Mortgage News

Home Buyer Q & A

November 19th, 2012

  • We are interested in purchasing a new home.  We currently own a home that is being rented but is financed using my VA eligibility.  We would like to purchase our new home with our VA eligibility as well.  How do we do this and what are our options, the new purchase price is 500,000?  You have a couple of different options.  On your home that is rented, you could refinance the property to release your eligibility, maximum borrowed would be 75% of the appraised value.  If your loan exceeds this amount and you do not plan to pay down the balance of the loan, we could then look at split eligibility.  You will have a down payment using your VA eligibility, whether split or restored full elgibility, as the purchase price is in excess of $417,000 which is the area's limit.  With split eligibility, you may find your down payment to be higher.  It depends on how much eligibility you have and how much is used.  The best way to determine is to pull your Certificate of Eligibility and determine.  If you are able and willing to use funds for a down payment, you may have other options available to you.

 

  • As noted in the previous question, the property that is now being rented and has the VA loan, we do not believe the property will appraise high enough, and we would prefer to put any of the additional money toward our new purchase.  Do we have any options to refinance our investment property?  You have a VA loan against the property, so at some point was this your primary residence?  If it was, then you do have the ability to do a VA IRR (Interest Rate Reduction) loan.   
  • We are interested in purchasing a beach house as a second home.  We would only like to put 10% down, is this a possibility?  Yes.  Traditionally, people looked at purchasing with an 80% first mortgage and a 10% second mortgage (equity line/loan) to finance a 90% purchase.  Borrowing 10% on the second mortgage has become a little difficult, but we can sometimes find a reasonably priced source for this.  Other option would be to borrow 90% on a first mortgage with monthly mortgage insurance for loans of $417,000 or less.  It is worth a cost comparison as sometimes depending upon the borrower's scenario, the monthly mortgage insurance may be fairly inexpensive.        

- Jennifer Keenan, Senior Mortgage Consultant, NMLS# 101837, Tidewater Home Funding 757-366-8690