We love the fact that living in North Carolina, we are in constant contact with Active Duty Veterans, and those who are retired from the Service. Many times, we talk to folks who want to know if they MUST sell their current residence in order to purchase a new one in NC, using their VA Benefits… the answer is, maybe not. There are some situations where you can actually own a home, and buy another one using the VA ( no down payment required) loan!
Buying A Primary Residence Or A Second Home
It’s important to remember that as a Veteran, purchasing a home in North Carolina is usually CHEAPER by using your VA Home Loan Benefits. Mortgage Loans backed by the Government (which VA Loans are) benefit from having the lowest interest rates – plus they don’t have PMI. So, even if you are going to put money down on your mortgage – you should STILL consider a VA Mortgage loan to finance the house to get the best payment
These loans are for Owner Occupied property. So, we can’t make a VA Loan on a “Vacation” Home or Investment Property.
The good news is that there is a provision that allows you to own two homes, and still be able to use the program. For example, if you are stationed at Fort Sam Houston and you buy a house in San Antonio, and then you are deployed… and your spouse wants to live near family in NC. In that situation, we can probably use your benefits to purchase the home in NC. We must prove a “net tangible benefit” and your Spouse must live in the home for at least 6 months out of the year.
Other Net Tangible Benefit Examples:
- Moving to a larger home: if your current residence is no longer large enough for your family, you may not be required to sell your current residence to purchase a new one. Recently we made a loan to a Veteran who lived in a 2 bedroom Townhouse with their spouse and one child. They then became pregnant with triplets – and NEEDED a bigger house!
- Moving closer to work: this is pretty self explanatory
- Purchasing a smaller home as a result of divorce, or a substantial change of financial circumstance: Again, if you own a home, but due to divorce you need to purchase another home, use your benefits! Please don’t read the second part of this statement to mean that if you are no longer able to make your payments on your current house, you can just “abandon” that house and buy a smaller one with your VA benefits!
It’s still important to remember that you can not use your VA Guarantee for more than one outstanding loan at a time. So in the example I just gave with a Veteran at Ft. Sam – if the house in San Antonio was purchased with a VA loan – you won’t be able to use those same benefits to purchase a home here. (I’m hoping this makes sense, if I just confused you – call me!)
Other Details to Remember:
- If you are retiring from the Military, you are required to move into the property within 60 days.
- Surviving Spouses are eligible for only one Owner Occupied home.
- There’s no down payment required up to a purchase of $424,100. For homes priced higher than that, the down payment is a fraction of what it would be with a Conventional Loan.
- You can Refinance a VA home loan, even if you don’t still live there as your primary residence
- It’s important to remember that on a VA Loan, we must also include CHILD CARE expenses… which is something we do NOT have to consider with other Government backed programs, including FHA and USDA Home Loans. This can also make it difficult to qualify, because it is impacting your monthly VA Loan Residual Income Requirements.
- If you previously used your VA Benefits, you might be able to get your eligibility restored
Because all mortgage loans that are backed by the Government have the “best” interest rates right now, this is a GREAT program to use! In addition, there’s no monthly PMI! Even if you are purchasing a “Bigger” home, and you are going to make a downpayment, you might still want to use this program! If you are considering a purchase, and want to know more about qualifying for a VA mortgage loan, please call Steve and Eleanor Thorne, Govenment Mortgage Loan Experts, 919-649-5058