VA Loan Basic Entitlement: Everything You Need to Know

Apr 1, 2020 | VA Loans

VA Loan Basic Entitlement: Everything You Need to Know

For veterans and current members of the armed forces, using a VA loan to buy a house is a great way to get into a great house without dealing with down payments and overly high interest rates. 

The loan application process works similarly to traditional home mortgages, but there are a few key differences. The amount of a loan that you’ll qualify for largely depends on the amount of entitlement you have. Here’s what you need to know about basic entitlement and how it impacts your loan application.

The Basics of Basic Entitlement

VA loan entitlement is something you earn from serving in the military. The amount is fixed and doesn’t change from year to year. Even better, it never goes away and there’s no expiration date to the benefit. You’re free to use your entitlement throughout your life.

The amount of the entitlement typically comes to 25 percent of the loan’s principal or $36,000. If you’re thinking that this means you’re only going to qualify for a loan of $144,000, don’t panic. The entitlement amount doesn’t determine the maximum loan you can apply for or receive. In fact, in 2020, the maximum VA loan amount increased across the country to over $500,000. The exact maximum varies based on where you’re located. This means your overall entitlement amount changes as well based on where you live.

Your Available Entitlement Can Change

You’re considered to be using your entitlement anytime you use a VA loan to buy a house. You’re free to apply for and use VA loans to buy homes throughout your life, but you need to make sure your entitlement gets restored before you apply for another loan. This will help you get the largest loan possible so you can buy the right home for your needs.

If you have a loan on a property, you may not be able to borrow as much as you’d like to buy another house. Once you sell that property or pay the loan off in full, you’ll be able to regain your full amount of basic entitlement and can use that to apply for another loan.

Ready to Apply for a VA Loan?

As a veteran, you’re entitled to a VA loan. Use it to buy your next home and spare yourself the frustration of coming up with a down payment or paying overly high interest rates. If you’re ready to explore your options, apply online today.

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