The only thing that is more difficult than buying a house is keeping it. Since the global financial crash of 2008, it’s been harder than ever to get credit or a loan. This fact is especially true when it comes to veterans and service members of the military. If you are a veteran or a service member, applying for a VA loan is a more practical process than applying for a traditional mortgage. In fact, you can apply for multiple VA loans under qualifying circumstances.
The average price of a new home in the United States was $318,000 in May 2020.
If you are a veteran, former, or current service member of the United States, it’s in your best interest to see if you can get a VA loan.
Before we talk about multiple VA loans, let’s talk about VA loans in a general sense.
VA Loan 101
A VA loan is a mortgage option that does not require a down payment to buy a house. This $0 down payment mortgage option is only available to Veterans, Service Members, and qualifying military spouses.
VA loans are not offered directly by the U.S. Department of Veterans Affairs, also known as the VA, to veterans.
Veterans secure VA loans from private lenders like a traditional mortgage. The VA then acts as a loan guarantor to minimize financial risk for the private lender.
The private lender is financially protected fully by the VA — an extension of the United States government — if the buyer ever defaults on the loan. So, private lenders are incentivized to offer $0 down payment mortgages via VA loans to veterans.
That is why veterans can assume multiple VA loans under qualifying conditions.
The VA Home Loan initiative was launched in the waning months of WWII in 1944. It was created to assist returning service members and veterans more easily refinance or purchase a home.
VA loans are a major financial lifeline for veterans and service members who can’t afford down payment fees or have bad credit. This is especially true since mortgage lending requirements have become much stricter since the housing market collapse of 2008.
Since its founding, the VA Home Loan initiative has guaranteed 24 million VA loans through private lenders on the behalf of veterans.
And part of that guarantee that the VA extends to qualifying veterans is the ability to get multiple VA loans.
Yes, Qualifying Applicants Can Get Multiple VA Loans
As long as you qualify under application standards, you can get multiple VA loans on a consecutive basis.
VA loans can be utilized again and again as long as you are eligible for the three qualifications for multiple reuses.
The qualifications for multiple VA loans include:
- You have paid the mortgage in full and/or have sold the house
- The house is assumed by another VA loan qualifying veteran
- You have a mortgage balance and own your home
Before you get on your way to applying for multiple VA loans, here is how to apply for your first one.
Applying for a VA Loan
The first thing you must do before you can apply for a VA loan is to get a COE or a Certificate of Eligibility.
You will need a Certificate of Eligibility to prove your qualifications based on your duty status and history of service.
If you are a veteran, active or former service member, disabled, discharged, and so on, you must contact the appropriate officer to get written proof of service.
Then, you can apply for your Certificate of Eligibility online, or by snail mail, at the VA’s official website.
You will then have to meet your mortgage lender’s income and credit requirements to qualify for a VA loan. Your lender will probably be a private lender or corporate financial institution.
Still, that is hardly the end of it when it comes to the application process.
The potential lender will request a VA-initiated appraisal of the home. Your qualifying standards and application requirements for a VA loan differ according to your circumstances.
For example, if you are of indigenous ancestral descent, there is a Native American Direct Loan application for VA loan considerations.
Now let’s discuss the benefits of a VA loan over a traditional mortgage for qualifying applicants.
Differences Between VA Loan and Traditional Mortgage
Along with gaining access to multiple VA loan opportunities, there are many benefits for veterans who apply for VA loans.
$0 VA Loan Down Payment
For many veterans and service members, attaining a traditional mortgage can be a Herculean feat due to exacting qualifying standards.
The VA Home Loan initiative is virtually the only $0 down payment mortgage available today, relative to most traditional mortgage application processes.
The average down payment for a traditional mortgage is 12%.
The exact down payment amount that a traditional mortgage applicant would pay varies according to personal circumstances. Yet, such down payment requirements can be as high as 20% is some circumstances.
PMI Requirements
If you are applying for a traditional mortgage and can’t pay a down payment between 12% and 20%, you may require personal mortgage insurance.
Private mortgage insurance is designed to protect the lender, not the mortgage buyer, in case the buyer defaults on their mortgage payments.
When you buy a traditional mortgage, personal mortgage insurance just becomes another expense hassle to deal with.
If you are a veteran, not only could you qualify for multiple VA loans under qualifying conditions, no private mortgage insurance is required.
VA loans are financially backed by the federal government. The mortgage lender is fully protected from default risk, so veterans don’t have to worry about private mortgage insurance.
Lower Mortgage Rates
If you qualify for multiple VA loans, you have the added benefit of paying lower mortgage interest rates relative to traditional mortgages.
Most VA loans have a mortgage interest rate of 3.25%.
When you apply for a traditional mortgage loan, how much you pay in interest rates will depend on your personal financial circumstances.
Current traditional mortgage interest rates are about 3.35%. If you have perfect credit, like over the 800-mark, your mortgage interest rate could be less than 3%. However, if you have bad credit or are considered a financial risk, you could pay as much as 7.84%.
Easier Qualification Standards
If you can qualify for multiple VA loans, the qualifying standards can get relatively easier the more that you apply.
It can take up to 60 days to get approved for a traditional mortgage under most circumstances.
For most VA loan applications, it can take anywhere from 40 to 50 days to be approved.
If you can qualify for multiple VA loans, the application process should become progressively easier.
Never Assume
Talk to a lender, VA official, or financial advisor about qualifying for multiple VA loans.
Never assume it isn’t possible.
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Allen Francis was an academic advisor, librarian, and college adjunct for many years with no money, no financial literacy, and no responsibility when he had money. To him, the phrase “personal finance,” contains the power that anyone has to grow their own wealth. Allen is an advocate of best personal financial practices including focusing on your needs instead of your wants, asking for help when you need it, saving and investing in your own small business.