Re: VA Liability & VA Entitlement Eligibility - Posted by JPiper
Posted by JPiper on December 23, 1998 at 10:31:44:
One of the possible objections from a seller via nonqualifying VA loans (or FHA for that matter) revolves around the issue of ongoing liability on the part of the seller. This is a legitimate concern.
Chances are high that this loan is not particularly attractive, and therefore may not be particularly attractive to assume if you have to qualify. VA has no streamline program to refinance with, so unless there is some specific reason unique to you that would make this loan desirable to assume, I wouldn’t pay the $400-$500 fee.
By the way, the assumption fee for a VA loan nonqualifying is $45, not $125.
Assuming a nonqualifyer takes a sales process, because of the ongoing liability issue. I have assumed many FHA NQA, and not one person ever asked me if I would like to assume it without qualification. If the fear is that you’re going to default, then you need to address that issue with them.
One of the common errors regarding VA loans is the issue of entitlement. Some people believe that if there is an outstanding VA loan in the name of the veteran, then he can’t get another one. This is NOT true. A veteran can get more than one VA loan assuming that he qualifies for all VA loans from an income standpoint. If he has an outstanding loan for $50K, and wants a new loan for $100K, both VA, he can do this assuming he qualifies for $150K in VA loans. The veteran can do this up to the VA limit assuming he qualifies. The limit is in the low $200K range as I recall. Any lender that tells you otherwise is misinformed (sometimes they adamantly believe otherwise).