VA Loan Assumptions- What You Should Know
If the house you bought came with a guaranteed mortgage loan from VA, it is not unlikely to find yourself needing to sell the property sometime in the foreseeable future.
Active duty military members who are in the process of having a permanent change of station, or perhaps those who just want to move to a larger house in a different location, would inevitably have to deal with the sale of the house they got before their VA loan is fully paid off.
When is a VA Loan Assumable?
There may be some cases where a VA loan is assumable, though. This means that the buyer can take over the VA loan whether he is a civilian or a member of the military. In the past, all houses purchased with a VA loan were recognized as assumable, but today that rule doesn’t apply completely.
Are you aware of the circumstances where a veteran is given permission to sell the house and let the seller take over the VA mortgage?
What About a Divorce?
If the situation is one where a veteran home owner gets a divorce, VA will allow what is commonly called an unrestricted transfer. Nevertheless, this is only applicable when the military spouse and the non-military partner happen to be co-borrowers. The VA mortgage can generally be assumed in cases like this, but to be on the safe side it is strongly advised that both parties fill out a release of liability so that the co-borrower who is leaving is not held responsible for any credit issues that may arise.
When having an unrestricted transfer, it must be noted that VA should be the one to approve the transaction and not the bank.
There are also cases when VA home loans may be assumed provided that the loan closed before March 1, 1988. In cases like this, the loan assumption is considered unrestricted – meaning the buyer is allowed to assume the VA loan without needing the approval of either the VA or the bank.
It is important to note, however, that the veteran still remains liable for any losses that may incur because of the loan assumption. To be on the safe side, it is best to contact the VA and get some advice on how you can protect yourself before giving your consent on this kind of sale.
If you are considering a VA loan, contact a VA loan specialist to get the details on your particular situation. There has never been a better time to get a VA loan. Use VALoanNetwork’s 1-minute quote form to get started on your loan today.
VA Loan Assumption – What Veterans Need to know | VA refinance rate | VA streamline refinance | Veteran mortgage
