VA Loan Assumption - Advantages, Disadvantages, Rules & Process | Know Your Benefit
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- เผยแพร่เมื่อ 16 มี.ค. 2022
- A VA loan assumption can be a great benefit for both the veteran when selling their home and the buyer. A VA assumable mortgage loan can help the veteran sell their home with a more favorable interest rate.
The Department of Veteran Affairs does have rules and a process that must be followed for an assumption. In this video, I cover some of the guidelines and talk about the advantages & disadvantages.
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If you sell your home to another veteran and they assume your loan, their entitlement can be substituted for yours. This makes all of your entitlement available.
Sir, using your example. The 93,000 owed to seller, can it be paid to the seller assuming I was approved for a 600,000 home loan, utilize 93,000from the loan to pay the seller?
@@RSP11KING no unfortunately. With a VA loan assumption, you'll have to be approved with the veteran's current lender and you only assume the current amount owed.
@@jasonskinrood1474 thank you for the information 🙏🏼
@@RSP11KING You're welcome!
@@jasonskinrood1474I saw online the house was bought for $450,000
And the realtor told me their is an assuable loan for 850,000.
With the math add up?
This is the information ℹ️ I need.
Thank you bro
Aloha! I have been getting emails from you for years since I got my VA mortgage! ❤🎉😮
Ty. Valuable information.
Thanks @Steve43952.
Thanks so much for this very informative video! One quick question, if the loan was sold (Pennymac in my case) do we work with the original mortgage broker or Pennymac with the loan assumption?
It would be whomever the current mortgage lender is. In your case, it would be Pennymac.
Thanks for the video Jason! Is there a website where one can look up properties where owners are looking to have their mortgages assumed?
Not that I'm aware of, but more listing are featuring it. Check with an agent to see if your local MLS has the ability to find veterans willing to let others assume their loan.
@@jasonskinroodmlo Thank you!
Do you recommend going through my lender over going through the VA even though the VA gas to approve the assumption?
Very helpful information , do you know how long it typically takes for this whole process to go through ?
The seller's lender would be able to provide that information, but I would plan on 45 to 60 days.
Me and little sister would like to get a multi family unit with my Dad’s VA loan in our home state and assume the VA loan from him later on. I have a VA loan too! But I live in another state!
Solomon, give me call at your convenience to discuss more about what you want to do.
Hi Jason, this video is really helpful! I am in the exact same scenario as your example and I am the buyer. There is over 200k in equity in the house I’m planning to purchase. Do you know if I can get another loan with the VA loan I’m assuming?
ChiLeana, you would need to speak with the seller's mortgage company to find out if they have any options available. Other options would be to have the seller carry the equity as a private note or find a lender that will do a second mortgage for you as part of the purchase.
Hey what did you end up doing? I am looking into something like this as well
I am a civilian looking to assume a VA loan, however the property is in foreclosure. The remaining loan amount is $155k and the amount to get the loan to date is $15k. I’m assuming we’d need to purchase the home at atleast $170k to cover the loan and payments needed to get it up to date? Any contacts that I may be able to get in contact with to discuss an approach to closing?
Nic, the loan definitely has to be current in order to assume the loan from the veteran. I would suggest working with the veteran/seller to have them contact their current lender to see what options are available to have it brought current so you can assume it.
Thank you for the informative video. Question: does the assumer have to always pay the difference or can the seller give the home away with the equity in the home? Thanks again!
The seller can sell the home for the existing balance of the loan, the market value or anything in between.
@@jasonskinroodmlo if theres a difference between their bottom line and the sales price, does the buyer have to come out of pocket? I'm assuming this is the case as the buyer is "assuming" the original loan balance and rate?
@UnderCoverDoc yes, it is the buyer's responsibility to come up with the difference.
I am coming up on 2 years since my divorce. During my marriage I purchased a home using my VA entitlement with my then wife. . At the time of my divorce the home was negative in equity...not so much anymore. Long story short..she still lives in the home with my children. Is a VA loan assumption possible for her (non-veteran) to take over the loan and remove myself financially from the loan and free up my VA Entitlement tied to this house? If so, would anything change in terms of loan details (interest rate, terms, payment, etc)? Or would it all remain the same and my name would simply be removed from the existing loan?
