VA Loan Purchasing: What About Restoration Of Entitlement

There are certain conditions in which a veteran who has previously purchased a home using a VA home loan, can take their previously used entitlement and actually have it restored to its original amount.  This is what restoration of entitlement is all about.  It allows veterans to purchase another home.

Of course, to reap the benefits of this provision, one or the other of the following required conditions must be met.  First, the property that was bought with the previous VA loan must already be sold and the loan should be paid in full.  Second, the buyer (also called a qualified veteran-transferee) agrees to assume the remaining balance on the previous VA loan.  This buyer will then substitute his or her entitlement for the same amount of entitlement that was used by the seller.

Restoration of entitlement can be granted only once.  The veteran must have already paid the loan in full.

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What Are Fees That Must Be Authorized By The VA?

Often, when you have a VA home loan there are other fees that may be charged, but which must be authorized by the VA to become applicable.  It is the lender that will contact the local VA office seeking approval of these additional fees, which may be included among the closing costs.  They may be assessed if they are typically paid the borrower in certain areas or jurisdictions or if they are considered reasonable and customary in the same district.

Take a look at the following fees, many of which that will be covered by the lender if not approved by the VA:

• document preparation fees
• preparing loan papers
• attorneys services other than for title work
• photographs
• interest rate lock-in fees
• postage and other mailing charges
• stationery
• telephone calls
• amortization schedules
• escrow fees or charges
• notary fees
• trustee's fees or charges
• loan application or processing fees
• charges by loan brokers
• tax service fees

It is also possible that these fees can be incorporated with other closing costs into the cost of the loan and then paid by the seller.  There is some room for negotiation in these matters, so it might be helpful to consult the real estate agent or even the lender when deal with this stage of the transaction.

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Wartime And Peacetime Eligibility Differences For VA Loans

What are some more exact requirements for eligibility for those veterans who are interested in obtaining home financing assistance from the Veterans Administration?  Briefly, a veteran is eligible for VA home loan benefits if he or she served on active duty in any of the following branches of the armed forces: Army, Navy, Air Force, Marine Corps, or Coast Guard.  Furthermore, you must also have been discharged under any conditions other than dishonorable after a certain time period.

These time periods are based upon whether you served during wartime or peacetime.  For those veterans who served during wartime, the timeframe for eligibility is 90 days or more.  If the veteran served during peacetime, the amount of days for eligibility is 181 continuous days or more.

Specific periods of wartime and peacetime that are covered under the provision of the VA's General Rule for Eligibility, include the following periods of time:

Wartime - World War II: 9/16/40-7/25/47; Korean conflict: 6/27/50-1/31/55; Vietnam era: 8/5/64-5/7/75; Persian Gulf War: 8/2/90 – undetermined

Peacetime - Post-World War II period: 7/26/47-6/26/50; Post-Korean period
2/1/55-8/4/64; Post-Vietnam period: 5/8/75-8/1/90

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Six Reasons To Get A VA Loan

If are a military veteran there are some benefits available to you in the realm of financing.  One of the major ones happens to be the Veterans Administration Loan.  In fact, there are six reasons that you might want to consider obtaining a VA loan to finance your home buying or building plan.

The first reason most turn to these types of loans is the same as any home loan: you want to buy a house but lack the funds to do it.  Then there are those people who would like to build their own homes from the ground up.  A VA loan can be a great resource.  If you already have a home but would like to make improvements—especially those that have to do with energy conservation—you can be approved for these purposes.  These types of improvements may include adding heating/cooling systems, insulation, weather-stripping, as well as storm windows or doors.

A four reason might involve using a VA loan to refinance an existing mortgage loan.  It is possible to refinance up to 90% of the reasonable value and drastically reduce the interest rate.  Other homeowners may decide that they want buy a new home but they would like to make improvements to their old one so it will get a better resale value.  A sixth and final reason to consider a VA loan is the fact that you can purchase townhouses or condominiums that are part of VA approved project sites.

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