Qualify for a VA Home Loan
A seller may offer a variety of tempting concessions to the buyer to make the sale more attractive, but when it comes to a VA guaranteed home loan, there are limits to how far the seller can go. Sellers can do a lot on behalf of the buyer—VA rules allow them to prepay the buyer's funding fee for taking out a VA mortgage, the seller can pay off credit balances or even credit judgments against the buyer in order to close the deal. But the Department of Veterans Affairs knows some buyers could be tempted to purchase more home than they can afford based on overly generous concessions like these. According to the VA; "In extreme cases, the concessions may entice unwary and unqualified veterans into home mortgages they cannot afford. The concessions may disguise the veteran's inability to qualify for the loan."
That's why the VA imposes a cap on seller concessions. The seller can't offer anything that exceeds 4% of the "established reasonable value of the property." A concession or set of concessions (an important distinction) that goes above 4% of the property's value is unacceptable to the VA.
For example--under VA rules, paying the buyer's closing costs is not considered a concession, nor is paying discount points typical for the housing market in question. But if the buyer pays points above and beyond what's typical for the market, payment of the additional points IS considered a seller's concession.
Sellers can do a lot for the buyer when it comes to these concessions, but knowing what the VA defines as a concession (paying the VA funding fee, paying points above the market's norms, gifts, temporary interest rate buydowns, etc) and what the VA doesn't regard as a concession (paying closing costs or points appropriate to the market) goes a long way toward calculating their value.
Mortgage rates recently hit "all-time record lows," says mortgage investment firm Freddie Mac. Homebuyers and owners interested in refinancing are finding now is a great time of opportunity. Monthly payments on a $250,000 mortgage earlier this summer were $111 lower than a year ago, according to rate data compiled by Freddie Mac. A 30-year mortgage also guarantees that your payments won't change as long as you own your home.
Talk with us soon to see if refinancing or purchasing now would be to your advantage. We'll show you how today's low rates fit into your budget as you pursue your housing dreams. Some owners who purchased with a jumbo mortgage may find they now can move into a lower-rate conforming loan. We'll review your options with you, so that you can make an informed borrowing choice. No one knows how long today's rates will be available. Real estate prices also could increase in the future – and that will make purchasing more expensive.
It's crucial to take action soon in order to gain valuable savings. You can rely on us to work in your best interests throughout the mortgage process.
Housing truly is a major foundation of our economy. And recovery in the housing sector will help the U.S. economy as a whole, says Harvard University's Joint Center for Housing Studies. Real estate produces jobs for many Americans who build and sell homes. But housing's positive effect doesn't stop there. Homes are filled with appliances and furnishings – and providing those creates employment opportunities.
Owners also must regularly maintain and update their properties. Since 1947 housing-related activities have made up more than 20 percent of America's economy, notes the Joint Center. A weakened housing market depresses consumer spending, which is the main driver of our nation's economy. "A return to house price appreciation would likely help spark a rebound in consumer spending," adds Harvard University.
Harvard's Joint Center explains that housing typically has "contributed significantly to both pushing the economy into recession and lifting it out." A stronger housing sector is likely to stimulate overall economic growth.
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"Today the worst in the job market appears to have passed," says Lawrence Yun, chief economist at the National Association of Realtors (NAR). He forecasts that employment will grow by roughly one million new jobs this year. Next year two million more Americans will be working compared to now, NAR adds. Continued job creation will make it easier for households to purchase their own home soon.
"If jobs come back as expected," Yun adds, "the pace of home sales should pick up later this year and reach a sustainable level of activity given very favorable affordability conditions." Home prices also are expected to edge up this year, NAR predicts. Yet national economic statistics aren't that important when you're thinking about moving. Home prices and job availability in the area where you want to live will do more to affect your purchase than countrywide conditions will.
So it's important to look at actual houses you'd like to live in to determine if buying now is a wise choice. We'll show you how affordable your monthly payments would be if you moved now. Call us right away to seize the opportunities available in our local real estate market. Today's combination of attractive property prices and great mortgage rates make shopping for homes easier than it's been for years.
Many experts believe real estate values are in a process of bottoming out now. "House prices are improving," explains mortgage investment firm Freddie Mac. Hesitating to act can mean we miss big opportunities. Although no one knows exactly when house prices will reach their low points, it's almost certain that home values will be appreciably higher a few years from now. Yet concern about the future can keep us from moving ahead with a smart purchase.
Today mortgage rates also are at their lowest levels in decades. Great rates and attractive house prices allow you to move into a terrific home soon. We won't enjoy these same positive conditions in the future.
However, many consumers are waiting – rather than investigating the benefits of taking action. Some don't know they can buy a house on advantageous terms today. Others don't feel comfortable making important decisions now, and are staying on the sidelines. A good first step can be to review your options with a professional you trust. Tell us your housing goals, and we'll work on your behalf to make them real!
No single approach to buying a house works for everyone. For example, you may need to raise funds for a down payment. Buyers can boost their savings by selling a vehicle which isn't used much. Others may consider using some of their retirement funds to make a house purchase possible. You can take out as much as $10,000 from a traditional IRA without an early-withdrawal penalty, as long as the money is used within 120 days to buy a home. Some employers also will let you borrow up to $50,000 from your 401(k) account. You can get the money you need without paying income tax or penalties on those funds. We'll work with you to develop a strategy which suits your needs and resources, and lets you reach your objectives. Call us soon to review your current home buying options.
We're using these social media tools to keep the veteran community informed about a variety of issues. We'll be highlighting changes to veteran benefits and will keep our fans updated on relevant stories and articles.
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