She could assume the loan at the current terms if she meets the income & credit criteria set by the current lender. If she assumes the loan, the original portion of your VA entitlement will still be used. You can only swap entitlement with another veteran.
If you plan to get a portion of the home's equity, she would need to pay you out or see of the lender will finance what is owed to you.
Also, depending on the amount of entitlement used for the loan, you may still have entitlement left that you could buy another home using VA (more than one VA loan at a time).
Do you know any mortgage lenders that do VA mortgage assumptions? USAA doesn’t unfortunately and I’ve looked around and most banks don’t allow it.
I don't believe USAA services their own loans. I believe all their underwriting and servicing goes to US Bank. Most banks should allow it and I'm surprised to hear you haven't had any luck. Banks may have stopped assumptions on existing low rate loans to get the loans off their books. The value of those loans has plummeted with rising interest rates.
I hope you've had some luck but if not, look into Loan Depot.
Your example is my exact scenario
Are you the buyer or the seller?
@@jasonskinroodmlo I’m the seller
@@markafletcher2042 once your sale finalizes and the buyer assumes your loan, please share with other veterans about your experience and any tips you may have.
@@markafletcher2042 Hey Mark. The seller and the buyer (me) are looking into doing something similar and the question I have is, after the assumption was made, were you able to free up your VA loan as the seller?
Hello Jason
What if the buyer defaults on the assumed loan? Am I on the hook? I live in Texas
Tim, your entitlement could be affected if your entitlement was still in use by the buyer and the lender makes a claim to the VA.
Hi Jason! Thank you for the video! Question: my husband and I are interested in assuming a loan from one of our fellow veteran friends. She owes $290,000 and is asking $320,000 and we have no problem paying her that in cash. But are VA loans eligible for a simple mortgage transfer to the seller/buyer’s discretion, or are they novation only? And how does that affect the extra $30k she’s asking for?
You'll need to be approved to assume the loan by the current servicer (lender). The additional would be paid to the seller at closing.
@@jasonskinroodmloas a buyer will we get to find out exactly how much they owe on the home before making a offer? Or can the realtor hide that?
@Greencloud8 you can get a rough estimate by looking at an amortization table for the amount of the original loan that uses their interest rate. It should show how much is remaining.
Hey Jason! Great video!
Can you elaborate of the VA funding fee?!
I read it as .5%
So if the house I’m trying to assume is selling for 550,000 with a balance of 494,000 would it be off the selling price or remaining balance. In addition I’d like to get my math correct would it be 24,700 as the fee amount
Lisa, the fee is 0.5% of the loan balance, making it $2,470. One percent of the loan balance would be $4,940.
@@jasonskinroodmlocan the va funding fee be rolled over to the existing loan?
@@JM-qj1sn I don't believe so, but that would be a question to ask the loan servicer (lender).
Hi Jason, thanks for this video. I've been trying to assume a VA loan as a non VA. I have not gotten anyone interested thus far and have some questions. If you or someone ever knows this I would much appreciate it!
I would like to know the following.
Assuming a great credit score, proof of funds, and 2 years of tax returns,
1) Can G-4 visa holders assume VA loans?
2) Can green card holders assume VA loans?
3) What is the limit to how many VA loans a person can have at the same time with either a G4 or GreenCard?
4) If after 1+ years of having the property a G4 or GreenCard holder wants to rent out the property, move out and assume another VA loan as a primary residence, is this okay?
5) Is there a limit to the number of times a person could do this?
Thank you in advance!!!
Agustin, I'm not sure if there are any limitations on green card holders. You could try calling the VA Regional Loan Center number and speak with a VA rep about guidelines. If you find a VA loan to assume, you'll also want to speak with the veteran's lender to confirm they don't have any restrictions either.
