We have been approved for a VA loan and are discouraged from buying a home at this time because the interest rates are higher than they were at the beginning of the year. The feds cut the interest rate one half percent so why is the VA interest rate up instead of down?

The Federal Reserve does not actually cut rates. They either add or extract liquidity from the banking system to hopefully impact fed funds rates which are overnight loans from one bank to another. When the press states that the Fed has cut rates, it is a misnomer in that they have only adjusted the "target" for the fed funds rate.

Lowering the target is designed to stimulate the economy which by nature has an inflationary impact and can then trigger a rise in long term rates. When the Fed raises the target, it is designed to slow the economy in order to control inflation.

In today's case, the Fed action increased long term rates in that the 10 year treasury yield has risen in recent weeks from 3.45% to 3.95%.

We anticipate that interest rates will continue to rise to much higher levels than over the previous 7 or 8 years. So waiting for rates to go back down may be a long wait. Click here for VA Home Loan Daily Rates.

We recently received a call from a California Homebuilder asking if our company VALoans.com, originates VA home loans greater than $417,000. They have a mortgage subsidiary who has two qualified veteran borrowers in both Shasta and Ventura counties in CA and they will not accept the higher lending limits in those counties. It seems that many secondary market lenders are only allowing VA loans up to $417,000. That is not the case with our company.

In circumstances involving VA home loans greater than $417,000, Higher Limit Counties, the VA has designated 29 states where the $0 down loan can be obtained for a loan amount greater than $417,000. A Veteran with full entitlement available may borrow up to the amounts posted on our site VA Maximum Loan Limits.

VA's Authority to guarantee adjustable rate mortgages (ARM's) and hybrid adjustable rate mortgages was scheduled to expire on September 30, 2008. Section 505 of Public Law 110-389 extended this authority through September 30, 2012. All VA program requirements related to these products remain in effect. If you are interested in obtaining a VA ARM, our loan counselors will be glad to discuss this option with you.

"Occupancy by the spouse of a veteran satisfies the occupancy requirement VA Law of Occupancy for a veteran who is on active duty and cannot personally occupy the dwelling within a reasonable time: that is, a veteran assigned to an overseas or other remote duty station." Therefore, the veteran is eligible for a loan if - they have at least 12 months remaining on their term of enlistment. If they have less than 12 months, and plan to re-enlist, there are steps to take and they would still be eligible. If the veteran doesn't plan to re-enlist, they need to have a civilian job lined up and be verified. The civilian job income would be used to qualify for the loan.

A Veteran borrower recently wrote to us with the following: I am in the process of purchasing a home with my VA loan eligibility. I asked my real estate agent if I could get a copy of my VA appraisal. She stated that I could not get the VA appraisal until the closing on the loan. I want to know if this is true. Can I get a copy before I close on the home?

The real estate agent in this case is not correct. A veteran who pays for an appraisal is entitled to obtain a copy of the appraisal and of course, before the closing. A VA Automatic Company electronically places the order in the VA LAAP system. The VA Appraiser is selected by the VA and completes the appraisal. It is then electronically available to the lender and ready for distrubion to the borrower at that time. There is never a good reason to have to wait until closing.

We recently wrote about the Temporary Increase in Maximum Loan Guaranty Amount for Certain Housing Loans Guaranteed by the Secretary of Veterans Affairs for loans originated from July 30, 2008 through December 31st, 2008.

We are pleased to announce that the VA has extended this through December 31st, 2009.

Here is the exact VA information as presented: Maximum Guaranty Amounts for Loans Originated After January 1, 2009.

For all locations in the United States other than Alaska and Hawaii, the maximum guaranty amount is 25% of the greater of: (a) $417,000 or (b) 125 percent of the area median price for a single-family residence, up to $729,750.

So how do you find out if you can get a $0 down loan for up to $729,750? Simply go to The home page of VALoans.com

Scroll down to VA Loan Lending Limits. Click on the desired state and the information comes up for each county. The results for the single family home allows for an eligible Veteran to purchase a new VA home loan with $0 up to that amount.

