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How VA Loans Provide Service Members and Veterans with the American Dream

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Veterans Administration (VA) loans provide one of the most valuable benefits to those who have served in the United States military. It provides them with a path to homeownership, both while actively serving and after discharge. The program is similar to the Federal Housing Administration (FHA) loan program except it is open only to qualified veterans and provides more extensive borrower benefits. It is one of the few options for borrowers without a down payment that also provides relaxed underwriting standards.

Are you curious to know more about VA mortgage loans? Here is a list of the most frequently asked questions regarding this popular loan program.

What is a VA Home Loan?

A VA home loan is a loan that the government backs in case the borrower defaults. In cases where the borrower fails to make payments and the bank forecloses on the home, the VA reimburses the lender for most of its losses. Because the government backs the loan, lenders offer much more generous terms than available in the general mortgage market. Better terms include no down payment requirement, lower interest rates, acceptance of lower credit scores and lower waiting periods after life events like bankruptcy. VA home loans offer the unique benefit of no mortgage insurance requirement, though borrowers must pay a 2.15% funding fee, which can be financed.

How did the VA Home Loan Program Begin?

The U.S. Congress created the VA loan program in 1944 as part of the Servicemen’s Readjustment Act, also known as the GI Bill of Rights. The government created the GI Bill of Rights to help World War II veterans re-start their civilian lives and develop the post-war economy. In addition to the VA loan program, the bill also provided veterans with funding for post-secondary education, health care, and other important life benefits.

Who Qualifies for a VA Home Loan?

All military personnel and veterans with six months or more of active duty are eligible. Veterans with a dishonorable discharge are disqualified. Spouses of personnel who died during military service are also eligible. VA loans require no minimum credit score, though lenders often impose a minimum FICO requirement between 580 and 620. Borrowers with a previous bankruptcy or foreclosure must wait two years from the end of those events. If a previous foreclosure was a VA loan, in some cases the borrower needs to reimburse the government for losses before a new VA loan origination can take place.

How to get a VA Home Loan

The first step toward getting a VA loan is obtaining a Certificate of Eligibility (COE). The Veterans Administration issues COEs after it verifies the borrower’s eligibility. Applicants need to submit documentation of their military service to the VA. Alternatively, a VA loan qualified lender can obtain the COE on behalf of the borrower. Once the COE is issued, the borrower completes the mortgage application.

How to apply for a VA Home Loan

Since VA loans are issued by most mortgage companies across the country, borrowers can apply at any number of banks, mortgage brokers or credit unions. The USAA Credit Union specializes in VA loans and other financial products for servicemembers and veterans. Most mortgage brokers and banks also have departments and loan officers who specialize in VA mortgage loans. Borrowers can complete applications online and send in the documentation or seek the assistance of a loan officer in completing the application. Working with a loan officer is a good idea because they understand what’s needed for the application’s approval.

How does a VA Home Loan Work?

From the borrower’s perspective, a VA mortgage works like any other. The only difference is the easier qualification standards, no down payment option and no mortgage insurance requirement. VA loan limits range between $484,350 and $726,525, depending on housing values in the county where the property is located.

VA home loan requirements make it far easier for veterans and servicemembers to achieve the American dream. As a result, the program is immensely popular. Veteran home loan applications have increased by 370% since 2007, largely because credit standards for other types of loans were tightened since 2007. The VA loan program allows those who have served our country to still achieve home ownership despite the difficulties of the mortgage market. For over 70 years, the VA loan program has made millions of veterans proud homeowners.

Should the Buyer’s Agent Attend the Home Inspection

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A home inspection plays an important role in your home-buying process. By knowing the actual condition of the house that you’re buying, you’re able to reach an informed decision which can either be to move forward or to leave the deal. Curb appeal is one thing, but it’s what’s under the surface that counts. You can hire a contractor to quickly make a property look better on the surface, but what about the foundation, electrical, and plumbing? Those are all big unknowns that need to be addressed.

If you’re not there, you can’t ask questions about the unknowns your inspector uncovers.

