VA Assumable - Posted by DaveG


#1

Posted by JPiper on December 24, 1998 at 11:22:05:

There is a release of liability for either VA or FHA. However this will not be given unless the borrower formally qualifies with the lender.

The assumption fee is $45 for VA, $125 for FHA…on simple assumptions.

JPiper


#2

VA Assumable - Posted by DaveG

Posted by DaveG on December 22, 1998 at 21:26:02:

Hi,
Just to confirm, to assume a VA loan made in 1987 one doesnt
have to be a vet does one?
thanks
Dave


#3

Re: VA Assumable - Posted by JPiper

Posted by JPiper on December 23, 1998 at 01:48:31:

You don’t have to be a veteran to assume any VA loan…regardless of year. By the way, VA loans originated prior to March 1, 1988 are nonqualifying.

JPiper


#4

VA Liability & VA Entitlement Eligibility - Posted by Walt (FL)

Posted by Walt (FL) on December 23, 1998 at 08:22:56:

Hi,

It seems my 1st simple NQA VA is not quite that simple. Seller wants to get previous owner released from liability and restore his benefits (It appears that he substituted his eligibilty and wants to be released from loan).

I do not fully understand the ramifications but know that it will be more costly for sure, whereas I was looking to get in light. Also I do not know how this will change the make-up of the loan, will it still be NQA? This seems important when ready to sell.

Is this a common scenario or just my Luck to learn another gem? The Source One loan person said that she would send an Assumption Package When they received a copy of the Purchase agreement and Approx. $400 in fees vs. $125 for a “standard?” NQA.

The seller seems adamant about removing previous seller and current owners from “liability”. It seems that seller is abiding by previous owners wish. Anyone else come across this situation and understand the details of this type transaction? It wasn’t the greatest deal but a good starter

Thanks,

Walt (FL)


#5

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).

JPiper


#6

Re: VA Liability & VA Entitlement Eligibility - Posted by John Katitus

Posted by John Katitus on December 24, 1998 at 24:13:41:

There might be some information overlap between VA and FHA NQA loans causing confusion. The one FHA NQA simple assumption I did, did have some type of “Release of Liability” form associated with it (not as part of the assumption package, but it was required to fully release the original mortgagor from liability). Also, I believe the assumption transaction cost $125.