VA Loan / Veteran Mortgage News
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MARCH 2006
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 $417,000 with no downpayment.
- 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 www.valoans.com, not the 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.
Real Estate Rewards Owners
Home values across the country went up by almost 13 percent last year, states a recent government report. High demand for
real estate sparked the price rises, and boosted property sales to a record total in 2005.
You can see how prices went up in different regions last year in the map here. Both sales and price
increases are forecast to be weaker in 2006, as the market downshifts to a more-sustainable level.
Home sales still should reach their third-highest total ever this year, predicts the National Association of Realtors (NAR).
One reason for the strong sales is that real estate keeps adding to our household wealth.
Last year an average home's value rose about three times as much as inflation did. Over the past
five years house prices have increased by almost 58 percent, according to government figures.
Of course, no one knows exactly where home values will be tomorrow. We're sure to see different price performances
regionally, since local job markets affect housing demand. Having a larger supply of homes available for purchase
now is putting less upward pressure on prices. Buyers today have more choice, and are able to negotiate harder.
Both existing owners and new buyers can feel confident their home's value will rise over time. Having a long-term
outlook is essential to real estate success.
However, that calls for making sure your payments will remain affordable as long as you live in your house.
Contact us soon to make sure your real estate financing will continue to work within your budget, and help you reach your goals.
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Quit Burning Money
Energy-saving renovations boost a home's future resale value. Additionally, they insure you'll save money each month while
living in the house. Such improvements include adding insulation, putting in new windows and doors, or purchasing a new
furnace or air conditioner. High energy prices increase the return you'll gain from making these improvements.
Older gas furnaces with pilot lights typically convert just around 60 percent of the fuel they use into warm air. But a
new gas furnace can turn 95 percent of the energy it uses into heat.
Furnace manufacturers add that most units last about 25 years. Have a unit that's more than two decades old inspected -
or you could risk having it fail on a cold morning. Taking measures to retain more heat in your house, such as
putting in more insulation and sealing drafts in windows and heating ducts, also will help keep your home warm.
Make sure when budgeting for a new heating or cooling unit that you add on the installation costs. A contractor will
need to review your existing ductwork, wiring, and gas pipes to come up with an accurate estimate.
We can provide you with financing answers when it's time to make important renovations to your home.
Contact us soon to see how different home equity loans would work in your situation.
Sell for More
America's supply of properties for sale now is the highest in almost seven years, says the National Association of
Realtors (NAR). "Homebuyers should be delighted," adds NAR. "Choices are abundant and there is no pressure for a
hurried decision." But having more homes on the market means sellers must work harder to make their property
stand out. Sellers will have to adapt to our current normal market, after years of soaring demand for homes.
For the past few years sellers in some areas have typically priced their house at 15 percent above the previous year's market
value, notes NAR. But today NAR suggests buyers may want to price just five percent higher than prices were twelve
months ago. However, that still beats last year's rate of inflation. Buyers who are waiting for house prices to
fall will be disappointed in most regions of the U.S., NAR adds.
MAKE BUYERS CONFIDENT
One way sellers can attract positive attention is by having their home professionally inspected before putting
it on the market. You then can show potential buyers the inspection report, to assure them your house is
worth what you're asking for it.
Any defects found by the inspector can be remedied before putting the house on the market, which makes it
even more attractive. Some experts say that buyers try to negotiate $200 off the asking price for every $100 of repairs which a property needs.
We can help you obtain the funds for needed house maintenance and repairs - no matter whether you plan to sell your home soon, or enjoy it for many more years. Call us now to learn more about how you can make your home into everything it's meant to be.
Time to Fix Your Loan
People choosing a home loan generally are most concerned with what their monthly payment will be. If it's affordable,
then they go ahead with their purchase plans. In the past borrowers favored mortgages with fixed payments for 30 years.
But falling rates in recent years have encouraged buyers to choose low-cost adjustable-rate loans.
However, many owners will see their adjustable payments going up in the near future. Yet fixed-rate mortgages remain
attractive, since they've moved up less than adjustable rates have in the past two years.
MORE BILLS
Recently some owners have been surprised to find that rising house values have caused their property taxes to go up.
Higher fuel bills also have troubled owners. You don't want to be shocked with a big increase in your mortgage
payment at the same time. We're ready to help you find a mortgage solution that fits your needs today.
Together we'll consider your budget now, and review how your expenses and income should change in the future.
We'll also look at how long you plan to stay in your house before going over your options.
Don't put off this valuable financial planning exercise - call us soon. Home loan rates are expected to continue
rising, but it's possible to find ways to cope with those changes.
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