Posted by Dave T on December 02, 1999 at 22:42:33:
Approval of the assumption of a VA loan made on or after March 1, 1988, must first be obtained from the lender (institution servicing the loan), and then VA will process the substitution of entitlement. The purchaser must go through the same loan qualification process as for a new loan.
There will be a closing at which deed will pass, and the VA will charge a nominal assumption fee. Suggest you contact a lender in your area designated as providing VA Vendee Financing for more specific detail on assumption fees and settlement costs.
My realtor buddy told me of her client who has a VA loan and has been transfered out of state and just wants rid of the house and for that person to cover her fee.
Great house, great neighborhood. Owe $89,000 and comps at $115,000. Maybe $300 needs to be done to the house and that’s it. No bites on the house because of time of year and they are having trouble making payments. Well seems like perfect lease option, but I wanted to push to see if they would just deed me the house if I paid the realtor.
Here’s the deal. They want the entitlement back to get another VA loan. Is the only way they can get that is to have it totlly paid off??? If so, is it possible to get an interest only loan with a 2 year balloon…has anyone done that or is it commom and I just don’t know. That way I could put a T/B in there and reap the benefits within a year and the seller would be clear???
Any suggestions you guys have is really appreciated.
Posted by MCbroker on December 03, 1999 at 06:30:27:
An interest only short term loan maybe a little difficult to obtain. Usually the “hard moey” guys limit their loans to 65% of Value. Looks like you would need about 80% loan (including closing costs).
Is there a way to finance with no money down - Yes. As a NOO (non owner occupied) it may be a little more difficult but here is a scenario -. Loans are based almost always on the lower of the selling price (89K) and the appraised value (115K). One way to get in 0 down and in some cases w/ cash out at close is to combine a new 1st and 2nd mortgage. Ex. Let say you need 92k. A first mortgage of 73.6k would be fairly easy to obtain from a nonconforming lender. The remainder can be from a 100% Cltv 2nd for 18.4k. Viola - your in for 0 down. Note: the first lender has to allow a 100% CLTV (combined Loan to Value)which is not difficult to find. Good Luck - mortgage broker in FLA.
Re: Need Advice on VA loan/lease option/subject to - Posted by Dave T
Posted by Dave T on December 02, 1999 at 17:00:45:
There are two ways I know for a VA loan entitlement to be reinstated. First, pay off existing VA loan. Second get a buyer to substitute his or her entitlement and assume the existing loan.
You state that your seller wants to use the VA loan guarantee program again to buy another home. The answer to your questions depends upon whether your seller will be willing to wait one or two years for their loan entitlement to be reinstated. Once you know that answer, you can plan alternative courses of action within the seller’s time constraints.
Thanks for your quick response. Just one more question, can my friend who has a VA entitlement assume
this loan with an easy process, or is there still a typical closing, with all the costs involved in it?