How to take out a VA loan


Take out a VA loan

The VA mortgage is the best home loan program in the market for veterans, military and military families. It may also be the best mortgage loan available to you, even if you are not Eligible VA. This is because you don’t have to be a veteran to take out a VA loan.

Check your new rate (June 17, 2021)

Assume someone else’s mortgage

When most people think about buying a home, they follow standard procedures for saving for a down payment, prequalifying for a mortgage, and shopping for their home.

If you want to save money while still being able to buy your dream home, there may be another option you haven’t considered: taking on someone else’s mortgage.

When you assume a mortgage, you take over the current owner’s monthly payment.

Buying a home with an assumable mortgage is even more attractive when interest rates are on the rise.

As an example, let’s say a seller financed $ 200,000 for his house in 2013 at an interest rate of 3.25% on a 30-year fixed loan.

Using this scenario, their principal and interest payment would be $ 898 per month.

Suppose the current 30-year fixed rates average 4.10%.

If you funded $ 200,000 at 4.10% for a 30-year term, your monthly principal and interest payment would be $ 966.

In addition, since the seller has already paid four years on the loan, he has already paid almost $ 25,000 in interest on the loan.

By assuming the loan, you would save $ 34,560 on the 30-year loan due to the interest rate difference. You would also save about $ 25,000 with interest already paid by sellers.

This represents a total savings of nearly $ 60,000!

The Basics of Assuming a VA Mortgage

At one point, all VA loans were freely assumable. This means that veterans and non-veterans could take out a VA home loan.

Nowadays, there are two ways to take out a VA loan.

1. The New Buyer is a Qualified Veteran who “substitutes” their VA Eligibility for Seller Eligibility.

2. The new buyer qualifies under VA standards for the mortgage payment. This is the safest method for the seller because it allows them to assume their loan knowing that the new buyer is responsible for the loan and that the seller is no longer responsible for the loan.

The lender and / or the VA must approve a loan assumption.

Loans managed by a lender with automatic authority can process assumptions without sending them to a VA regional lending center.

For lenders without automatic authorization, the loan must be sent to the appropriate VA regional lending center for approval. This process will usually take several weeks.

When VA loans are taken over, it is the duty of the service agent to ensure that the homeowner assumes that the property meets the requirements of the VA and the lender.

Check your new rate (June 17, 2021)

Additional requirements for taking out a VA loan

For VA mortgage assumption to take place, the following conditions must be met:

  • The existing loan must be current. Otherwise, any overdue amount must be paid on or before closing.
  • The buyer must qualify based on VA credit and income standards.
  • The buyer must assume all mortgage obligations, including repayment to the VA if the loan is in default.
  • The original owner or new owner must pay a finance charge of 0.5% of the principal balance of the existing loan.
  • Processing fees must be paid in advance, including a reasonable estimate of the cost of the credit report.

How to find assumable VA loans

There are several ways for home buyers to find an assumable VA loan.

Believe it or not, print media are still alive and well. Some home sellers advertise their suspected home for sale in the newspaper or in a local real estate publication.

There are a number of online resources for finding assumable mortgages.

Websites like and provide a way for homeowners to market their properties to homebuyers looking to take out a loan.

With the help of the Multiple Listing Service (MLS), real estate agents remain a great resource for home buyers. This also applies to home buyers who are specifically looking for assumable VA loans.

What are the mortgage rates today for assumable VA loans?

Assumable VA loans can offer several advantages over new home loans.

With current mortgage rates on the rise, VA assumable mortgages are a great option for homebuyers.

Check your new rate (June 17, 2021)


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