I am looking to have my current VA loan assumed.. there is some equity but do I have to sell up to that amount? For example, remaining mortgage is $250,000... appraisal says value is $350,000, so 100,000K difference. Can I sell at $300,000 or even down to $250,000 just to cover what's owed? OR must I sell for the full value?
You can sell at what is owed, market value or anything in between.
What state is your VA loan in? I'm a veteran looking to buy
@@johnnyb33good21 MN
I take it you already locked in come to Florida
I’m a vet. If I assume a VA loan, do I have to live in the property or can I rent it? Thanks.
Typically, a VA loan requires that you occupy the property, but it would be best to confirm with the lender before you begin the assumption process.
If I assume the loan example you had in your video, will my property taxes be reassessed to the 470k value or will I be able to keep the 380k assessed value and have lower property taxes?
Here is a good resource to answer your question - www.realtor.com/advice/sell/assessed-value-vs-market-value-difference/
Is there way to just assume the interest rate and not that actual loan?
Not that I'm aware of.
Do buyers still have to live in the property for a year before they can rent it out?
I'm not sure when you assume the loan. That would be a question to ask the lender or the VA directly.
Jason, What if the assumable load is $200K but you only need to borrow $100K?
Jim, you would still assume the full amount and then pay the $100k towards the principal to make the loan balance $100k. If the loan is fixed, you will not be able to reamortize the payment based on the $100k balance.
Is the full price the Appraisal price or the listing price?
Obviously, this is a great benefit with rates at the moment, but is the seller obliged to negotiate the list price?
Darren, the full price would be the agreed upon sales price between the buyer & seller. How much the seller or the buyer negotiates is up to them. There are opportunities to assume loans at really low rates, but with sellers often have so much equity that many buyers cannot pay the difference.
@@jasonskinroodmloI am going to see a house with a assumable VA loan tomorrow , the interest is what makes it very enticing , if all goes well paperwork wise and lender wise all I have to pay is the equity to the seller correct ? I could take out another small loan and it would still make sense numbers wise imo
@HEC892 that's correct. Any amount due above the loan amount is paid to the seller at closing.
Could I be qualified for a va assuming loan by contingent of selling my house and making a huge down payment and then immediately paying it off
@greencloud8 it would best to review your circumstances with the lender who currently has the loan you are wanting to assume.
Yo! Answer what every Veteran wants to know: if I sell my home via Assumable loan WHAT HAPPENS TO MY BENEFIT?
If the loan is not assumed by another veteran and their entitlement is substituted, it will reduce your available VA loan entitlement.
Can you assume a loan with a current VA loan?
You can assume a VA loan with the current lender's approval.
Hi Jason what if the home is already foreclosed and the VA owns it..then how could I buy?
Check VRM Properties online to find the home you are looking for. Their site is where the VA lists their real estate owned (REO) properties.
Check VRM Properties online to find the home you are looking for. Their site is where the VA lists their real estate owned (REO) properties.
Does this tie up your own VA loan guarantee until it’s paid off by the assumer?
It will tie up whatever you used for the loan someone else is assuming. You may have remaining entitlement that you could use to get another VA loan. If another veteran assumes your loan, they could substitute their entitlement to free up all of yours.
@@jasonskinroodmlo Do you have to pay the equity of the loan diffrence if another veteran assumes the loan. Basically no money down, whitch its the whiole poin t of the VA loan with no PMI.
@@CorporateMavarick for a loan assumption, the new buyer would have to pay the difference in cash or find a way to finance it, even if it's another veteran.
@@CorporateMavarick the buyer is responsible for paying the difference in equity. Even if the buyer is a veteran and is assuming another veteran's loan, they would have to pay the equity difference in cash or if they are able to find alternative financing.
@@jasonskinroodmlo Why cant they just sell the house at their equity zero point so no money has to be put down. So if the house worth is 300k with 150k in equity. sell for 450k. Then another VA loan can but it with no money down.
Who wants to buy my house looking to travel the world need someone to assume the loan crazy low rates as well as equity in my hand put a lot of work and care into the home let’s see who is interested in moving to the sunshine state 😊😊😊😊😊