If you are a veteran looking to purchase a new home or refinance your existing home, you might be wondering if you can combine VA home loans. The answer to this question depends on your specific circumstances and understanding the guidelines set by the Department of Veterans Affairs (VA). In this article, we will explore the possibility of combining VA home loans and provide you with the information you need to make an informed decision.
The Basics of VA Home Loans
Before delving into the topic of combining VA home loans, let’s quickly go over the basics. VA home loans are mortgage loans that are guaranteed by the VA. These loans are offered to eligible veterans, active-duty service members, and surviving spouses. VA home loans are known for their favorable terms, including no down payment requirement and competitive interest rates. Now, let’s move on to the main question at hand.
Refinancing with a VA Home Loan
One way to combine VA home loans is through refinancing. If you currently have a VA home loan and are looking to refinance for better terms or to take advantage of current low interest rates, you can do so with a VA Interest Rate Reduction Refinance Loan (IRRRL). This type of refinancing allows you to replace your existing VA loan with a new one at a lower interest rate. It does not require a new Certificate of Eligibility or a new appraisal. It’s important to note that you cannot add additional funds to the loan balance when using an IRRRL, as it is a streamlined process.
Combining Two VA Home Loans for a Second Property
If you already have a VA home loan for your primary residence and are looking to purchase a second property, you can potentially combine the VA home loan benefits for both properties. Here’s how:
- Verify your remaining VA entitlement: Each eligible borrower has a certain amount of entitlement, which is the VA’s guarantee for the loan. To combine VA home loans for two properties, you need to have sufficient remaining entitlement to cover both loans.
- Meet lender requirements: Lenders may have additional requirements when it comes to combining VA home loans for multiple properties. They will consider factors such as your credit score, debt-to-income ratio, and property value.
- Apply for a second VA home loan: If you meet the above criteria, you can apply for a second VA home loan for your new property. The process will be similar to when you initially obtained your first VA home loan.
| Property | Maximum Loan Amount |
|---|---|
| Primary Residence | $510,400 (higher in high-cost areas) |
| Second Property | Please consult your lender for applicable limits |
Combining VA Home Loans with a Co-Borrower
If you are unable to qualify for a VA home loan on your own, you can consider adding a co-borrower to the loan. The VA allows for this type of arrangement, as long as the co-borrower is a spouse or another eligible veteran. Combining VA home loans with a co-borrower can increase your chances of approval and may offer more favorable loan terms.
Combining a VA Home Loan with Another Financing Option
In some cases, you may need additional financing to cover the cost of your desired property. While you cannot combine two VA home loans for the same property, you can combine a VA home loan with another financing option. For example, you can use a VA loan for the bulk of the purchase price and secure a conventional loan or an FHA loan to cover the remaining amount.
Combining VA Home Loans: The Bottom Line
Combining VA home loans is possible under certain circumstances, such as refinancing or purchasing a second property. However, it’s essential to understand the eligibility requirements and guidelines set by the VA and lenders. Consulting with an experienced real estate broker or lender can help you navigate the process and make the best decision for your specific situation. Remember to weigh the pros and cons, consider your long-term financial goals, and thoroughly review the terms and conditions before combining VA home loans.