Fast Track Your Move with VA Simultaneous Home Closings

VA Simultaneous Home Closings with No Overlays: 2024 Guide to Buying Your Next Home

Are you considering buying a new home with a VA loan while selling your current one? Simultaneous closings, where you close on both homes on the same day, can help make that transition easier. But the process can be complex, especially if your financing relies on selling your current property.

This guide will walk you through how VA simultaneous home closings work, the challenges you might face, and how choosing the right lender can be the difference between closing on time or missing out on your dream home.

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Why Consider VA Simultaneous Home Closings?

Many VA loan borrowers need the funds from selling their current home to buy their next one. Simultaneous closings make this possible by allowing the sale of your old home and the purchase of your new one on the same day, so you don’t have to worry about finding temporary housing or managing two mortgages. Here’s how it works and what you need to know to make it happen in 2024. Speak With Our Loan Officer for Mortgage Loans

How VA Simultaneous Home Closings Work

Simultaneous home closings are a “chain process.” Here’s what that looks like in a typical scenario:

You close on selling your current home and collect the proceeds you need for a down payment.
You use those proceeds to buy your next home that same day.
All parties, including real estate agents, lenders, title companies, and attorneys, work together to coordinate both closings seamlessly.

Benefits of VA Simultaneous Closings

For VA borrowers, simultaneous closings offer several advantages:

No Need for Temporary Housing: Move directly from your old home to your new one.
Avoid Double Payments: You won’t have to cover two mortgages, which can be financially challenging.
Easier Down Payment: The proceeds from your home sale can be applied directly toward your new home’s down payment.

This process requires all parties to be on the same page, so clear communication with everyone involved—your lender, real estate agents, and title companies—is critical.

Updated Requirements for VA Simultaneous Home Closings in 2024

The VA loan program doesn’t generally allow simultaneous financing on multiple homes unless they meet occupancy requirements and other eligibility criteria. Here’s a look at the 2024 updates:

Occupancy Requirement: VA loans require that you intend to live in the property as your primary residence, so purchasing multiple homes with VA loans isn’t typical unless you’re refinancing a VA loan while selling and buying.
Entitlement Management: The VA has entitlement limits that could affect how much you can borrow. Speak with a VA lender about restoring entitlement from your old home to use it for your new one.
Eligibility Check: Your VA loan eligibility may be affected by other mortgages. Confirm with your lender if your remaining entitlement covers the new loan amount.

Speak With Our Loan Officer for VA Loans

VA Bridge Loans for Homebuyers Needing Down Payment Assistance

A big hurdle for many homebuyers is coming up with the down payment, especially if they’re relying on the sale of their current home. To make things easier, some lenders, like Gustan Cho Associates, offer a bridge loan to cover your down payment until your old home sells. Here’s how it works:

Short-Term Second Mortgage: Gustan Cho Associates offers a short-term bridge loan of up to 85% loan-to-value (LTV) on your current property, allowing you to use these funds toward your new home purchase.
Equity Requirement: This option is only available if you have enough equity in your current home to meet the lender’s criteria.
90-Day Timeline: The bridge loan typically covers a 90-day period, which aligns with the expected closing timeframe on your old home.

A bridge loan allows you to make an attractive offer on your new home without a “sale contingency,” which often deters sellers.

Real-Life Scenario: How VA Simultaneous Home Closings Work

Let’s look at a real case from Gustan Cho Associates to illustrate how this process works.

Case Study: Eric’s VA Simultaneous Closing Success

Eric, a VA borrower with a 580 credit score, wanted to sell his current home and purchase a new one for his family. He planned to use $40,000 from his home sale as a down payment on his new home.

Here’s what happened:

Initial Approval: Eric’s VA loan was approved, and he was scheduled to close on both homes on the same day.
Unexpected Setback: Two weeks before closing, the buyer of Eric’s old home financed a new car, which disqualified him from buying Eric’s property. This left Eric in a tough position.
Quick Solutions: Working with his lender, Eric was presented with three options:
- Find a new buyer.
- Convert his current home into a rental to use the rental income toward his debt-to-income (DTI) ratio.
- Qualify for both mortgages simultaneously.

After weighing his options, Eric’s lender decided to re-pull his credit and see if he qualified to carry both mortgages. With a few adjustments, including paying off credit cards and removing a collection, Eric’s credit score jumped to 667, and he was able to secure AUS (Automated Underwriting System) approval.

Eric’s success demonstrates how working with a knowledgeable lender can help overcome unexpected issues in simultaneous closings. Connect With Our Loan Officer for Mortgage Loans

How to Prepare for a VA Simultaneous Closing in 2024

1. Notify Your Lender of Your Intentions Early

Your lender must know if you’re planning a simultaneous closing. Letting them know upfront can make a big difference, as they’ll need to coordinate both transactions with your real estate agents and the title company.

2. Ensure Your Finances Are in Order

When assessing VA loans, lenders pay special attention to your debt-to-income ratio (DTI). Here are some steps you can take to make sure you meet the qualifications:

Avoid New Debt: Don’t take on new debt, such as a car loan, during home-buying. This could disqualify you from your new mortgage.
Boost Your Credit Score: Pay down credit cards and ensure you’re current on all bills. This can increase your score, which may help if you carry two mortgages.
Have Cash on Hand: Having some additional funds can assist in managing unforeseen costs or deficits, even when using VA loans.