It’s undeniably important that you not miss the inspection. Being physically present during the actual home inspection will allow you to familiarize yourself more with the property as well as raise any concerns you have about the property. But should your agent also attend the inspection? Absolutely YES!

You hired your agent to represent you throughout the home-buying process. This means that your agent should be present whenever needed, and that includes a home inspection. Even the seller’s agent should be present during the inspection to ensure that both sides are equally represented.

Here are the top 4 reasons why your agent should attend the home inspection:

1. Not all inspectors offer the same quality of work.

Just like realtors, home inspectors can offer amazing to terrible services. They’re only human and therefore are not exempt from making mistakes. However, your agent is your dedicated representative. Having said that, if an inspector is intentionally cutting corners or missing important details, that’s when your agent steps in on your behalf. And while most inspectors always give their best effort to adhere to the standards and requirements of their profession, not all do. That’s why it’s definitely important that you and your realtor are present during the inspection.

2. Your agent helps you make sense of inspection results.

If you’re like most homebuyers, you lack the expertise to analyze the results of the inspection. This is where your realtor should show due diligence by giving you insight and advice to aid you throughout the process. The results of the inspection can make or break a sale. So, it’s always best to have another set of eyes.

3. An agent must be able to make effective negotiations.

In addition, if your agent isn’t present during the actual inspection, effective negotiations just aren’t possible. Negotiation is one of the most important reasons you hire a realtor. A home inspection report will detail issues, minor and major, and that often requires a re-negotiation concerning the terms of the sale. When your realtor is present during the inspection, chances are the negotiation process goes much more smoothly.

4. Representing you as a client is part of a realtor’s job.

Homebuyers’ hire realtors to ensure they’re represented professionally throughout the entire process, and not just during the negotiation process. This means your agent is there from the very beginning all the way through the day you close on your new home. The professional advice of a realtor is not only much needed and deserved, but it’s also crucial to the home-buying process.

Finding the best realtor and the right inspector can be a bit hard, but it’s a necessary step for you to get the most out of your investment. This is why you shouldn’t settle for anything less than the best from your realtor, as well as from your home inspector.

 

What are the best questions to ask during a home inspection?

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If you’re in the process of buying a new home, get as much information as you can about the property. This is why a professional home inspection is very important and crucial. Homebuyers often ask if they have to be present during the home inspection. And the answer is a big yes. Though it’s not really required, it’s very important that you be physically present during the entire inspection process.

Buying a home is probably the biggest investment you’ll ever make, so you should be confident that you’re doing it right, and asking questions during the inspection will help you make an informed decision on how to move forward. Below are some questions to ask your home inspector on inspection day.

 

1. What credentials do you have?

It’s important to make sure that you’re hiring the right professional to do the home inspection. And asking for their credentials is one of the best ways to do it.

      • What professional organizations do they belong to and what training and qualifications do these organizations require?
      • Ask for certifications.
      • Ask for years of experience.

A reliable and professional home inspector should be knowledgeable about any red flags found during an inspection. Moreover, they should be able to answer all of your questions and give you appropriate advice. So, do your research and hire the right person that can do the job right.

2. What is the condition of the roof?

Ask your home inspector about the condition of the roof. Know if there are any buckling or missing shingles. Ask about the eavestrough and if there’s an accumulation of asphalt granules in the gutters. To avoid an expensive roof replacement, ask the inspector if there are any signs of major wear and tear or past storm damage. If the inspector indicates that there’s a need to replace the roof, ask the seller to replace it or negotiate the price to compensate for the replacement if you’ll have to do it after closing.

3. How well-insulated is the home?

How well the home has been insulated will have a significant impact on your heating and cooling costs. The home’s attic should be well insulated to prevent heat from escaping the home. The insulation rate should be at least an R-value of 60. R-value refers to the capacity of an insulating material to resist heat flow. The higher the R-value, the better the insulating capacity is.

