VA Loan / Veteran Mortgage News
Bruce Reichstein (NMLS #273132) is Sr. Loan Officer specializing in VA Home Loans with Emery Federal Credit Union and VALoans.com. Bruce has originated and underwritten VA loans in all 50 states for over 25 years and is a Nationwide Lender.
SEPTEMBER 2004
Veteran Loans for Mobilized National Guard and Reservists
VALoans.com receives many emails from National Guard and Reserve Units who have been called to
active duty and want to know more about a VA home loan or how they can qualify for a reduced
interest rate under the SSCRA Act of 1940. It is hard to believe, but the total number of
National Guard and Reserve personnel who have been mobilized is currently at 163,318.
A cumulative roster of all National Guard and Reserve personnel, who are currently mobilized,
can be found at
www.defenselink.mil/news/Sep2004/d20040901ngr.pdf.
Qualifying for a VA Home Loan for Active Duty Service Personnel
If you are now on regular active duty (not active duty for training), you are eligible
after having served 181 days (90 days during wartime) unless discharged or separated
from a previous qualifying period of active duty service. Additional information can be
found at
eligibility.cfm
and
www.homeloans.va.gov/elig2.htm.
Overview of the Soldiers' and Sailors' Civil Relief Act of 1940 (SSCRA)
The Soldiers' and Sailors' Civil Relief Act is a statute designed to provide some
relief to service members during active duty military service so they can devote
their energy to the defense of the nation. The act has several provisions including
a cap on interest rates and restrictions in certain mortgage foreclosure proceedings.
The act caps the interest rate on all obligations and liabilities (mortgages) during
the period of military service. The cap is 6% but applies only to those mortgages
entered into prior to entering active duty.
The Act uses several terms to discuss who is eligible. The Act applies to "persons in
the military service" which include all members of:
- The U.S. Army including the Army National Guard and Army Reserve
- The Navy including the Fleet Reserve and Naval Reserve
- The Marine Corps including the Fleet Marine Corps Reserve and Marine Corps Reserves
- The Air Force including the Air National Guard and Air Force Reserve
- The Coast Guard including the Coast Guard Reserve
- All officers of the Public Health Service for duty to the Army or Navy on active duty.
"Active duty" refers to a person who has the "Armed Forces as a fulltime job."
The Act applies when the period of military service begins, which is the date on which
the person enters active military service, and ends on the date the person is released
from active military service. "Entering active military service" begins on the date the
person receives the order of induction or order to report for military service.
For example, if a customer enters active duty military service after obtaining a mortgage
loan, they would be entitled to the rate cap provisions under the Act. If a customer
was in the military service as a full-time member or in the Reserves on active duty
when they obtained the mortgage loan, they are NOT eligible for the rate cap provisions
of the Act because the Act applies to obligations entered into prior to entering active
military service.
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more information
Today's Loan Strategies
High energy prices are encouraging consumers to spend a little less on non-essentials.
Yet because consumer spending is the backbone of America's economy, the Federal
Reserve won't need to raise rates rapidly to keep demand from overheating. Mortgage rates
should remain attractive in the near future. However, they will continue edging up
from 45-year lows.
Higher rates make it harder for consumers to buy homes. Although adjustable-rate loans
and interest-only payment options can boost housing affordability, home price increases
will be smaller in the future. Here are other ways our economy could affect owners:
- Homeowners with fixed-rate loans will keep the same monthly payments, no matter how our economy fluctuates. Long-term owners also don't need to be overly concerned about changes in real estate values, since houses will remain outstanding investments over time.
- Folks who recently moved into a home may find they'll need to live there longer than they planned in order to sell at a good profit. Yet if slower appreciation affects the value of their house, it also will keep cost increases down on their next residence.
- Owners with adjustable-rate financing may want to move into a fixed-rate loan now, while those rates remain low. Someone who took out a home equity credit line to make home improvements also may want to convert that into a fixed-rate loan.
Being aware of economic changes can help you obtain attractive home financing now. Call
us now to see how more-affordable payments will increase the enjoyment of your home.
Know Who You're Working With
"Home-mortgage scammers and spammers are working overtime," writes nationally syndicated real estate columnist Kenneth Harney. Many of us have received e-mail offers from spammers touting incredible loan terms.
Harney notes that many of these come-ons are from firms that will sell your personal data after you fill out an online loan application. Others also aren't mortgage companies, but will sell your personal information as a prospective borrower to numerous lenders.
A big reason for this bothersome activity is that mortgage rates have edged up in 2004, ending the "refinancing boom." Most homeowners no longer can reduce their monthly payments simply by taking out a new loan.
Unfortunately, many opportunistic loan officers have come into the mortgage business in recent years. Living off refis was possible for a while, but now they are struggling.
In fact, industry experts say that most of these inexperienced lenders will soon be working in another field. But it's also important to know that spam isn't the only way they communicate.
Some lenders advertise low rates to get a lot of phone calls. Yet most prospective borrowers find they don't qualify for those special rates.
Or you may discover that a great "teaser rate" is good just for a short period. Additionally, that loan may produce "negative amortization," which adds to the total loan amount you owe.
Home financing involves more than looking for the lowest rate. Mortgages are complicated financial instruments, and should be chosen so they fit into your household's budget and plans.
You can count on us to work in your best interests - both today, and when you need a mortgage in the future. Our business is built on helping households to reach their goals in all market conditions.
We Take the Time
Most lenders are eager to take loan applications. But understanding your individual needs and dreams is more critical than the mechanics of processing a mortgage.
That's why we first listen to your goals, and see how they can be realized. Then we'll go over financing possibilities with you, on a no-obligation basis.
You need to make crucial financing decisions in a no-pressure situation. You also must be able to make an informed choice, by understanding what your options are.
You'll be confident when you trust that your loan officer is working in your best interests. You'll appreciate knowing there will be no surprises from the time you sign the loan application until your loan is funded.
Professional expertise and integrity are more than goals for us. They're daily passions: We know that by performing at a high level for our clients, they'll help us grow our business by suggesting our services to others.
Be sure to contact us when you need a home loan. We'll take the time to make certain you're comfortable, and that your financing program is suited to your individual situation.
