician takes out a VA loan, his spouse can continue to stay in this house. However, apart from the spouse, no other family member can take advantage of it.
If the house is abandoned by both the service technician and the spouse because of the transfer as a result of military orders, the loan must be repaid by resale or refinancing.
How to use a VA loan for a second home purchase after excluding VA
At some point everybody has hard times. However, VA certainly believes in giving Veterans a second chance. In the event of early exclusion or short sale of a home with a VA loan, the Department of Veterans Affairs will usually incur a financial loss. VA guarantees the lender VA, and when the property is sold for less than the loan balance, this affects VA Veteran’s entitlement. However, this does not mean that the VA permissions completely disappear! Do you remember the premium entitlement we just talked about having multiple homes with VA loans at the same time? Well, VA also allows you to use your entitlement to buy another home after excluding VA or short selling.
Examples of measurable net benefits include:
- Moving to a larger home
- We’re getting closer to work
- Buying a home for your spouse if your spouse lives out of state
- Purchase of a smaller home as a result of divorce or a significant change in financial circumstances
Understanding how acceptable the use of a second home loan is, it is important for borrowers to be aware that the VA home loan program is intended for use at the owner’s place of residence. The veteran borrower must certify that the purpose of the loan will be their own residence or the residence of their spouse. The primary residence is determined by the owner residing in it for at least six months and one day a year.