You also need to ask your inspector about the type of insulation used. Vermiculite insulation contains asbestos which can pose a serious health risk if disturbed. The attic should be properly ventilated and the basement should also be insulated. Proper insulation and ventilation throughout the entire home is important in order to prevent mold and mildew growth.

4. How is the electrical system?

To ensure your home is safe from electrical fires, your inspector checks the condition of the home’s electrical wiring. It should be up to code, with no worn, damaged, frayed, or exposed wiring. And if any updates were done, were they done by a licensed electrician? You also need to find out if the electrical is knob-and-tube, as some insurance companies will not insure the house or will they will charge a higher premium. Additionally, you should ask if there are any outlets that are close to water sources like the kitchen, bathrooms, garage, and outdoor locations. Asking these questions will give you a pretty solid idea how safe the electrical system really is.

5. How is the plumbing?

Your home inspector will evaluate drains, water heaters, pipes, water pressure, and test water temperatures to see how well each works. During the inspection, find out if any galvanized-steel piping was used. Galvanized-steel is known to rust, affecting water pressure, and worse they can rupture. Also, remember to ask your inspector if the home has any lead pipes. In older homes the use of lead pipes is fairly common. Over time, lead pipes wear down and can contaminate the water supply.

6. How solid is the foundation of the house?

The inspector will check how solid the home’s foundation is, and also check for any cracks. Keep in mind, however, not all cracks are serious. If any cracks are found in the foundation, ask the inspector what type they are and their sizes. If a dime can fit into a crack, you may want to consider getting a second opinion from a foundation specialist or structural engineer.

7. What is the condition if the HVAC system?

The home’s heating, ventilation, and air-conditioning system (HVAC) will be inspected to ensure they’re fully functional. During the inspection, ask the age of the AC unit, as well as how long it should be expected to last. Lastly, ask if the furnace has been properly serviced and maintained.

8. How is the drainage?

Join the inspector during a walk around the home’s exterior. The ground should slope away from the home’s foundation. If you notice any faulty grading, ask your inspector if this is something you should be concerned about. Any downspouts should be intact and directed away from the home’s foundation. Faulty grading and improper drainage can lead to costly foundation issues in the future.

9. Are there any signs of pest infestations?

If your inspector comes across mouse droppings or evidence of other pests, such as termites, it’s good to know if there’s a suspected infestation. Pests can cause significant damage to homes and can also pose a health risk.

10.What’s next?

Once your home inspection is complete you should receive a final detailed report. Once you receive the report, thoroughly read through the report and the results of the home inspection. If you have any questions or concerns about the report, contact your inspector. Asking questions is the best way to make an informed decision. It’s your right and obligation to do so. Best wishes in your quest to find that dream home!

6 Best Roofing Materials Ranked by Durability and Cost

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Written By Lindsey Joy

Choosing a new roof? Or currently building your dream home? Whatever it may be, you’re probably looking for a roofing material that’s going to protect your home without breaking the bank.

In order to help you make an informed decision, we ranked the 6 best roofing materials based on the most important factors that most homeowners consider: durability and cost.

#6 Asphalt Shingles

Longevity: 15-30 years

This roofing material is by far the most popular roofing material because of its cost-effectiveness. But as the saying goes, you get what you pay for. It’s a good idea to research all the available option first, even if cost is a major concern for you.

It is important that you look for shingles that have a decent hail rating, a good level of impact resistance as well as overall durability. Note that roofing manufacturers aren’t legally required to report their hail rating. But quality manufacturers are more likely to report this data. So, if you don’t see a hail rating, it isn’t a good sign.

One downside of asphalt shingles is that it’s a petroleum-based material which means it isn’t the most sustainable roofing material option available. However, they are recyclable. To ensure they don’t end up in a landfill, look for a local shingle recycling center.

#5 Wooden Shingles and Shakes

Longevity: 30-50 years

Roofing materials made of wood are typically made of fire-resistant woods such as cedar or redwood. But it is important to note that they aren’t fireproof.  While it is true that they do last longer than asphalt shingles, they are not as durable. Wood shingles and shakes are prone to cracking. As with asphalt shingles, you should keep an eye out for their hail rating.

