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.
OCTOBER 2004
Quick Facts for VA Purchase Transactions
- VA does not have a maximum loan amount. However, we sell loans on the secondary mortgage market, so we are generally limited to $240,000 with no downpayment. With a downpayment, we can go up to $333,700.
- The veteran does have to qualify income and credit wise.
- The veteran does have to occupy the home as their primary residence.
- The veteran does not have to be a first time home buyer and may reuse his/her benefit.
- Lenders like VALoans.com, not VA, sets the interest rate and discount points, so they may vary from lender to lender.
- There is no private mortgage insurance, but VA does charge an up front VA funding fee, which may be financed. The exception to this is that if a veteran is in receipt of VA service connect disability payments each month, he or she does not have to pay a VA funding fee.
- The seller can pay for closing costs. There is a requirement that seller concessions do not exceed 4%, but only certain items are considered as part of the concession; ie. payment of pre-paids, VA funding fee, payoff of credit balances or judgments on behalf of the veteran, funds for temporary buy-downs (not discount points).
- The veteran is not allowed to pay for the wood destroying insect (termite) report; it is generally paid by the seller.
- VA does not approve the majority of loans. The majority of transactions are handled directly by the lender with little VA intervention.
Quick facts for Qualifying
VA Loans guidelines for loan qualification should be considered in order to make sure you qualify. These are some of the most basic of VA guidelines for qualifying for a VA loan:
- Two years of steady employment, preferably with same employer.
- Last two years income should be the same or increasing.
- Credit report should typically have less than two thirty day lates in last 12 months.
- Bankruptcy's must be at least two years old, with good credit since.
- Foreclosure's must be at least two years old, with good credit since.
- Your new mortgage payment and monthly debts should be approximately 41% of your gross income.
If you have answered YES to most of these statements, you probably qualify for a VA mortgage loan.
Prequalifying gives you a general idea about your borrowing power. If you prequalify for a loan, it means that you have told a lender what your income and assets are, and that based on those statements, you should be able to qualify for a given loan. Please give us a call.
Year-End Home Market is Strong
Mortgage rates have remained lower in 2004 than many economists expected. Home sales and property price increases thus have been stronger than originally forecast.
Now still is a great time to make a home purchase. Buyers in the colder months often find they're competing with fewer other purchasers.
And people who are selling their house this time of year may be doing so because they must move soon, due to a job change or similar event. They'll be more likely to lower their price expectations as a result.
Although the Federal Reserve has raised short-term rates in 2004, they still are historically low. Inflation expectations also are moderate, which is keeping long-term rates attractive.
Buying a home involves much more than interest rates and the overall market, though. You must find a home you'll enjoy, and a mortgage that's uniquely tailored to your financial needs. Contact us soon to discover how today's home loan options can help you purchase a house you'll love for years.
Get the Most from Your Home
Looking carefully at areas of a home where you'll spend a lot of time can help you make a satisfying purchase. For many households this means focusing on kitchens and bathrooms.
You want to make sure that their design will suit the needs of your family. If you're considering renovating the kitchen or bath in your current home, this can be a helpful exercise to go through, as well.
In the kitchen it's important to consider where you'll store pots and pans that you use regularly. Also figure how much sink space you'll need, as well as counter space for cutting boards, mixing ingredients, and small appliances such as coffee makers and food processors.
Larger bathrooms are necessary if several people will use them at the same time in the morning. Make sure there's enough storage and counter space, as well as adequate lighting.
No matter if your plans call for you to buy a new house or remodel your existing one, call us soon to find how to obtain funds for that purpose on attractive terms. I'll help make sure your goals become reality!
Peace of Mind
Adequate homeowners insurance also can protect you from the effects of a natural disaster. Yet although a home is most family's most valuable asset, it's estimated that almost two out of three households don't have enough insurance coverage.
One reason is that rapidly rising property values in recent years mean an older policy may not provide enough funds to replace severe damage. Your insurer may be increasing your coverage just to reflect rising inflation.
But average home prices have been going up at several times the inflation rate. Many owners also have added value-enhancing home improvements, and may not have told their insurance company about those renovations.
It's best to check with your insurance agent to find out how much coverage you have. Make sure it would provide enough funds to rebuild your current home if it was destroyed.
Also ask how much coverage you would need to replace your personal property inside the house.
Finally, go over the liability provisions of your policy, to determine if you have enough coverage to protect yourself from a lawsuit from someone who is injured on your property.
If you do suffer uninsured damages -- whether from a storm or bursting pipes -- you may be able to claim "casualty" deductions on your income tax return. Go over your specific details with a qualified tax advisor to learn more.
Homeowners Enjoy Rising Prices
Average home prices nationwide rose by more than nine percent over the twelve months ending June 30, states a government report. It's expected that 2004 will be the fifth year in a row that U.S. real estate values have climbed by at least seven percent.
Yet this amazing performance by real estate has some potential buyers worried that prices could stay flat in the future, or even fall in areas that have experienced rapid price climbs. In the chart here you can see how values have grown in different regions over the past year.
Although strong price increases eventually could lead to a market slowdown, it's also possible that values could continue rising for some time, making it harder for households who put off buying a home. No one knows for sure how real estate markets will move in the future.
Yet we do know that owning a home has been a stable investment over many decades. Most families find that their house becomes their most-valuable asset.
