Maximizing VA Benefits: The Untold Secrets of How You Can Get a Second VA Loan Without Paying Off Your Old One!

Maximizing VA Benefits: The Untold Secrets of How You Can Get a Second VA Loan Without Paying Off Your Old One!

Mortgage Broker
Alex MacLagan
Published on January 22, 2024
Second VA Loan

Maximizing VA Benefits: The Untold Secrets of How You Can Get a Second VA Loan Without Paying Off Your Old One!

Hello, fellow veterans and homebuyers! I'm Alex MacLagan, the Mortgage Doctor, and I'm here to share some amazing secrets with you. Secrets that could save you thousands of dollars, help you buy your dream home, and make the most of your VA benefits with a second VA loan.

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You probably already know that VA loans are one of the best mortgage options out there. They offer low interest rates, no down payment, no mortgage insurance, and flexible credit requirements. They also come with a unique benefit that most other loans don't have: the ability to get a second VA loan without paying off your first one.

That's right, you heard me. You can have two VA loans at the same time, under certain conditions. This is a huge advantage for veterans who want to move to a new home, buy a vacation property, or invest in real estate. But how does it work? And what are the rules and limitations? That's what I'm going to explain in this article.

How to Get a Second VA Loan

The key to getting a second VA loan is understanding your VA entitlement. This is the amount of money that the VA guarantees to repay the lender in case you default on your loan. Your VA entitlement is based on the county loan limit, which is the maximum amount that the VA will insure in your area. For most counties in 2024, the loan limit is $548,250.

When you get your first VA loan, you use up some or all of your entitlement, depending on the size of your loan. For example, if you buy a home for $300,000, you use up $300,000 of your entitlement. If you buy a home for $500,000, you use up $500,000 of your entitlement. And if you buy a home for $600,000, you use up your entire entitlement of $548,250, and have to pay a down payment for the difference.

But here's the secret: you don't have to use up all of your entitlement on your first VA loan. You can save some of it for later, and use it to get a second VA loan. This is called split entitlement or second-tier entitlement. It allows you to have two VA loans at the same time, as long as the total amount of both loans does not exceed the county loan limit.

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For example, let's say you buy a home for $300,000 with your first VA loan, and use up $300,000 of your entitlement. You still have $248,250 of entitlement left. Now, you want to buy another home for $400,000 with a second VA loan. You can use your remaining entitlement of $248,250, and pay a down payment of $75,875 (25% of the difference between the loan amount and the entitlement). This way, you can have two VA loans at the same time, without paying off your first one.

Of course, there are some conditions and requirements that you have to meet to qualify for a second VA loan. Here are the main ones:

  • You have to be eligible for VA benefits, and have a valid Certificate of Eligibility (COE).
  • You have to occupy or intend to occupy one of the properties as your primary residence. You can't use both VA loans for investment or rental purposes.
  • You have to meet the income and credit standards of the lender and the VA. You have to show that you can afford both mortgage payments, and have a good credit history.
  • You have to comply with the VA's occupancy and disposal rules. You have to move into the new home within 60 days of closing, and you can't sell or transfer the old home without notifying the VA and the lender.

Why You Should Get a Second VA Loan

Now that you know how to get a second VA loan, you might be wondering why you should do it. What are the benefits of having two VA loans at the same time? Well, there are many reasons why you might want to consider this option. Here are some of the most common ones:

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  • You want to move to a new home, but you don't want to sell or refinance your old one. Maybe you have a lot of equity in your old home, and you don't want to lose it. Maybe you want to keep it as a backup plan, in case you don't like the new area. Maybe you want to rent it out and earn some extra income. Whatever the reason, getting a second VA loan allows you to buy a new home without giving up your old one.
  • You want to buy a vacation home or a second home. Maybe you have a favorite spot where you like to spend your holidays, or a place where you plan to retire. Maybe you want to have a place for your family or friends to visit. Getting a second VA loan allows you to buy a vacation home or a second home, as long as you use one of them as your primary residence.
  • You want to invest in real estate. Maybe you have a passion for real estate, and you want to build your portfolio. Maybe you want to diversify your income sources, and take advantage of the appreciation and tax benefits of owning property. Getting a second VA loan allows you to invest in real estate, as long as you live in one of the properties.

As you can see, getting a second VA loan can open up a lot of opportunities for you, as a veteran and a homebuyer. It can help you achieve your financial and personal goals, and make the most of your VA benefits.

How to Get Started with a Second VA Loan

If you're interested in getting a second VA loan, the first step is to contact a reputable VA lender, like MacLagan Home Loans. We are a mortgage lender that specializes in VA loans, and we have the experience and expertise to guide you through the process. We can help you:

  • Determine your eligibility and entitlement for a second VA loan.
  • Find the best loan program and interest rate for your situation.
  • Apply for your COE and pre-approval letter.
  • Shop for your new home and make an offer.
  • Close on your loan and move into your new home.

We can also help you with other VA loan options, such as:

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  • VA Streamline Refinance (VA IRRRL): This is a fast and easy way to lower your interest rate and monthly payment on your existing VA loan, without an appraisal or income verification.
  • VA Cash-Out Refinance: This is a way to tap into your home equity and get cash for any purpose, such as paying off debt, making home improvements, or covering emergency expenses.
  • VA Renovation Loan: This is a way to finance the purchase and renovation of a fixer-upper, or to make upgrades to your current home, with one loan and one closing.
  • VA Jumbo Loan: This is a way to buy a luxury home or a home in a high-cost area, with a loan amount above the county loan limit, and a low down payment.

At MacLagan Home Loans, we are committed to serving our veterans and helping them achieve their homeownership dreams. We have a team of dedicated and knowledgeable loan officers, who are ready to answer your questions and assist you with your VA loan needs. We also have a fast and smooth loan process, with online application, digital verification, and electronic closing.

If you're ready to get started with a second VA loan, or any other VA loan option, contact us today. You can call us at (847) 899-6882, or complete our VA Loan Qualifier.

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