#4 Metal

Longevity: 30-50 years

Common materials used are steel, copper, zinc alloy, or aluminum. Metal roofs are slightly more expensive than asphalt or wood, but are significantly more durable. Some other advantages of choosing a metal roof are:

  • They are impact resistant
  • Needs less maintenance
  • Very energy-efficient
  • Made from recyclable materials and are also 100% recyclable

#3 Plastic Polymer

Longevity: 50 years or so

Plastic polymers are incredibly durable roofing materials that look like slate or wood shingles but require significantly less maintenance. This type of roofing material has high hail ratings and is very energy-efficient. But if you’re after sustainability, then you might want to think twice before choosing this roofing material. Since plastics are built to last, this makes them quite unsustainable. However, you may find many manufacturers that use recycled materials.

#2 Slate

Longevity: 75 to 150 years

Known as the oldest roofing material, slate roofing is quite expensive but it stands out from the competition for reasons as follows:

  • Fireproof
  • Virtually invincible in most extreme weather conditions
  • Energy-efficient

Slate roofing is also 100% sustainable since it is a naturally occurring material, therefore, no toxins are used during the manufacturing process.

#1 Solar Glass

Longevity: Lifetime

Solar glass comes with a lifetime tile warranty and an extremely high hail rating. Overall, this roofing type is the best bet for homeowners that are more concerned with durability over cost. Solar glass roofing is also very energy efficient. And although it’s fairly expensive to install, depending on where you live, you may qualify for a tax credit to offset the cost. Lastly, solar glass roofing is the most sustainable roofing material on our list due to the fact that it generates its own energy.

 

If you have further concerns about other types of roofing materials for your home, give us a call or check out the rest of our blog.

Obtaining and Maintaining Tax Exempt Status

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You’ve finally incorporated your nonprofit organization. Great! Obtaining a federal tax-exempt status is a critical and logical next step when forming a nonprofit organization. And obtaining a tax-exempt status comes with significant benefits. Some of those benefits include federal, state and local tax exemption, the ability to receive donations, qualifying for special grants and even government funding. Obtaining a non-profit status is not extremely difficult, but maintaining it is no easy task. There’s a lot of issues and opportunities to consider that you probably aren’t aware of yet. Today, we’re going to explain how to legally obtain and maintain your tax-exempt status with the help of a qualified attorney.

Obtaining Your Tax-Exempt Status

To apply for tax-exempt status, you have to complete the IRS Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. Completing this form can be a complicated task due to the legal and tax complexities that must be understood. This is why hiring an attorney is a great idea.

You should file the Application for Recognition of Exemption Under Section 501(c)(3) within 27 months of the date you file your nonprofit Articles of Incorporation. If you file within this time period, all of the donations you received from the date of incorporation on are now tax deductible!!! If you file Form 1023 more than 27 months after incorporating without reasonable cause for the delay, your tax-exempt status will begin as of the postmark date on the IRS Form 1023. Most organizations pay the standard $850 filing fee when sending their application to the IRS, but so that you’re aware, organizations planning for less than $40,000 in gross revenue during their first four years of operations can pay a reduced filing fee of $400.

Maintaining Your Tax-Exempt Status

Once your nonprofit receives its tax-exempt status, there are some important steps that an organization must take to retain that status. Most tax-exempt nonprofits are required to file annual information returns with the IRS. The nonprofit will file either a Form 990, 990-EZ, or 990-N, depending on its gross receipts and total assets. However, there are some organizations that are not required to file. For instance, a church does not have a filing requirement. Also, if your nonprofit is required to file an information return for three consecutive years, and you fail to do so, the IRS will revoke your nonprofit’s tax exempt status.

If you are receiving donations from individuals or businesses, your nonprofit must provide a written receipt, and also register and file annual reports with the state in which it is incorporated. A donor should be given a written acknowledgement of any gift valued more than $250 in order to take a tax deduction on their own taxes. Additionally, your nonprofit must provide documentation that identifies the fair market value of any goods and services that were donated.