3. Get a Clear Understanding of the VA Loan Process

VA loans offer significant benefits, but they also have specific guidelines. Here’s what you need to know:

Entitlement Restoration: If your current VA loan isn’t paid off, you must restore your entitlement to use it on your next home.
Manual Underwriting vs. AUS: If you have a lower credit score, your loan may go through manual underwriting, which requires stricter DTI limits. Otherwise, AUS approval can provide more flexibility.

Why Choose a Lender with No Overlays?

For a smoother experience, choose a lender that follows VA guidelines without adding overlays—extra conditions that some lenders require on top of VA rules.

Gustan Cho Associates, for example, offers zero overlays on VA loans, which means they only follow VA requirements, helping more borrowers qualify. Many lenders won’t re-pull credit reports during the loan process, but at Gustan Cho Associates, they will if it can help you qualify.

Overcoming Challenges with Simultaneous Closings

Simultaneous closings can be challenging if any part of the process goes off-track. Here’s what to watch out for:

Buyer Financing Issues: If your buyer’s loan falls through, you may need to find a new buyer quickly or temporarily carry two mortgages.
Delayed Appraisals or Inspections: Ensure your appraisal and inspection are scheduled early to avoid delays.
Unexpected Expenses: Keep an emergency fund for any last-minute costs or adjustments in your closing amount.

Working with a flexible, knowledgeable lender helps to navigate these potential roadblocks.

Final Tips for a Smooth VA Simultaneous Closing

Have a Backup Plan: Be prepared for any last-minute changes, such as the need to rent out your old property if it doesn’t sell immediately.
Coordinate Closely with Your Team: Your realtor, lender, and title company should all be aware of your plan and ready to work together.
Stay On Top of Deadlines: Complete each required step well in advance. Meeting deadlines can help avoid delays in the closing process.

Why Gustan Cho Associates?

At Gustan Cho Associates, more than 75% of our clients seek our help after encountering challenges with other lenders. Our zero-overlay policy on VA loans means we only follow VA guidelines without adding extra requirements that can hold up or derail a loan. Here are some additional benefits:

Expert Knowledge in VA Loans: Our team knows VA guidelines inside out and can guide you through the complexities of simultaneous closings.
Flexible Credit Score Requirements: We work with clients who may not have perfect credit, giving them a better chance of success.
Timely, Efficient Service: We recognize that timing is crucial in real estate. We guarantee that our clients can complete transactions on schedule by providing prompt responses and adaptable underwriting.

Ready for a Seamless VA Simultaneous Closing?

If you’re planning a VA simultaneous closing, you want a lender with experience, flexibility, and a team ready to work on your behalf. Gustan Cho Associates is here to make it happen. From bridge loans to no overlays on VA loans, our team offers tailored solutions to help you buy your dream home without unnecessary delays.

Contact Gustan Cho Associates today and let us help you easily navigate VA simultaneous home closings. Don’t allow financing to hinder your next step—reach out today to begin your path toward a seamless and successful home closing. Speak With Our Loan Officer for Mortgage Loans

Frequently Asked Questions About VA Simultaneous Home Closings:

Q: What are VA Simultaneous Home Closings?

A: VA simultaneous home closings mean closing on both the sale of your current home and the purchase of your new home on the same day. This allows you to use the proceeds from your sale immediately for the down payment on your new VA-backed home.

Q: How do VA Simultaneous Home Closings Work?

A: You close on your current home first, collecting the proceeds. Then, the funds are immediately applied to your new home purchase, which closes the same day. This process requires coordination with all involved parties, including your lender, title company, and real estate agents.

Q: What are the Benefits of VA Simultaneous Home Closings?

A: This approach avoids temporary housing, saves you from managing two mortgages, and allows you to directly apply the sale proceeds to your new home’s down payment. It simplifies the transition to your next home without unnecessary financial strain.

Q: Do VA Simultaneous Home Closings Require a Specific Credit Score?

A: Generally, VA loans don’t have strict credit score requirements, but many lenders impose “overlays” that set a minimum score. Lenders like Gustan Cho Associates, with no overlays, only follow VA guidelines, making it easier for you to qualify even if your credit isn’t perfect.

Q: Can I Get a Bridge Loan for VA Simultaneous Home Closings?

A: Yes, some lenders offer a short-term bridge loan to help with the down payment until your current home sells. This loan, available for up to 85% of your home’s value, provides the necessary funds for your new home purchase without waiting for the sale to close.

Q: What Challenges Might I Face with VA Simultaneous Home Closings?

A: Common challenges include the buyer’s financing falling through, delayed appraisals or inspections, and unexpected costs. Having a lender familiar with VA loans and simultaneous closings can help address these issues quickly.

Q: What Happens if My Buyer’s Loan Falls Through During a VA Simultaneous Home Closing?

A: If your buyer’s loan falls through, you may need to find a new buyer, rent out your old home temporarily, or carry both mortgages until you find a solution. Your lender can help explore options based on your financial situation.

Q: Do VA Simultaneous Home Closings Affect My Entitlement?

A: Yes, if your current home has a VA loan, you’ll need to restore your entitlement to use it for the new home. This process varies depending on your loan balance. So, check with your lender on managing entitlement for VA simultaneous home closings.

Q: How Early Should I Start Planning for VA Simultaneous Home Closings?

A: Ideally, you should start planning as soon as you know you’ll need to close both homes on the same day. Notify your lender, and ensure your finances and team are ready to avoid delays in the closing process.

Q: Why Choose a Lender with no Overlays for VA Simultaneous Home Closings?

A: Lenders without overlays, like Gustan Cho Associates, follow VA guidelines without extra conditions, making qualifying easier. This is especially helpful if you need credit re-pulled or your debt-to-income ratio re-evaluated to handle both mortgages.