Understanding Your VA Loan Entitlements – A Beginner’s Guide When you are applying for a VA Home Mortgage from a lender, it is important that you are aware of the benefits that you are entitled to. In most cases, it is seen that people don’t have a good deal of idea about some of the most important things about the VA Home Loan Guaranty Program. In the following post, we would be taking a look at one of the most commonly misunderstood terms for VA Loans – the VA Entitlement
What is the VA Entitlement? If one has to put it in the simplest words possible, then the VA Mortgage Entitlement can be defined as the maximum guarantee that the VA would be willing to give you. If you are applying for a VA Loan for the first time, then you would be having two entitlements – the basic entitlement and the bonus entitlement.
How much you are entitled to. The basic entitlement is $36,000 and the additional, or bonus entitlement is $68,250 (this might go up in certain high cost counties). Therefore, the total entitlement that you would have is $104,250. Now, this does not technically limit the amount of loan you would get but in most cases, you would be able to get a loan that is equal to 4 times the entitlement. The amount is around (104,250 x 4) = $ 417,000.
The use of Entitlements The best thing about VA Loan Entitlement is that you can use them in many different ways. For example, if you get a loan of $200,000, then you would be using only (200,000/4) = $50,000 of your entitlement. Therefore, you would be left with $104,250-$50,000 = $54,250 in your loan entitlement. You can use the entitlement to get another loan. Once you pay off a loan, the entitlement gets reinstated and you can use that to borrow another VA Loan. To know more about VA Home Loan, you need to get in touch with VA Loan Experts in your state.