Lastly, if you plan on keeping your tax exempt status, your organization’s activities must serve the public and not your private interests.  Avoid engaging in lobbying, and refrain from all political campaign activity, or you may face the removal of your tax exempt status.

Overall, just obtaining and maintaining a tax exempt status can be extremely time consuming, but with our help, your nonprofit will be on it’s way to success in no time!

8 biggest mistakes first-time homebuyers make

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Buying a new home is undeniably the most exciting and rewarding experience of a lifetime, especially if it’s your first time. However, it’s important that you keep track of what’s going on during the purchasing process to avoid mistakes. Overwhelmed buyers are more prone to making mistakes and missing the important details during the home-buying process. So, to help you avoid making those mistakes, we’ve compiled a list of a few of the most common mistakes.

Too focused on the idea of buying.

When you have the capacity to buy a new home, it doesn’t always mean that you should jump into home ownership head first. Owning a new home is almost everyone’s dream. However, there are actually some huge financial advantages associated with renting a home. As you know, home ownership comes with quite a number of liabilities. Paying yearly property taxes, those costly and sometimes untimely repairs, and utility costs, just to name a few. On the other hand, if you’re renting, you’ll only be concerned with your monthly rent payment, as it most always includes your major utility costs. Moreover, you won’t be responsible for the property management. So, before moving forward with a home purchase, consider all your options first.

Overrating the home valuation.

Home valuation is crucial, as it’s a solid way to get an estimate of how valuable a property actually is. Unfortunately, some of the best known tools used to estimate property value aren’t as accurate as you may think. There are many factors that contribute to a property’s worth, reaching far beyond its financial value. Factors such as location, the state, and future of its neighborhood, as well as your personal attachment to the property all come into play.

Ignoring the market trends.

It’s important to keep in mind that the housing market is in a state of constant change, and that means prices rise and fall due to the current market trends. So if you’re buying at a particularly high time, you could end up losing money on your investment in the long run. However, that doesn’t mean you can only buy a home during a particularly low period, but it’s a good idea to keep up with what’s happening in the housing market.

Not getting a buyer’s agent.

More often than not, a seller will hire a agent to increase their chances of selling their home at a good price. And buyers should do the same! Having your own agent can help you find your ideal home and secure a great deal. This small step can make your search for the right home a breeze.

Not conducting a professional home inspection.

Getting a home inspection is a must. Even a house that looks great on the outside still needs to be inspected because that doesn’t necessarily mean it’s in perfect shape. It’s important to know exactly what improvements are due in the near future and what issues require immediate repairs. A home inspection can actually save you money on the cost of your home and on future repairs.

Allowing emotions to rule their decisions.

It’s common for first-time home buyers to let their emotions enter the equation. You get positive or negative vibes from every home you visit. You’ll even imagine yourself living in a home that you visited. This is a good thing to some extent, but allowing your emotions to completely rule your decisions can be a huge mistake. Don’t risk passing up a logical choice or making a premature jump into an uninformed choice.

Being too picky.

It’s certainly not a good idea to go with the first house you see, and it’s extremely important to set specific goals on what you want in a home. However, keep the standards realistic, and remember that a “perfect” house probably doesn’t exist. While it’s important to take your time in choosing the right home, being too picky may cause you to miss out on some great opportunities.

Not accounting for other expenses.

Finding a mortgage calculator to help you estimate the regular monthly costs of a property is quite easy. Generally, most lending companies provide their own version of this essential tool. It’s a great way to approximate how much you can afford based on your current salary and help you project a long-term budget, but it doesn’t factor in the other expenses that come with owning a home such as utilities, regular maintenance, and home improvements. So, be sure to properly account for all possible expenses to avoid going over budget.

 

There are so many mistakes that home buyers can commit or omit depending on their individual situation, so it’s important to get as much information as you can before making a purchase. If you’re considering the purchase of a new home and need a professional home inspection, ask your agent to recommend a local professional in your area.