That’s not the secret I’m referring to though, even though many don’t know that is the case. What so many more don’t know, including lenders, is that veterans can have two VA loans at once. It’s called “2nd Tier Entitlement”. The main point to keep in mind if you are looking to qualify for a 2nd VA loan while all or a portion of your basic entitlement is being used, is this – Your 2nd VA loan MUST be more than $144,000.

You probably want to know how figure the maximum VA loan amount should you have a VA loan already, right?

Lenders that truly know how to calculate this number will give you a calculation that might make your head spin. At the very least it should have the same affect as a sleeping pill. It would probably look like this:

zzzzzzzz…….

I actually grabbed that calc from another post to show the example. Now, if I do a reverse calculation, I can find out what the actual original loan amount was on the current home:

$36,000 (basic entitlement) – $21,853 (the assumed remaining entitlement) = $14,147 (actual entitlement used) x 4 = $56,588 (the original VA loan amount on the current home)

You’re probably asking, why would you do that? What purpose would that serve?

Because there is a more TOP SECRET, secret to knowing how to calculate the maximum VA loan if you already have a VA loan…or even if you may have foreclosed on a VA loan and never restored the entitlement. It is absolutely amazing that even the smartest VA Loan Specialists that want to throw the mind-numbing guaranty/entitlement calculation at you, don’t even know this. In fact, even the smartest VA Specialists have used the same calculation above, and because of its complexity, have come back with an erroneous answer.

So imagine, you’re trying to buy a house and have gone almost all the way through the process. You’ve signed the purchase contract, put a huge earnest money deposit down, paid for an appraisal and the loan just went to underwriting. The whole time you’ve put your life in the hands of this seemingly too-smart-for-school VA “Specialist” and believed that s/he has calculated the maximum 2nd tier entitlement correctly. Then the bomb drops. The calculation was off. Now you have to bring an extra $5,600 to the table that you hadn’t budgeted for or simply don’t have.

That’s not a position I would expect any veterans want to be put into. In fact, pretty much all veterans and current military have higher standards than that and expectations that their VA Specialist delivers exactly what they promise with no surprises.

That’s why the more error-free (and Top Secret) solution should always be used….

I bet the curiosity level is pretty high right now. Unfortunately, I’m going to keep it Top Secret. However, if you are a veteran or currently on active duty and are wanting to have 2 VA loans at the same time, and you want to know what the Top Secret calculation is or just want to be sure you have a VA Specialist that knows how to use the calculation correctly to calculate (every time), the maximum 2nd Tier VA loan amount, I will point you in the right direction.

TOP SECRET 2ND TIER MAX LOAN AMOUNT CALCULATION HERE>>>

VA home loan useful, but watch for snags

For eligible service members and veterans, the Veterans Affairs Department’s home loan guarantee program can be a curse or blessing in today’s housing market. Among the advantages:

• It is among the few mortgage programs now available that does not require a down payment.

• In most locations, lenders will allow purchases of a home worth up to $417,000 without a down payment — and more than $1 million in some high-cost areas.

• Credit underwriting is a little easier with VA loans than with other mortgages. A buyer’s credit scores don’t have to be as high, and loans are possible with as few as six months of work history — not the minimum two years required for most mortgages.

• An inspection of the home is required to ensure it is safe and livable, which provides extra protection for first-time buyers.

But there are disadvantages:

• Not all lenders are willing to work with VA loans.

• A percentage of the loan fee (funding fee), charged by VA to offset the risk of having no mortgage insurance, could be wrapped into the mortgage, ranging from 0 percent for veterans with a service connected disability to 3.3 percent for second time or more use. I corrected this from the original post.

• There are limits on what fees can be charged to the buyer at closing; some sellers don’t want to be part of a sale that could force them to pay more closing costs.  This becomes a non-factor when a veteran works with a VA lender that charges Zero fees.

• A strict home inspection and appraisal process often can make it impossible to buy a home “as is.” If the seller won’t agree to repairs, either done in advance of settlement or by putting money into an escrow account, a VA loan may not be approved. Of course, this should be in the advantage category really, as it is there to protect the veteran from purchasing a “lemon” or “money pit” home that could cost thousands. Conventional loans don’t have this kind of protection. I personally found out the hard way when I got a conventional loan to purchase my house and since have put in THOUSANDS of dollars in repairs that the inspector my realtor recommended didn’t catch. I’ll talk more about this in a separate post.

• Many sellers and their agents believe VA loans involve more red tape than other loans. Many sellers and agents don’t understand VA loans either. This is up to your lender to step in and help them understand the steps involved and relieve them of the mis-guided anxiety they may feel. VA loans should take no longer than a conventional loan if you have the right VA lender working for you.

• Generally, VA home loans are more likely to be accepted in housing markets where troops, veterans and military retirees are a sizable part of the market. This seems like a very one sided comment. It is true but I’m not sure where I see this as a disadvantage…. or an advantage. VA loans are accepted throughout the country, regardless of demographics. Just make sure if you are building a home, you are working with a reputable builder that is approved by VA. Again, I’ll talk more about this in a separate post.