VA Loan / Veteran Mortgage News

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JULY 2006

Veterans Housing Opportunity and Benefits Act of 2006

On June 15th, 2006, the President signed P.L. 109-233, the Veterans Housing Opportunity and Benefits Act of 2006. Here are the benefit changes that would effect a VA home loan.

Hybrid Adjustable Rate Mortgages
(1) The law removed the current one percentage point restriction to subsequent annual adjustments to interest rates on hybrid adjustable rate mortgages with an initial fixed-period of 5 years or more.

(2) The provision will not effect existing Hybrid Arms made prior to the Act.

The entire Act can be seen at http://www.homeloans.va.gov/new.htm

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VA Cancels Free Credit Monitoring Offer

The Department of Veterans Affairs has decided not to offer free credit-monitoring services to veterans whose personal data could have been compromised when a laptop computer and hard drive was stolen from a VA employee's home. The free credit monitoring was originally offered to veterans whose personal information was stolen, but has been withdrawn after the equipment with the data was recovered and the FBI concluded that the information was not compromised.

White House Budget Director Rob Portman told House Speaker Dennis Hastert that he was canceling his office's request from last month for $160.5 million in funding for the Department of Veterans Affairs (VA) to give millions of veterans and active-duty troops one year of free credit monitoring.

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Choose Advisors Carefully

Buying a home is by far the largest purchase most people ever make. It's important to work with professionals you trust during the process, to insure you get the results you want.

Someone who has successfully completed many real estate transactions knows the potential pitfalls, and can lead you past them. Here are some problems which buyers have encountered recently, according to news reports:

• Buyers of new homes frequently are encouraged by the builder to use their in-house mortgage lender. Often they'll be offered "free" upgrades or closing cost discounts. Yet some buyers have found they wind up paying higher interest rates when accepting these deals. At times they don't discover that until they're ready to sign the final papers at closing.
  
  
• Purchase offers sometimes are used just to encourage still-higher offers from other prospective buyers. Instead of the seller responding directly to the people making the offer, that offer is used to "shop" for a buyer willing to pay more.
  
  
• Buyers at times are unaware who is working for them in a transaction, and who is being paid by the seller. Telling an agent working for the seller that you're willing to raise your first offer means the seller will counter-offer at a higher price.
  
  
• Appraisals aren't always accurate, so you shouldn't rely solely on the appraised value to determine what a property is worth. Additionally, some sellers market their home for a short period at an inflated price, so they then can advertise a large price reduction. Look at recent sale prices of houses you know are similar to the home you want before making an offer. It's also best to have several attractive homes to choose from, so you don't feel you must come up with the winning bid on a specific residence.
  
  
• Inspections must be done thoroughly to insure that your house doesn't have structural damage or pests. Take the time to locate an experienced home inspector.
  
  

Our professional goal is to make buying a great house as simple as possible for you. We'll invite you to contact past clients of ours who can tell you how smoothly their home purchase went.

You then can count on us to help you obtain financing that suits your unique needs. We'll review several loan options with you, so that you can make an informed decision.

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Solve Money Problems

A job loss or unexpected medical bills can be tough blows, both emotionally and financially. Families often will dip into their savings, and then start charging up their credit cards in order to handle everyday expenses during difficult times. Often their bills are out of control just at the point when their lives are starting to come together again. Once a new job has been found, the household may be facing demands from bill collectors that are impossible to satisfy. Yet it's possible to get a fresh start. Here are some ideas to consider:

• Contact your mortgage loan servicer immediately when you experience financial difficulties. Your servicer is the company that receives your monthly payments.
  
  Their interest is in helping you stay in your home - but the more time they have to work with, the better solution they can offer. Your servicer may agree to let you reduce or even skip mortgage payments for several months.
  
  Afterwards they may modify the terms of your loan or set up a plan that lets you make up those missed payments over time. Unfortunately, most homeowners aren't aware that lenders offer these important services.
  
  
• If credit card or other bills are your concern, you can use your built-up home equity to pay them off immediately. A low-rate, tax-deductible home equity loan then can give you affordable monthly payments after satisfying those debts.
  
  

Your financial situation may not be as impossible as it seems. Exploring your options now will help you find a lasting solution. And finding answers to a tough money situation will take a lot of pressure off you.

Contact us for more information on these ideas. Our job isn't just to help you buy a home - we also work hard to help you stay in your house.

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Today's Healthy Market

Average home values have gone up more than 57 percent over the last five years, states a recent government report. A house purchased in 2001 for $200,000 typically would be worth $314,560 today.

But after several years of rapid gains, home price increases are returning to normal levels. In 2006 the National Association of Realtors forecasts prices will go up 5.3 percent.

Higher interest rates and fewer sales are keeping the market from overheating now. However, most economists don't predict that values will drop. Generally that occurs only if there's an economic recession, and homeowners lose their jobs.

A market slowdown means some owners simply will stay in their homes if they don't have a strong need to sell. Slower appreciation isn't a problem for most, since homes they'll consider purchasing in the future will be going up in value at the same rate.

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A Smart Goal

Right now Americans are benefiting from healthy growth in jobs and incomes. Mortgage interest rates also remain attractive, since inflation is under control. Buying a house now could be a smart long-term strategy. Today's prices don't seem inexpensive - but in a few years they might look like great values. We've never met anyone who said they wished they had waited to make a home purchase. Let us show you how easy it can be to take that step now.br>

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