VA Loan / Veteran Mortgage News
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SEPTEMBER 2009
Popular VA Loan Blog Is Excellent Resource
The underwriters at VALoans.com recently created a
VA Loan Blog in order to answer many questions our visitors sent in for clarification concerning their VA home loans. VALoans.com is one of a select group of lenders who were granted VA Automatic status from the Department of Veterans Affairs who have on staff underwriters with LAPP Authority to allow for faster, better, and easier appraisals. Here are the top ten items which can be found at
http://www.valoans.com/blog.
- What To Submit for Military Statement of Service Request
- VA Loan Lenders Can Increase Appraisals by up to 5%
- Veteran's Real Allowable Closing Fees and Charges
- Proof of Income For Military Service Members
- VA Eligibility On Short Sales Involving 2nd Liens
- VA Home Loans 101 - Free Download - No Registration Required
- Co-Signors on VA Loans
- Substitution of VA Eligibility
- VA Home Loan Assumptions
- Are Home Eligibility Benefits Transferrable?
Our underwriters will continue to write about relevant questions and topics that directly relate to the VA loan underwriting process.
Easier to Buy
Housing affordability has gained significantly over the past two years due to attractive mortgage rates and lower home values in many areas. If you were looking at houses previously and grew discouraged, you may be surprised at the values available now.
But higher mortgage rates in the future would cause monthly payments to rise. By acting soon you can lock in affordable payments on a home you'll love for years.
Deciding where to buy always is important, but especially so now. Today we can see that some new developments built far from city centers in recent years were speculative.
Even though their prices may have fallen, those neighborhoods are struggling to gain owners. Commuting costs also are greater in distant suburbs.
Purchasing closer in often means buying an older property, however. Yet the stability of those areas typically has kept prices closer to their peaks.
New Benefits for Real Estate
A major new law designed to stabilize the housing markets came into effect this summer. One purpose of the legislation was to make credit more-readily available to Americans. This was accomplished by reinforcing Fannie Mae and Freddie Mac, two government-chartered firms which purchase mortgages from local lenders.
Specific measures also were spelled out to help both existing homeowners and potential buyers. Here are some of those provisions:
- First-time homebuyers can receive a $7,500 tax credit if they purchase between April 8, 2008 and June 30, 2009. But borrowers will have to repay the credit amount over the following 15 years. "First-time buyers" are defined as households which have not owned their principal residence during the previous three years.
- Homeowners who don't itemize deductions on their income tax returns can still deduct property taxes. Write-offs can reach $500 for singles and $1,000 for married couples.
- Starting in October 2008 a three-year program to help homeowners refinance into affordable mortgages begins. An estimated 400,000 borrowers whose payments are above 31 percent of their income will be able to obtain a fixed-rate mortgage as a result.
- Fannie Mae and Freddie Mac now have higher loan limit amounts. These limits vary by region, since they're based on an area's median home price.
But until the end of this year they can reach $729,750 in some high-cost neighborhoods. Borrowers thus can obtain lower rates than they could on a traditional "jumbo" mortgage.
These are just some of the major provisions of the new housing bill. Contact us to find out more about how this legislation could benefit you, or someone you care about.
A Home You Can Afford
Finding ways to make a home purchase more affordable now takes effort. But the rewards can be great when you're shopping for an ideal house, but have a budget to stick to. Here are suggestions to go over -
- Look at smaller homes. You may not require as much living space as you think. Many of us live in houses with rooms which are rarely used. Calculate the essential amount of space you need in a home, and see how affordable houses of that size are. Or you may buy a smaller home now, and then add a room in the future.
- Buy a property with negative features. A house with an odd layout won't appeal to many buyers. But you can reap big savings by purchasing a home which others wouldn't consider. Also look at properties that have been neglected. A professional home inspection can tell you if a house has major defects which would be difficult to fix. But a residence which just needs updating can provide enjoyable projects for a thrifty buyer. You'll enjoy transforming your house, and every upgrade will add to its value.
- Become a landlord. Renting out a bedroom can provide income which helps you buy the house you want. Many successful real estate investors got started by purchasing a duplex and renting out half of it.
We'll help you make a purchase by offering ideas for improving your credit score. You'll then be able to gain financing on better terms. Mortgage rates remain at historic lows today, and home prices have dropped in many areas. You may be surprised at how easy it is to move into a house you'll love for years. Being able to take action once you spot a bargain is crucial. We'll pre-approve you for a home loan, so you'll be ready to make an offer when you locate the real estate opportunity you're searching for.
New Help
A housing law passed this summer means "a housing recovery is on its way," predicts Lawrence Yun, chief economist at the National Association of Realtors (NAR).
"This legislation will go a long way to help stabilize the housing market and make the dream of homeownership more attainable for many Americans," he adds. "In addition, more families will be able to refinance into safer, more affordable mortgages."
One of the premier features of the law is a tax credit of up to $7,500 offered to first-time homebuyers. However, to qualify for the credit you must purchase by June 30, 2009.
Close to three million Americans will take advantage of this tax break before then, NAR forecasts. All that activity will "be a big shot in the arm" for housing, adds Yun.
NAR predicts average home prices will begin moving up again towards the end of this year. Talk with us right away if you're considering the purchase of a first-time or move-up property.
Do the Math
A primary question is whether you should rent or buy a home. Answer this by comparing the cost of renting against your monthly mortgage payments on a similar property.
You'll need to adjust your mortgage payments by subtracting tax deductions you'll receive for mortgage interest, property tax, and possibly for mortgage insurance premiums. But add back in the estimated cost of maintaining your home.
Next see how owning works out over time. Remember that rent costs typically go up every year, while fixed-rate mortgage payments stay the same.
Also calculate how your equity will increase as your house's value goes up. Compare those gains to what you'd expect to receive by investing the difference between rent and mortgage payments in stocks or mutual funds.
Most homeowners find the gains they achieve grow slowly but steadily over time. That's why many Americans say that buying their first home was a step which affected the rest of their life.
Purchasing also enhances your daily life, by giving you more freedom to live as you wish. But it's best to decide whether you want to buy or rent after looking at the full picture of emotional and practical benefits, as well as financial realities.
Affordable mortgage payments are crucial to gaining the long-term advantages of homeownership. We can help you decide whether purchasing now is in your best interest. Contact us soon to figure the costs and benefits of buying a house.
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