What happens to a veteran's VA loan entitlement when they sell their home and pay off the VA loan?
Correct Answer
B) The entitlement is automatically restored for future use
When a veteran sells their home and pays off the VA loan in full, their entitlement is automatically restored and can be used again for future VA loan purchases without limitation.
Why This Is the Correct Answer
When a veteran sells their home and pays off the VA loan in full, their entitlement is automatically restored and can be used again for future VA loan purchases without limitation.
More Mortgage Knowledge Questions
A borrower is comparing two loan offers: Loan A has no points and 4.5% interest rate, Loan B has 2 points and 4.0% interest rate. The loan amount is $400,000. How much will the borrower pay upfront for the points on Loan B?
A lender charges a 1% origination fee on all loans. For a borrower obtaining a $250,000 mortgage, what is the maximum origination fee that can be charged without violating the points and fees test under the ATR/QM rule for a first-lien mortgage?
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A borrower is considering paying discount points to reduce their interest rate. Each point costs 1% of the loan amount and reduces the rate by 0.25%. On a $300,000 loan, how much would the borrower pay for 2 discount points?
A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
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