This only applies to new houses and does not cover cash out refinances or streamline refinances.

While there seems to be confusion in the marketplace, our company, is currently originating VA Home loans with these guidelines Nationwide.

An Active Duty Veteran recently was denied a VA home loan due to having late payments on their credit report. They want to know what to do for the future?

WHAT THE VA LENDER'S HANDBOOK SAYS CONCERNING LATE PAYMENTS ON ACCOUNTS

In circumstances not involving bankruptcy, satisfactory credit is generally considered to be re-established after the veteran, or veteran and spouse, have made satisfactory payments for 12 months after the date of the last derogatory credit item(s). When the underwriter analyzes the borrower's credit; it is the overall pattern of credit behavior that must be reviewed, rather than isolated cases of slow payments. Account balances reduced to judgment by a court must either be paid in full or subject to a repayment plan with a history of timely payments. If you re-establish good credit over 12 months, you can re-apply for a VA loan at that time.

A Veteran asks the following question: Our first mortgage has a VA loan, and our second mortgage (which is a home equity loan) does not. Can we combine the two and refinance into one single VA loan?

The answer is yes, but there are some guidelines. The rules concerning a VA Cash Out Refinance are as follows: The VA requires a funding fee of 2.15% for a first time use and a 3.3% funding fee for subsequent users. In addition, the maximum loan amount is 90% of the appraised value of the property. (Not available in Texas). Unless you have a VA minimum disability which exempts the VA funding fee, it would be in your best interest to compare the both the conventional or fha mortgage rate on a cash out refinance.

Another important factor to remember is that if the equity in the property is greater than 20%, there will not be any Mortgage Insurance necessary on a conventional loan.

I am a veteran and want to use my VA Eligibility. Will I qualify to purchase a New VA Home if I only recently started my civilian job?

Generally, employment less than 12 months is not considered stable and reliable. However, it may be considered stable and reliable if the individual facts warrant such a conclusion. The underwriter must carefully consider:

(1) the employer's evaluation of the probability of continued employment, if provided. (2) assess whether the applicant's training and/or education equipped him or her with particular skills that relate directly to the duties of his/her current position. This generally applies to skilled positions. Examples include nurse, medical technician, lawyer, paralegal, and computer systems analyst.

If the probability of continued employment is high based on these factors, then the lender may give favorable consideration to including the income in total effective income. An explanation of why income of less than 12 months duration was used must accompany the loan submission.

If the probability of continued employment is good, but not as well supported, the lender may still consider the income if the applicant has been employed at least six months to partially offset debts of 10 to 24 months duration.

The underwriter must determine the amount which can be used, based on such factors as: 1) the employer's evaluation of the probability of continued employment, if provided. 2) the length of employment (for example, ten months versus six months). 3) include an explanation with the loan submission.

We ask that all applicants fully describe their work, previous experience in directly related fields, any related education, the length of time for any internships and their overall education levels.

Our company constantly receives phone calls from Builder's across the country that have eligible Veteran's desirous of purchasing their homes, but do not know how to proceed with obtaining a VA Builder ID number from the Department of Veterans Affairs.

The process is quite simple and does not require lengthy forms to be completed. We strongly suggest that you have your qualified VA Lender submit the documentation to the VA in order to expedite the process. Here is a step by step instruction on what to download.

Builder Information and Certifications

VA Form 26-421 - Equal Employment Opportunity Certification

VA Form 26-8791 – VA Affirmative Marketing Agreement

VA Form 26-1859 – Warranty of Completion of Construction

HUD Form NCPA-99-A – Subterranean Termite Soil Treatment Builder's Guarantee

HUD Form NCPA-99-B – New Construction Subterranean Termite Soil Treatment Record

As experts in the VA lending process, VALoans.com would be happy to assist in this process.