re: Buying new home while owning a home using VA loan

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If your current home has a VA loan and you are selling it and plan to purchase the next one using VA, you have to sell (close) your current home first or you will have a reduced VA guarantee amount for the second home. Where I live the VA guarantee amt is $548,250.00

The way the guarantee works is: If you primary home is under that limit, than you can purchase the home for no money down, but have to pay a VA funding fee (2.3% first time use / 3.6% subsequent times in addition to loan processing fees, unless of course you have already retired and have a disability rating, in that even it is ZERO% VA funding fee.

If you have a reduced VA guarantee (remainder between original VA loan and guarantee) or purchasing a new home that exceed your limit, you will be responsible for 25% of the difference between your va guarantee and the amount you borrow.

IE... $750K (home or unused VA guarantee and $548,250 limit) - $548,250 = $201.750...therefore purchaser would owe $50,437 to get into jumbo or second home.

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