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Veteran Home Loan Program - Your Key To Homeownership
Many people are kept out of the housing market due to lack of sufficient down payment and/or funds available for closing costs. Yet these potential homeowners can afford to make a rental payment that would be equivalent to a mortgage payment. In fact, the lack of resources keeps veterans renting instead of becoming owners as they try saving money to buy a home. Meanwhile home prices continue to appreciate as housing continues to rise in cost.
Here is where the Veteran Home loan program excels over competing loan products. VA mortgages allow for a home to be financed in one loan up to 100% of the acquired home's value. In addition, the seller is allowed to pay most-if not all-of the closing costs and prepaid items. This means little to no cash out of pocket. Most housing types are eligible: residential homes, condominiums, townhouses, manufactured homes, new construction and even 1-4 unit rentals (additional conditions apply). If lack of available funds is the issue preventing home ownership, VA Loans offer the solution.
Still, very few veterans take advantage this type of mortgage. It is a shame that more veterans don't familiarize themselves with this benefit. The interest rate is the same or lower than most conventional financing. The mortgage products offered range from 10-30 year fixed rate mortgages, ARM's (adjustable rate mortgages), and even temporary buy-downs are allowed. The eligible loan amount is the same as a conforming conventional loan-currently at 417K. In addition, VA financing can be used for refinancing existing homes. As you can see, the product isn't the problem. The product is as competitive as most that is available. The lack of awareness is the problem. Ask your mortgage broker or lender to explain your options. If they don't offer the VA mortgage, then find someone who does. We at Venture Development offer VA loans. In the end, you may end up with a conventional or FHA loan if these products are better suited for your situation. Until you compare mortgage options you won't know what is right for you.
Another advantage of a Veteran mortgage is the flexibility found within the underwriting process. Employment history is very flexible. Credit for all types of mortgages is more stringent today than in the past. That being said, the focus is going to be on the last 12 months of payment history. Underwriting can use alternative sources of credit such as utility bills and cancelled checks if the credit depth is weak. A prior BK or foreclosure is also forgivable. Depending on the type of bankruptcy, you would be eligible one to two years following your discharge date if you've reestablished positive credit.
Who is eligible to obtain this loan? Many veterans and even some of their spouses can obtain a veteran mortgage. Here is a very short list of who is eligible: Veterans who served during WWII, Korean Conflict, Vietnam War, or Persian Gulf Conflict AND who have served 90 days of active duty, or have been honorably discharged, or were National Guard/Reservists activated. Veterans with service during Peacetime periods and active duty military personnel must have had more than 181 days of consecutive active service before becoming eligible. Reservists and National Guardsmen are eligible after 6 years of enrollment in a selected service. There is even a program for non active duty spouses. Consider this: an un-married spouse of a veteran who died while in service or from a service connected disability or a spouse of a service person who is considered MIA/POW for at least 90 days are also eligible.
Veterans have spent a part of their live defending our way of life. Freedom isn't free. Why shouldn't they be allowed to participate in the very same American Dream that they selflessly protected for you and me. The VA loan was created to help those that have helped all of us. Collectively we can spread the word about the benefits of this unique type of loan.
First Time Buyer Tips And Considerations
Are you currently thinking about buying your first house? Real estate is a fantastic investment. Don't let the media hype fool you: low interest rates combined with reduced home prices make this an excellent economic environment for first-time home buyers. Here are a few tips to help you along the way.
The first and most important thing to remember is to buy only as much house as you can afford. Just because a lot of young people in your area are buying gigantic homes with acres of property and four car garages doesn't necessarily mean they could afford their mortgages. All you have to do is look at the foreclosures situation to see examples of people who purchased more than they should have.
Adjustable rate mortgages, or ARMs, have been exceedingly popular in the last ten years. When the housing market was on fire a few years ago, banks were giving out loans to practically anyone, regardless of their income or credit.
ARMs made it possible for people to buy enormous homes even though they didn't make a lot of money because they start out with low payments and then balloon as time passes. This is a big contributing factor to the current housing crisis. More and more people who had adjustable rate mortgage loans are defaulting as their homes go into foreclosure. I tell you this not to discourage you from looking at ARMS, but to help you understand the risks. In fact, FHA offers a great ARM that have 1% annual caps and a lifetime cap of 5%. This will beat any conventional ARM offered.
