If you are a VA eligible borrower you may want to take advantage of today’s incredible home prices in California and rent out your current primary residence and buy a new home to live in with a 100% financing VA loan. Remember, if you currently have a VA loan on your current home, you can’t get a second VA loan until that current VA loan is paid off. But if you do not have a VA loan and you are eligible for VA lending, what a great opportunity to use your VA benefits and buy a home with 100% financing at today’s bargain prices in California.
Here’s how it works. VA lending guidelines are very special in that they allow the VA borrower to use a lease on their current home to offset the housing payment to qualify VA loan. So if you current house payment is $2,500/mo and you can lease it up for $2,000, generally you can use 90% of that $2,000/mo lease amount to offset the $2,500 housing debt. And it will have to make sense to the VA underwriter that you plan to live in the new house. If you are moving from a very large house to a very small house they may question that. Or if you are moving further away from work they may question that. It has to make sense.
FHA loans and conventional loans are much more stringent. If a borrower wants to rent out their current home to buy a new home, they must have at least 25% equity in the home in order to count the proposed rent to help qualify for the new loan. So basically, unless they have 25% equity, they must qualify for the new FHA or conventional loan with BOTH housing payments. This is very difficult for most. But VA borrowers are very lucky in that VA does not have this 25% equity rule.
So take advantage of today’s low prices in California and get a California VA home loan on a new house you plan to occupy.
Some great advantages of VA loans:
- Maximum VA loans and jumbo VA loan up to $962,500 in the San Francisco Bay Area Counties, $593,750 Los Angeles, $437,500 San Diego, $593,750 Orange County (feel free to call for your county limit)
- VA loan credit score can be as low as 600 for 100% financing, you don’t need perfect credit
- VA loan interest rates for 30 year fixed loans STILL at historic lows
- VA lending has the most generous debt-to-income ratios – VA loans can allow upwards of 55% ratios where conventional with <20% down is 41% with min 720 credit
- Second VA loan (and third, fourth, etc…) available if you have paid off your first VA loan
- 100% financing on VA loans and the seller can pay all your closing costs, so you can buy with almost zero out of pocket
Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions or want to apply for a VA loan.
Warmest Regards,
Rob Chomentowski
Sr. Loan Officer (and VA specialist)
858-922-7899
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