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October 8, 2012

VA Loan Program Ensures Zero Down Home Financing for Military Borrowers

Category: VA,VA Home Loan News – admin – 5:21 pm

The Department of Veterans Affairs guarantees special home loans for borrowers that have an affiliation with the United States Armed Forces. The VA loan program is unique because they provide military vets home loans with zero down-payments required. For example, the Federal Housing Administration insures the most popular program for first time home buyers but the borrower must come up with a 3.5% down-payment, whereas, the VA program approves 100% home loans without any form of a down-payment.

The VA program also separates itself from conforming financing in that the borrower must meet the VA loan eligibility to qualify for veterans loans. The VA does not set loan limits like the FHA, however the loan size can be limited by the type of mortgage. The maximum guaranty for certain liens in excess of $144,000 is 25% of the $417,000 loan limit. The loan limit for a 1-unit home is $417,000 so the maximum they will guaranty is $104,250.

If you are looking for a company that offers home loans with zero-down, then Home Loan Wholesale can help connect you with multiple sources. This month, we announced that Nationwide would be our featured lender for military loans with nothing down.

The Veterans’ loans can be for buying houses or refinancing and can be used for a number of different transactions including:

  • Traditional House Buying
  • Refinancing Home Construction
  • VA Loan Assumptions
  • Standard Mortgage Refinances
  • Streamlines, AKA, Interest Rate Reduction Refinance Loans (IRRRLs)

July 13, 2010

Government Home Loan Programs

Government home financing has become a popular choice for home purchase and home refinancing.  The Federal Housing Administration offers consumers affordable home financing and they only require a 3.5% down-payment.  Homeowners that are seeking FHA refinancing may qualify for a rate and term or streamline refinance that also only needs 3.5% home equity.  Today, FHA mortgage rates are available at 4.5% on the 15-year fixed rate option and 4.75% on the 30-year fixed rate mortgage.

VA home loans are guaranteed by the Department of Veterans Affairs.  The VA mortgage is a unique option for first time home buyers, because it has a no-down-payment required for eligible veteran home buying.  VA mortgage rates are available at 4.375 on the 15-year fixed rate option and 4.625% on the 30-year fixed rate loan.  VA refinancing is also available at 100% with both rate and term and streamline refinance options.  Read the original article online at the Nationwide Mortgage Blog >  http://www.bdnationwidemortgage.com/blog/index.php/2010/07/government-mortgage-solutions-with-fha-and-va-home-loans/


June 5, 2009

Refinance or Mortgage Modification with Bad Credit or No Equity

In a recent article, California mortgage broker, Jeff Morris, formerly with GMAC and Ditech estimated that one in ten of homeowners who visit him online are able to get approved for a conventional or FHA-refinance.  Morris said, “People simply don’t qualify with the mortgage lenders tighter guidelines and lack of home equity.“ Borrowers seeking home refinancing, outside of California, Arizona and Nevada may have a better chance because fewer borrowers in the mid-west and south are under water with their mortgages being greater than their home’s value.  Even with mortgage lenders extending 97% FHA and 105% mortgage refinancing, California homeowners have little opportunities to be approved because home values have declined so significantly since they bought their properties years ago.   


The goal should be for homeowners to invest in a home that they can afford and if refinancing with a lower mortgage payment is an option, then borrowers would be foolish not to seize the savings opportunity. Morris added that “the demand for loan modifications has not waned and he sees an increase in loan workout requests for borrowers who are stuck in jumbo mortgage loans that have interest rates set to adjust.” The banks just aren’t handing out loan modification agreements to just anyone anymore.  Homeowners seeking foreclosure prevention alternatives from their mortgage lender must be able to document that they have the income to support the modified home loan payment. 


In Maui, Caleb Palmer, a broker, said “Consumers should stop whining about things they can’t control and focus the affordable home buying opportunities that have become available since the housing market crashed in 2006.” Palmer continued, “Mortgage rates were under 5% for thirty year fixed rate loans and inventories were beginning to open up in neighborhoods that haven’t been available for years.”  Palmer believes that 2010 will see more buying opportunities in Hawaii and California before the market shifts back to appreciation mode. 


