Home Loans Archives | Page 3 of 3

Jul 08

Two Story Colonial House with American Flag

What Do VA Home Loans Offer Veterans?

By Social Eyes Marketing | Financing, Home Loans, VA Loans | No Comments

Buying a home is a careful, considerate process. In addition to the measures taken to keep the process controlled, there is also the added stress of financial burden and complicated loaning processes. Although, there are alternatives for home loans! On top of that, the veteran home loan experience has actually been simplified and organized into a very cohesive, flexible system.

VA home loans are not offered by every institution. However, it is because of this that the many institutions offering VA home loans are in competition with one another. This gives veterans a spectrum of loan options with adjustable features to suit their needs.

Unfortunately, a small minority of veterans are taking advantage of these loan opportunities. Loan institutions averaged 431 veteran home loans during the 2018 Fiscal Year. Of the 610,512 loans offered among all lending institutions in 2018, the average loan was $259,725 but almost half of these institutions offered more than this average.

While 600,000+ may seem like an exceedingly large amount of participating veterans, there are still an overwhelming amount of veterans not looking into VA lending options during their home loan search. This could be a result of a lack of awareness or even misconceptions about these lending alternatives. Below, we have listed some of the unmatched benefits that come with VA home loans.

Qualifications for VA Loans

Much like any lending experience, the qualification process tends to be an extensive one. For veteran home loans, there are more flexible terms.

Veterans and active military members are given a little more leniency as far as credit scores are concerned. The threshold for credit is much more permitting.

Ultimately, those interested in VA home loans just need to complete a Certificate of Eligibility (COE) and wait for approval to continue with the lending process. Speaking with your lending officer or representative about what documents are required for their specific institution will get the ball rolling much quicker.

Down Payment

There is no down payment required for qualifying veterans or active military service people. Down payments are easily of the biggest concerns for homebuyers. They tend to put stress on the buyer with a hefty chunk of change that is immediately absorbed. Veterans and active military members, however, do not need to be concerned with this because of the safety net that VA home loans provide. As long as the loan requirements are met, they are able to start a life in a new home now – not after years of saving up for just the down payment.

Interest Rates

There are homebuyers not pressured by the down payment element of the home buying process that exists in today’s world but, typically, these buyers do bare the financial weight of high-interest rates. For military members, interest rates are also protected. While there is not a set interest rate cap, institutions generally keep VA home loan rates much lower than traditional or FHA loans.

Foreclosure Protection

There are clearly some preparatory benefits but foreclosure measures are often an afterthought for home buyers. No one anticipates for hard times to hit but they do happen occasionally. VA home loans also provide homeowners with the peace of mind that there is a secondary security measure for them to fall back on when the unexpected becomes reality.

Fine Print

There are quite a few fine print elements of every home loan that come up as surprises to potential home buyers. Fortunately enough, many of these are simplified or completed excluded in veteran home loans.

Most home loans lenders use the following measures as a safeguard for the lender, borrower, or both: mortgage insurance, uncapped closing costs, and prepayment penalties. For qualified applicants, none of these apply because veteran borrowers are not expected to pay for mortgage insurance, the VA actually restricts what lenders can charge in closing costs, and veteran borrowers are also not penalized for early repayment of their loans. All of these act as support for veterans and active military members in order to offer a more simplified, less expensive loan experience.

Clearly, there are many details even in veteran home loans but the general process has been streamlined as much as possible. Speaking with loan representatives with as much experience as possible will keep you informed and updated about any changes and options.

Jun 24

Why VA Loan Refinances Are Some Of The Best Deals Around

By Social Eyes Marketing | Financing, Home Loans, VA Loans | No Comments

The benefits of Veterans Administration (VA) home loans don’t stop with the purchase of a property. Veterans and service members have access to streamlined refinancing that can save them money every month and provide cash for home improvements, debt consolidation or major purchases. Veterans who have conventional loans can even refinance into a VA loan to take advantage of the benefits they earned.
Are you considering a VA loan refinance? Then you need to know the answers to the frequently asked questions below.

What is Refinancing?

Refinancing a mortgage simply means paying off an existing mortgage using a new one. Since time and expense are involved in a mortgage refinance, there must be a benefit to the borrower. Common benefits of refinancing include a lower interest rate, a lower monthly payment, cash out for home improvements and cash out to pay off higher interest debts. Closing costs can be substantial – with the exception of VA home loan refinances. The VA’s streamlined process allows veterans and service members to refinance with little cost or inconvenience.

What is VA Loan Refinancing?

Refinancing VA loans provides borrowers with the opportunity to save money without paying heavy closing costs. The cost savings result from the streamlined process. The streamlined process begins with the borrower completing a pre-qualification application. This application verifies the borrower’s eligibility for a streamlined process and determines if the refinance has a benefit to the borrower. If the loan has no benefit, the application process stops. The prequalification also determines if the borrower has sufficient income to afford the new loan, which is particularly important in cash-out refinances.
How does the VA Loan Refinancing Application Process Work?
The VA streamlined refinance program serves only those who previously qualified for a VA loan, so the process proceeds quickly with little paperwork. Most applications require no appraisal, which saves time and money while increasing the chances of approval. The loan officer will complete the application and collect needed documents, including driver’s license, proof of social security number, homeowners insurance and the current note. The borrower signs the legally required disclosures and the application process is complete. Approvals generally take about two weeks.

What is an IRRRL VA Refinance?

An interest rate reduction refinance loan (IRRRL) refinance provides veterans and service members the opportunity to refinance their VA loan into another VA loan at a lower interest rate. IRRRL refinances become popular when interest rates decline. In choosing whether to proceed with an IRRRL refinance, borrowers calculate the savings each month and compare it to the costs. If the time it takes for the savings to outweigh the costs is shorter than the time the borrower plans to stay in the home than the IRRRL provides substantial long-term savings.

What is a Cash out Refinance VA Loan?

The VA allows cash-out loans of up to 90% of the home’s value. For example, if a home’s value stood at $100,000 and the loan balance plus refinance fees came to $80,000, then the borrower could cash out a maximum of $10,000. Cash-out refinances work best when the funds are deployed for home improvements or to pay off much higher interest debt, such as credit cards. Home improvements increase the value of the property, so the borrower regains the equity once improvements are completed. When used to pay off high-interest credit cards, the borrower saves on interest payments and reduces overall debt far faster than without using the cash-out refinance option.

Refinancing into a VA Loan

Qualified veterans who have conventional loans are often surprised at how much money they can save by refinancing into a VA loan. VA loan interest rates are very competitive, and the refinance fees are much lower than conventional loan programs. As a result, all veterans with conventional loans should compare refinancing VA loan against a conventional refinance.
The VA loan program has helped millions of military and veteran families achieve homeownership. By taking advantage of refinance options, veterans can gain even more benefits. VA loan refinances provide veterans with a fantastic opportunity to reduce expenses, make home improvements and manage debt for a financially secure future.

Jan 25

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

By Social Eyes Marketing | Home Loans, Home Renovation | No Comments

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!