VA Loan / Veteran Mortgage News
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JUNE 2004
Committee Moves Bill to Boost VA Home Loan Guaranty Limit
The House Committee on Veterans' Affairs cleared a package of six bills that would expand and
strengthen a number of education, housing, health care, and disability programs for veterans and
active duty military personnel.
"The legislative package of benefits and services approved today represents a significant victory
for America's servicemembers and veterans," said Committee Chairman Chris Smith (NJ),
sponsor of four of the bills approved today. "These bills would not only help servicemembers
in their transition from active duty to civilian jobs and housing, they would also help strengthen
VA health care and benefit programs for those veterans that rely on them," he said.
H.R. 4345 as passed by the Committee, would increase the maximum loan amount for loans under the VA
home loan guaranty program. Under H.R. 4345, qualified servicemembers and veterans could receive
a loan guaranty up to 25% of the Freddie Mac conforming loan rate (currently $333,700) to help
secure mortgage financing. This legislation, sponsored by Reps. Ginny Brown-Waite (FL) and
Susan Davis (CA), would also annually index the loan guaranty limit to the Freddie Mac
conforming loan rate in the future.
This bill would effectively raise the eligible Veteran's VA loan eligibility from $60,000 to $83,435.
The VA guarantees VA home loans up to 4 times the amount of eligibility. That would take
the current maximum VA home loan from $240,000 to $333,740. This all could be done with a
$0 downpayment. This along with five other bills before the Committee were unanimously ordered
reported to the House.
More Jobs Help Our Economy
Strong employment growth and an upsurge in prices are causing America's rock-bottom interest rates to move up. Low rates no longer are needed to get our economy moving.
Rising mortgage rates aren't expected to drastically affect real estate sales in coming months. One reason is that adjustable-rate home loans reduce the impact of rate increases.
And since inflation remains subdued, economists don't expect rates to go up exorbitantly. Today's rates remain attractive - a decade ago rates on 30-year loans were close to nine percent.
Buyers also will be helped as home prices go up at a slower pace in coming months, since costlier financing will make properties less affordable. Some areas that have seen rapid appreciation could find house values stagnating, or even dropping.
Yet homes have steadily increased the wealth of generations of Americans, and typically form the bulk of a family's net worth. Short-term price fluctuations aren't significant, as long as your payments are affordable and you don't need to move immediately.
Feel free to contact us whenever you have questions about your home financing. And make sure to remind your friends, family, and co-workers that we can provide the expertise they need when purchasing a house.
Selling in All Markets
Home sales typically pick up during the summer months. Nice weather and long days make it easy for folks to shop for houses. And families often prefer to move when children are out of school.
But it's important to look at sales prices of houses that are similar to yours before deciding on an asking price. You also need to understand market conditions before finalizing your selling strategy.
Look at the number of comparable homes on the market to see how much choice buyers have. And find out how long it's taking those properties to sell now.
You'll then have a good idea of whether your neighborhood is in a "seller's market" or a "buyer's market." If the inventory of houses for sale is low, and new listings sell quickly, then you're in a seller's market.
Yet it's possible to sell at a fair price, and within a reasonable time frame, in all markets. Here are ideas on selling your house given different market conditions:
- Let buyers know they're competing for your house in a seller's market. Don't provide anyone with an early showing before your property is officially on the market.
- Be ready to move. Know what you'll do if you receive an attractive offer right away. If you'll be buying another house and the market is tight, you also need to be actively shopping for homes.
- Make sure your house looks great. Appearances count, even when the market is in your favor. Your home won't sell as fast, or for as high a price, if you've neglected cleaning and maintenance before putting it up for sale.
- Don't be greedy. At times strong markets cause buyers to offer a price above what you listed it for. Although that's great for sellers, it can also cause them problems.
One is that the property may not appraise at that high a price, which can make it hard for a buyer to obtain financing. Enthusiastic bidders also can later feel they overpaid, and try to get out of the agreement by alleging your house has undisclosed defects.
Buyer's Market Tips
Make sure your house is priced right in a buyer's market - and that it looks terrific. You won't get any offers if you're asking too much at a time when buyers have plenty to choose from.
Attract potential buyers by knowing how to help them purchase your house. Offering to pay some closing costs will encourage more interest in your home.
A buyer's market doesn't mean you have to settle for an unqualified purchaser. Look for a buyer who has been pre-approved for a mortgage, and doesn't offer a contract with too many contingencies.
You May Be Surprised
Today's mortgages are designed to help folks in many circumstances. Here are some examples -
- Families who are starting to build a house now can insure their mortgage will be affordable with the help of an "extended rate lock." You can make sure that rising rates won't markedly increase your payments once you move in.
- People who have experienced financial difficulties still can obtain home financing. In fact, they can purchase property with very low down payments.
- First-time buyers can get into a house with little or no money down. Your first purchase is crucial, since it lets you start building home equity.
Get in touch with us to find out more about how today's real estate financing can be arranged to suit your needs. We'll work with you to gain financing that lets you reach your goals!
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