In addition, if you’re older than 40, shortening your mortgage term now could help leave you mortgage-free in retirement, reducing the income you’ll need to generate from your battered 401(k).
But before you jump in, you should know that most single-family home loans today need to fall within Fannie Mae and Freddie Mac limits — up to $417,000 in most places, and up to $729,750 in certain high-cost cities such as San Francisco and New York. “Jumbo” mortgages, or those larger than those limits, are still very hard to find. Then you’ll need two crucial and tough-to-acquire bits of information: your credit score and your home’s current value. Those will determine whether you can refinance at all and how close you can get to the lowest rates available. Even then, you may find the process unusually long and unpleasant; some banks are taking up to 90 days to complete a refinancing.  If you got your current mortgage in the past few years, when less documentation was needed, you may be surprised by the financial colonoscopy that awaits you. You need pay stubs, bank statements, brokerage statements and maybe tax returns to convince the lender that you can and will repay the loan. If you’re self-employed, you may be asked for a profit-and-loss statement for this year; if you rely on bonus income, expect the lender to assume this year’s bonus will be a lot less than last year’s.


What is home equity? Having some equity in your house is essential to qualifying for a new mortgage loan. If your current mortgage is less than 80% of the value of your home or less than 75% of your condominium, you should have refinancing options as long as you don’t have late mortgage payments and bad credit scores.  Subprime refinancing and bad credit mortgage options have disappeared with the exception of VA and FHA loans.  VA home loans are only offered to military veterans and FHA mortgage guidelines require full income documentation and most bad credit home loan applicants need a stated income program.


If your mortgage is between 80% and 105% of your home value, you’re current on your payments and your loan was bought by Fannie Mae or Freddie Mac, you may be able to refinance under a two-month-old government program called “Making Home Affordable.” Some kinks are still being ironed out, and Fannie and Freddie have different requirements, so go to the program’s Web site at MakingHomeAffordable.gov or contact your mortgage servicer to see if you qualify.

Sometimes under this program, Fannie and Freddie will waive appraisals and other underwriting steps. And if you’re refinancing a Veterans Administration or Federal Housing Administration loan, a new appraisal isn’t needed. 


June 3, 2009

Streamline for VA Home Loan Refinancing

Mortgage brokers continue to report that FHA mortgage and VA home loans are the hottest products in the home financing sectors of the U.S.  The VA provides low mortgage rates for streamline programs to veterans who currently have a loan guaranteed by the U.S. Department of Veterans Affairs.  In addition to the VA streamline refinancing, Mortgage Related News reports that and VA loan officers are originating the Interest Rate Reduction Loan at a high volume than previous years because this VA loan has no “seasoning” requirement.


In the mortgage industry, this type of seasoning refers to borrowers who recently completed a mortgage refinance transaction.  In addition, these VA loans entail very little documentation and usually do not require an appraisal. In order to qualify, borrowers must have a VA home loan that is not delinquent. In a recent VA mortgage article, Tom Kelly highlights the opportunity that military veterans and their families have financing and refinancing with VA home mortgage loans.  He points out that one of the simplest ways for homeowners who have a VA mortgage is with the VA streamline refinance. 

VA mortgage lenders will assess that veteran borrowers meet basic program requirements including:

·         The new monthly mortgage loan payment must be for less than the original loan.

·         The VA mortgage rate must be for less than the original loan (unless refinancing from an adjustable interest rate).

·         The term cannot exceed thirty years or ten years more than the original mortgage term (up to a max of 360 months).

After 50 years of offering loans only to vets who served active duty, the VA changed its rules in 1992. Men and women who have completed six years in the Army, Navy, Air Force, Marine Corps or Coast Guard Reserves, or the Army National Guard or Air National Guard, are eligible for VA home loans, including programs with zero down required. 


October 27, 2008

New and Existing Home Sales Increase in September

Category: FHA,Home Loan News,VA – admin – 8:55 am

The National Association of Realtors said Friday that sales of existing homes rose by 5.5 percent in September compared to August, the best showing since a 5.6 percent increase in July 2003, during the five-year housing boom.

By region of the country, sales soared by 16.8 percent in the West and rose a more moderate 4.4 percent in the Midwest and 2.2 percent in the South. The only region of the country which saw a decline was the Northeast, where sales fell by 1.1 percent. New home sales have increased by 2.7%. And, while median home prices have dropped to the lowest level in four years, investors are pleased that the market is beginning to chip away at an inventory glut.

More Good News
The government will begin doling out $125 billion to nine major banks this week as part of its effort to contain a growing financial crisis, a top Treasury official said Monday. This will mark the first deployment of resources from the government’s $700 billion financial rescue package passed by Congress on Oct. 3.  Home interest rates continue to decline, but many mortgage executives are concerned that it’s too little too late.  FHA home loans have been the most popular mortgage for first time homebuyers.

