VA Loan / Veteran Mortgage News

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Our Positive Outlook

About three out of five Americans are looking forward to the next decade, according to a recent poll. Most of us believe the 2010s will be better for our country than the first ten years of this century were. Additionally, this optimism is consistent across all age and income groups. Being able to respond to challenges is a powerful trait to possess. Americans have been through some difficult times, and we don’t expect the future to necessarily be easier.

However, we’re confident that we can make the most of our situation. Challenges push us to re-examine our outlook and approach – and stay committed to what’s important. We’ll help you find positive benefits in today’s real estate market. Call us with your questions, to get the straight answers you need now.

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New Disclosure Forms for Borrowers

Mortgage borrowers are receiving revised disclosure forms which describe the details of their loans. All borrowers are required to be given the same Good Faith Estimate (GFE) form after they apply for their mortgage, and a HUD-1 settlement sheet when the loan is ready to be finalized. Government officials found when devising the new forms that it’s difficult to highlight information which is meaningful for every borrower. That’s because each homebuyer or refinancing owner is in a different situation.

A person with low savings is most concerned with how much money they’ll need to come up with to complete their transaction. Another borrower will focus on the monthly payment, and how that could change over time. Yet refinancing owners may want to consider their total payments over the life of their mortgage. Each loan has specific features, and offers benefits which are suited for borrowers in different situations. Matching a mortgage to your current circumstances and future goals is crucial to your happiness.

Although every borrower receives the same standard, federally-mandated disclosure forms, we’ll take the time to understand your objectives, and show you how it’s possible to reach them. And when looking at mortgage options, we’ll highlight the features most pertinent to your needs.

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We're using these social media tools to keep the veteran community informed about a variety of issues. We'll be highlighting changes to veteran benefits and will keep our fans updated on relevant stories and articles.

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VA Clarifies Stance on Origination Fees

VA=1% vs. FHA=2%

The Federal Housing Administration announced on December 31st, 2009 that they updated disclosure requirements and limits on loan origination fees. FHA origination fees are no longer limited to 1 percent, according to Mortgagee Letter 2009-53 from the U.S. Department of Housing and Urban Development.

On January 7th, 2010, the Department of Veteran’s Affairs came out with their own guidelines called, Impact of New Real Estate Settlement and Procedures Act (RESPA) Rule on Fees and Charges for Department of Veterans Affairs (VA) Loans. Section 2 states the following:

Allowable and Unallowable Fees. 38 C.F.R. 36.4813 limits the fees that a veteran may pay when obtaining a VA-guaranteed home loan. Veterans may pay a maximum of a one percent origination fee charged by the lender (plus reasonable discount points) as well as reasonable and customary amounts for certain itemized fees.

Source: http://www.homeloans.va.gov/circulars/26_10_1.pdf

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Great Buying Opportunities

“Homes are now cheap,” states The Wall Street Journal. “If you’ve been thinking of buying a home to live in,” the Journal adds, today’s conditions offer “a big opportunity.”

Today a typical household buying an average residence finds mortgage payments take up less than 20 percent of their earnings. Homes haven’t been as affordable “since the early 1970s,” adds the Journal. And that’s before figuring in the benefits of special tax credits for buyers, which are available through the end of April. First-time buyers can reduce their tax bill by up to $8,000, and current homeowners can enjoy tax breaks of as much as $6,500 when purchasing a principal residence now.

It’s possible real estate could weaken in coming months, especially if job growth doesn’t occur. “But long-term fundamentals are more important than the short-term noise,” explains The Wall Street Journal. And few observers doubt that values won’t rise over the next decade. Historically home prices have advanced about one percent more than the rate of inflation. Over time houses have averaged 3.5 to four percent annual increases in what they’re worth.

Today homebuyers should feel comfortable about moving ahead with a purchase if they can answer “Yes” to the following questions –

• Do you plan to stay in your home for at least five years? You’ll then be likely to sell profitably.
• Are your monthly payments affordable – and will they stay that way for as long as you plan to live in the home? Homeowners with payments which fit into their budget aren’t overly distressed by the price fluctuations of houses. Instead, they can enjoy living in their own home, since they know that real estate values generally rise over time.

Contact us when you’re ready to make an important purchase, and we’ll assist you every step of the way. We’ll make certain that buying a house is a great long-term decision which improves your life.

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Military Pay Charts, Benefits, and Guidelines

Changes to military pay scales and veteran benefits are introduced each year for everything from Drill Pay to your VA Loan benefits. This family of websites offers free information so you can stay current.

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Refinancing Lets Owners Save

Mortgage rates remain low, providing owners with opportunities to refinance and reduce their monthly payments. Homeowners generally prefer 30-year, fixed-rate loans since they offer low, stable payments. Yet because rates are attractive on most loan types, borrowers are able to select the mortgage which best fits their needs. Adjustable-rate loans offering payments which don’t change for a number of years provide lower rates for owners who anticipate moving within a decade.

Often owners who took out a 30-year mortgage six or seven years ago will opt for a 15-year loan when refinancing. Doing so will increase their monthly payments, but reduce the time until their mortgage is paid off. A 15-year loan can give owners a debt-free retirement. Paying off your mortgage means you can maintain your lifestyle without having any housing costs.

Rates on 15-year loans actually are lower than what’s available on 30-year mortgages. Recently 15-year mortgages were at their lowest levels ever recorded, which is a big reason for their current popularity. Last fall about one in five refinancing homeowners chose a 15-year mortgage. A year earlier, just nine percent preferred a 15-year loan.

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Time to Act

Mortgage investment firm Freddie Mac forecasts that rates on 30-year loans will rise approximately one percent by the end of 2010. Government purchases of mortgage-backed securities over the past year have helped keep rates low. But that program is scheduled to lapse by the end of March 2010. When combined with a stronger economy, many commentators believe rates will move upwards as a result.

“Extraordinary resources have been put into keeping the rates down,” states Amy Crews Cutts, a Freddie Mac economist. “It’s hard to imagine that the rates can go much lower than they are.”

We’ll go over today’s refinancing possibilities with you, and help you choose one which will put you on track to attain your goals. Call us soon, since no one knows for sure how long today’s great rates will be available!

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