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Questions about first time home buying and VA Loans?

My husband and I are looking to use his VA loan to purchase a home. We were approved for the amount of the house, but we have a few questions.

As the mortgage payment on the home would be about 200 more than our current rent payment, we need to tie some loose ends elsewhere to make up the difference in our budget. We have a loan for 4000, and furniture financed currently through Ashley furniture with a balance of 2500. If we were able to borrow the extra 6500 to pay those items off, thus meaning we would no longer have those 2 bills coming out, that would make up for the 200 difference in price, and we could very easily manage the mortgage payment. So, is it possible to borrow slightly more? The house is worth approximately 190k, asking price is 160k. So we still wouldn't be exceeding the home value itself. However, I've read that only extra money for renovations is allowed, not for other things. But I've also heard that you CAN in fact borrow slightly more, as long as it doesn't exceed a certain percentage of the home's value. Obviously, we've never purchased a house before in this sense. We owned a singlewide when we were 18, but thats a lot simpler when you're paying cash out right for something than it is when you're financing for 30+ years. ANY information would be very awesome!! Thank you in advance!

Update:

Just adding:

Price does include taxes and insurance.

So VA Loan would not work in this case, but would another finance option allow for no downpayment as a VA loan does?

Utilities, travel, and extra expenses or savings involved with moving have been considered as well, and where we'll save a lot in some areas and spend a bit extra in others, it pretty much balances out.

Hate the idea of wasting money on rent if buying is a feasible option.

6 Answers

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  • 5 years ago

    Borrowing from Adam to pay Eve is a bad idea, especially if it involves interest. All you would be doing is a lateral move. If you have been paying Ashley regularly, the lender will not care that you have a debt. The ones they care about that would need to be paid off are those that are not being paid on, that are of public record/sent to collections, liens, etc. Obtaining a higher loan amount to pay off Ashley would only be a good idea if Ashley's interest rate is very high. I know VA loans for a house offer very low interest rates, better than the average person so, that might be a good idea but, considering everything, it may not be. I cannot tell unless I look at the figures, which you can do. Perhaps, increase the loan by just $5k. It will make a minimal impact to the loan yet, will put you in a much better position with Ashley, allowing you to pay it off rather soon.

    Source(s): Certified Paralegal, with 25+ years' experience & Refinancing experience.
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  • glenn
    Lv 7
    5 years ago

    When I bought my first house back in 1978 (on a VA loan) the payment was $425 including the escrow for property taxes and hazard insurance. That was much more than our apartment rent of $235 a month at the time. We buckled down and lived very tight for a while. Our VA payment was fixed. If we had stayed there that VA loan would be paid off by now but now we live in a much bigger and more expensive house and have a payment of 1300 a month (we put a lot down because we had built up a big equity by owning a house rather than renting). My grown daughter tells me that local small apartments run close to the 1300 a month now.

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  • Mutt
    Lv 7
    5 years ago

    Here's the thing - You borrow $6500 to pay off your current bills, you will then have $6500 to pay back. You're not actually reducing your debt - You're just shuffling it from one (or more) place to another.

    I would recommend that you take a few months first to pay these items off, then look for a home. What's nice about a VA loan is that there is no down payment, and some of the closing costs can be rolled into the loan.

    "Price does include taxes and insurance." - No, it probably does not. Those are not part of the loan, but will be part of your monthly payment. Your payments you make are split up to 4 different areas - The principal of the loan, the interest for the loan, and then the insurance and tax, both of which is put into escrow and the bank pays when they are due.

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  • 5 years ago

    Go & get pre-approved. But you're not going to get a loan for more than a place is worth (or your loan amount). Taxes & insurance will add 1/4 - 1/3 more $$$ to your payment. Do you have 5 - 10% for the down payment, as well as another 5 - 6 thousand for closing costs??

    Based on what you've written, doesn't sound to me like you're ready to buy a house.

    I have a VA loan.

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  • Rob
    Lv 7
    5 years ago

    no u can't borrow more than selling price for VA loan.

    if mortgage is 200 over rent can u actually afford

    to get a mortgage.

    does that payment include Taxes, insurance etc.

    do u have enough in budget to afford higher gas water

    electric bills with out second jobs?

    go to library for "house buying for dummies" to learn

    least u get burned.

    VA loans are higher priced than conventional in most

    aspects/places.

    contact mortgage brokers for better deals b4 u pay.

    Source(s): foreclosure buyer
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  • Bob
    Lv 7
    5 years ago

    You MIGHT be able to borrow more but you are very close already very close to the limit now. Ask the mortgage broker and see what they say.

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