Because the banks are feeling the crunch, credit standards are being raised. If you are uncertain of your credit score, it is wise to check online with a company like Equifax, TransUnion or Experian to find out where you stand before you apply for a home loan. Clear up any financial loose ends and get your score looking the best it can before you start the home loan process. You'll get a better interest rate and have more leverage with lenders. It may even allow you to get 100% financing. Yes, you can still obtain 100% financing and you don't have to be a veteran.
As far as your down payment is concerned, you may want to come up with as much money as you possibly can. Why, you ask? PMI, or principal mortgage insurance, will add to your monthly payment until you've paid for twenty percent of your home. Even if you can't get that much money together, and most first time home buyers simply can't, try your best if you want to avoid PMI. As an added bonus, a nice down payment improves your chances of getting your loan in the first place.The good news is that your PMI might be deductible. You have to have an adjusted gross income of under 100K to deduct it all otherwise it will phase out when it reaches 110K.
You will pay half a percent to one and half percent of your loan value every year until it reaches approximately 75-80% of either the initial loan balance or of the market value. The rules are different for FHA and conventional loans and vary slightly. Generally,lenders won't tell you that you're eligible to get your PMI dropped from your payment. So, be sure to keep tabs on your remaining loan balance and contact your lender to get the PMI dropped. It will save you quite a bit of money in the long run.
Lastly, first-time home buyers will feel much better about purchasing their new home if they learn about the closing process and closing costs. We teach a first time buyer class where we cover this and much more. We recommend you seek out a similar class in your area.
The home buying process can be exhilarating and overwhelming, but the more knowledge first-time home buyers have on their side, the better off they are. Keep on learning and happy home buying! You will love your new home, and it will be one of the best investments you'll ever make.
Real Estate - It Could Be the Best Investment You'll Ever Make
"The housing market is falling apart! This is a horrible time to buy a home, or sell a home or even LIVE in a home!"
Have you been hearing a lot of news that sounds like this lately? Well, economists love, and I mean LOVE, to spread the gloom and doom. When the economy's going great, they don't get any attention. But as soon as the market changes, everybody's listening to them again. So, when you hear all that bad news, keep in mind that it sells newspapers.
That's certainly not to say the market hasn't changed. It is still changing, in fact. But that makes investing in real estate all the more enticing, if you know what you are doing.
But here's the skinny on investing in real estate. It is one of the best decisions you'll ever make. And guess what? I'm here to tell you that this is actually a GREAT time to buy.
There are very few purchases you will ever make in your life that will actually increase in value while you are using them every day. These are called INVESTMENTS, and anyone that knows anything about investments will tell you that good investors are in it for the long haul.
If you are thinking about investing in real estate in the current market, as long as you choose a property that is worthwhile and maintain it well, it will reward you with plenty of equity over the years. If you are a foolish investor that just wants to get in and out and turn a quick profit, this likely isn't the best market for you.
But if you are thinking of investing in real estate the smart way, using pragmatism and patience, this is a great time to buy. Prices have fallen on homes, and so have interest rates. So, you can lock in a mortgage at a fantastic rate and save money on your purchase price.
Prices will inevitably rise back up, and you'll be sitting pretty with a great interest rate and extra profit from your amazingly discounted price. Since sellers often have had their homes on the market for longer than they've wanted to, they may be willing to cut you a deal. That's all the better for you, and they will finally be able to get on with their lives. Everybody wins, especially your pocketbook.
If you are looking to buy a fixer-upper to rent out as an income property, this economy will benefit you, too. Because lenders are leery nowadays about handing out home loans to people with bad credit, and many people have lost their homes because their adjustable-rate mortgages went through the roof (literally), a surplus of renters is soon to hit the streets.
Just don't be overly eager to flip your investment property. If that's your intention, it might take some time before it sells in this market. But by all means, rent it out.
The economy might be cyclical, but history teaches us that investing in real estate is nearly always a great decision for the long term. Despite what the media tells you, today is no exception to the rule.
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