Question about VA mortgages

[TastesLikeChicken]

The wife and I are in the process of relocating. We have a VA loan on the current house (which was listed last Friday, received nearly a full-price offer on Saturday, and now has a contract) and want to go VA on the next place because it provides the best interest rate. The mortgage broker informed me that a VA loan has to be closed out before the VA entitlement can be restored for the next loan, and that the process takes 2 or 3 days. I spoke with the listing agent about it and she said she'd never heard of such a thing. She said she has handled many VA loan closings and that they do what's called a simultaneous closing.

Obviously one or the other is pulling my leg or stretching the truth a bit. Are there any mortgage brokers here, or anyone that has gone through the experience, who can shed some light on the facts?

 

[TreyRandom]

I've gone through the experience several times - I'm on my third VA mortgage. Each time, during the loan approval process, I had to do the VA mortgage paperwork. The new VA guarantee was contingent on paying off my existing mortgage, because you can't hold two VA mortgages simultaneously... but if you close on the house you sell right before you close on the house you buy, there's no problem. At least, it's been no problem when I did it in 2003 (1st to 2nd house) and 2006 (2nd to 3rd house).

 

[TastesLikeChicken]

Did you close on the same day each time or was there a day or two between closings?

 

[cuafpr]

you can close at the same time.... or depending on the price of each house close whenever . I knew of people that got a second house when the PCSed b.c they had enough of thier VA loan amount to cover the new house in full while the first was still on the market. That was a 5+ years ago so maybe things changed.

 

[TreyRandom]

Did you close on the same day each time or was there a day or two between closings?

Simultaneously the first time, but I got the VA paperwork done on the second one long before closing. As long as you are closing your existing VA mortgage, your second one will be guaranteed, and there should be no problem. It shouldn't take "2 to 3 days", because that VA paperwork should be getting processed by the VA now, BEFORE you close on the sale of your house... not AFTER you close.