How Many Times Can You Use a VA Home Loan?

If you’re a veteran of the armed forces, you may be wondering how many times you can use your VA home loan benefit. The answer may surprise you – you can actually use your VA loan as many times as you want!

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Introduction

Unfortunately, there is a lot of misinformation out there about the VA home loan program. One of the most common misconceptions is that you can only use your VA loan benefits once. This simply isn’t true! In fact, you can use your VA loan benefits multiple times, as long as you pay off your previous VA loan in full before taking out a new one.

The Basics of a VA Home Loan

A VA home loan is a mortgage loan that is guaranteed by the United States Department of Veterans Affairs (VA). The loan is available to veterans, active duty service members, and reservists. The VA home loan is a great benefit for veterans and service members who want to purchase a home. The loan provides veterans and service members with a competitive, low-interest rate and low down payment.

What is a VA Home Loan?

A VA home loan is a mortgage that is guaranteed by the U.S. Department of Veterans Affairs (VA). The loan is available to eligible veterans, active-duty service members, reservists, and eligible surviving spouses. The VA does not lend money for the mortgage, but it does provide a guarantee to the lender in case of default. This guarantee makes it easier for veterans to obtain financing and get favorable loan terms, including low interest rates and no down payment requirements.

How Does a VA Home Loan Work?

The Department of Veterans Affairs (VA) home loan program helps veterans, active duty service members and their families qualify for a mortgage. VA loans are issued by private lenders, such as a mortgage company or bank, and guaranteed by the VA. This guarantee means the lender is protected against loss if you default on the loan.

VA loans are available for a primary residence only. You cannot use a VA loan to purchase investment property or a second home.

To qualify for a VA loan, you must be an eligible service member or veteran. You will also need to obtain a Certificate of Eligibility (COE) from the VA to show your lender that you qualify.

Who is Eligible for a VA Home Loan?

The Department of Veterans Affairs (VA) insures home loans made by approved lenders, such as banks, thrifts and credit unions. The program is available to eligible veterans, reservists, active-duty service members and certain surviving spouses. A VA loan can be used to buy a home, build one or make improvements on a home that you already own. You can also refinance a non-VA loan into a VA loan.

The Types of VA Home Loans

The VA home loan is a great tool for Veterans to use when looking to purchase a home. But how many times can you actually use it? The answer is “it depends”. There are a few different types of VA home loans, and each has their own set of rules. We’ll go over the most common types of VA home loans and how often you can use them.

Purchase Loans

The U.S. Department of Veterans Affairs (VA) offers several different types of home loans that are designed to help veterans, service members and surviving spouses buy, build or improve a home. Some home loan benefits are only available if you purchase a home, while others can be used in combination with a purchase loan or on their own.

Purchase Loans
A VA-backed purchase loan helps you buy a single-family home, condominium, cooperative apartment or manufactured home (on an eligible site). You can also buy and improve a home at the same time with what’s called a “cash-out refinance” – taking out a new loan for more than what you currently owe on your existing one and using the difference to pay for upgrades or renovations.

Refinance Loans
If you have an existing VA-backed home loan and you want to lower your monthly mortgage payments – or make your payments more stable – an interest rate reduction refinance loan (IRRRL) may be right for you. Refinancing lets you replace your current loan with a new one under different terms, and possibly with a lower interest rate.

Refinance Loans

The Department of Veterans Affairs (VA) Home Loan program allows eligible active-duty military members, reservists, National Guard members, veterans and certain surviving spouses to buy a home with no down payment and no monthly mortgage insurance.

You can use your VA home loan benefits multiple times, but there are a few things to consider before taking out another loan.

If you currently have a VA loan, you may be able to lower your interest rate by refinancing through the Interest Rate Reduction Refinance Loan (IRRRL) program. The IRRRL is sometimes called the VA Streamline Refinance because it’s a faster and cheaper way to get a new loan than getting a brand-new VA loan.

To be eligible for the IRRRL program, you must meet the following criteria:
-You must currently have a VA loan
-You must live in the home that is securing the loan
-You must be up to date on your payments
-You must certify that you have not already used your entitlement by getting a previous VA loan or by substituting your entitlement for another type of mortgage loan

Cash-Out Refinance Loans

A Cash-Out refinance loan may be available to qualified borrowers. This type of loan allows you to take cash out of your home equity to pay off debt, make home improvements, or finance other needs. Unlike a line of credit, once you close a Cash-Out refinance loan, you cannot reopen it and draw additional funds at a later time.

The Benefits of a VA Home Loan

A VA home loan is a great way to finance a home. The loan is backed by the Department of Veterans Affairs, and it is available to veterans, active duty service members, and reservists. The loan is 100% financing, which means that you do not have to put any money down. The loan also has a very low interest rate, and it is a 30-year fixed-rate loan.

No Down Payment

You may qualify for a no down payment loan of up to 100% of the purchase price, which means you can buy a home with no money out of your own pocket. This is one of the biggest advantages of a VA home loan.

Competitive Interest Rates

Competitive interest rates are one of the biggest benefits of a VA home loan. Because the Department of Veterans Affairs insures these loans, lenders are willing to offer lower interest rates to borrowers. This can save you thousands of dollars over the life of your loan.

No Mortgage Insurance

One of the benefits of a VA home loan is that there is no mortgage insurance required. This can save the borrower a significant amount of money each month on their mortgage payment.

For conventional loans, borrowers are required to pay for private mortgage insurance (PMI) if they are unable to put down 20% for a down payment. For FHA loans, borrowers are required to pay for mortgage insurance regardless of the size of their down payment. With a VA loan, however, there is no mortgage insurance required regardless of the size of the down payment.

How Many Times Can You Use a VA Home Loan?

You may be able to obtain another VA home loan even if you currently have one. However, you may not be eligible for certain benefits, and you’ll likely need to pay a down payment. Let’s go over the requirements for getting another VA home loan.

The Rule of Thumb

There is a general rule of thumb that you can use a VA home loan once every two years. However, there are some circumstances where you may be able to get another loan before that time period has elapsed.

For example, if you sell your home and pay off your VA loan, you will be able to reapply for another loan right away. Or, if you refinance your home with a new VA loan, you may be eligible to get another loan immediately after paying off the first one.

In other words, the two-year rule of thumb is not set in stone. If you have questions about whether or not you are eligible for another VA home loan, it’s best to speak with a VA-approved lender.

Exception to the Rule

For the majority of homebuyers using VA financing, there’s no limit to how many times you can use the loan program. You can get a new VA loan, even if you still owe money on your first VA loan. That said, if you default on a VA loan, you can’t get another one until you’ve repaid the money you owe. If you have any questions about your eligibility for a new VA loan, contact your regional Loan Center.

Conclusion

You can technically use a VA home loan as many times as you want. However, it usually only makes sense to do so if you sell your previous home before buying a new one. Otherwise, you’ll just end up with two mortgages and two corresponding monthly payments. Additionally, if you use your VA loan benefits to purchase a multi-unit property, you may only be eligible for one additional loan.

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