Assistant Treasury Secretary David Nason said the deals with the nine banks were signed Sunday night and the government will make the stock purchases this week. The deals are designed to bolster the banks’ balance sheets so they will begin more normal lending.

Signs of Limited Credit Thaw Emerge in Money Markets
Banks cut the rates they charge each other for overnight loans in U.S. dollars and Euros on Friday, and the rate on one-day corporate IOUs eased from Thursday, providing tentative signs that some corners of the credit market are thawing. But, it will take some time for credit to thaw enough to where consumers can get loans.

The economy didn’t falter overnight, “and it’s going to take a while for the credit system to thaw,” Bush said just before the markets opened, speaking across a park from the White House at the U.S. Chamber of Commerce building, a symbolic headquarters of American business.

While the credit freeze affects conventional mortgage loans, FHA, VA and other government-backed loans still have reasonable credit underwriting. Homes are starting to sell. Prices are low, and sellers are willing to accept offers from buyers who are approved for government-backed loans. Take advantage of the market. Fill out the free loan quote form on this site to see what you may qualify for.  See FHAHomeLoanRefinancing.com for more info on government insured financing.


October 5, 2008

How the Housing and Economic Recovery Act of 2008 Tax Credit Works

Category: Consumer Tips,FHA,VA – admin – 4:48 pm

The Housing and Economic Recovery Act of 2008 was signed into law by the President on July 30, 2008. It began on October 1, 2008 and sunset on September 30, 2011. It was designed primarily to address the subprime mortgage loan crisis. But, one of the features of this legislation is a tax credit that the government hopes will help stimulate the housing market. This tax credit is only available to first time homebuyers. A first time homebuyer loan is financing for a borrower that is defined as someone who has not owned a primary residence for 3 years prior to the home purchase.  FHA home loans have been helping new homebuyers for years, but their recent expansion for 1st time home-buying should reach out to more consumers.

How to Qualify for the Tax Credit
First time home buyers who finance a home between April 9, 2008 and July 1, 2009 are eligible to take a tax credit equal to 10 percent of the purchase price of a principal residence, up to $7,500 on their 2008 tax returns. A qualifying home purchase is a single-family detached home, townhouse, condominium, manufactured home, or even a houseboat. Single taxpayers with modified gross incomes up to $75,000 and married taxpayers with a joint modified gross income of up to $150,000 are eligible for the full amount. Above those incomes, the tax credit begins to phase out.

Getting Started with the Tax Credit
All you have to do is claim the tax credit on your federal income tax return. No additional paperwork is required. If you don’t want to wait until you file your return to claim the credit, you can simply reduce your income tax withholding.

The NAHB reports, “Buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the future home buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the down payment. Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding.”

Important Notes about the Tax Credit
Here are some important things to not about this tax credit, so you know just what to expect if you decide to take it:

  • This tax credit is basically an interest-free loan, which must be paid back over the course of 15 years.
  • This is a tax credit, and not a tax deduction, meaning that it is a dollar for dollar reduction on taxes owed, as opposed to a tax deduction, which reduces the amount of your adjusted gross income that can be taxed.
  • The credit is refundable, meaning if you owe $2,000 in taxes and take the $7,500 credit, you will receive at $5,500 refund.
  • The credit must be repaid to the government over 15 years or when the house is sold. For those taking the tax credit in 2008, the first $500 payment would need to be made when the buyer files their 2010 tax return.

What if I sell the house?
If you sell your home within 15 years, and the gain on the home is less than the amount of the credit, then the remaining portion of the tax credit is forgiven.  If the gain is greater than the remaining portion of the tax credit, then the balance will be due for that year’s income taxes.



September 12, 2008

VA Home Loan Updates

Category: VA – admin – 7:36 am
The House of Representatives finally approved to adjust the veterans’ cost-of-living adjustment bill, sending it to the White House for President Bush’s signature with debt relief for thousands of service members and veterans who are facing increasing home loan payments.
The VA announced it will begin implementing a geo-targeted approach in elevating the ceilings on its no-downpayment home loans from the current $417,000 limit up to $729,000 in some regions.   The raised loan limits in the general VA home loan program for all veterans’ home purchases or construction will be based on local housing costs, tied to the similar locality adjustments of Freddie Mac.
The recent drop in interest rates has caused many veterans to reconsider their mortgage.  The VA streamline enables borrowers to refinance with no appraisal and in some cases borrowers are allowed to skip mortgage payments.