It is time to branch out into deeper waters with your VA loan. Why not, every one is taking advantage of the market in its downturn, and you too are deserving when it comes to making a good deal. The VA loan has the 100% no money down payment insured from the government to qualified veterans, to stimulate the economy through the low cost housing, with interest rates lower than your normal conventional loan. The market is flooded right now, with bank owned properties up to 20-30% off the loan amount owed on the property. In addition, the VA will let you have the seller pay up to 4% in closing costs. For example, if you buy a $300,000 home with a VA loan, the seller can pay up to $12,000 in closing costs, in addition to fixing up the property for all non-structural related improvements up to around 5,000!
This is an excellent benefit for the veteran because you do not need a down payment and if you are an medically discharged veteran who receives at least 10% medical per month from the VA, it is not required of you to pay the VA funding fee, which is normally 2.15% of the loan amount for all first time home buyers.
What does it take to qualify for a VA loan? At least 181 days of active duty, active or discharged, honorable or medically discharged under honorable conditions, and around 45% debt to ratio. If your medically discharged and do not work however, get enough medical money per month from the VA to ratio for the home loan, then we can use that income as well.
Enjoy looking for a home in the community of foreclosures!
Monday, July 23, 2012
Wednesday, July 4, 2012
The Buyers Guide for a VA and FHA Loans
There are some many opportunities for purchasing a home for first time home buyers. The purchaser is encourage to do a little homework so both parties, the buyer and the seller, can enjoy there experience. If you are obtaining a FHA or VA loan to finance your purchase you must include that information in that offer. This is necessary because government loans place additional financial performance obligations on the seller.
That is why so many times times the seller will refuse these loans because of their obligations, therefore placing the buyer in a situation he may not have anticipated. For example, VA and FHA loans prohibit buyers from paying certain types of fees that are often charged by lenders, escrow companies, settlement agents, and title companies. They are fees that as a buyer of these loans you are not allowed to pay them. However, the end result is that the seller ends up paying them. Keeping this in mind, the seller would more than likely be less negotiable on the sale price.
The home appraisal inspections on VA and FHA loans are more detailed than the conventional loans and therefore more expensive. The home inspections are still encouraged, and these additional costs the seller would not be obligated to pay for in conventional financing; so the buyer should include a maximum figure for these repairs. If not then the seller would be in a position of signing a blank check; therefore sellers will refuse. The best solution is to add a clause to offer that goes something like this: "If required repairs cost less than the maximum amount allowed, the excess will be credited toward buyers closing cost."
This will give some assurance to the seller that he is managed fairly in the buying transaction, and get the best offer for his home. Unfortunately, many sellers do not want to negotiate selling their homes using VA and FHA loans because of the reasons mentioned. Yes this is discriminatory however, they say immediately, "Don't even bother making a bid." In some cases, I have talked with several real estate agents, and they agree that these loans are at the bottom of the list, because of misconceptions about the riskiness of these buyers, mixed with some realities of piles of paperwork and stringent inspection standards that sellers do not want to take extra time for VA bids.
This has caused delays and denials for some tens of thousands of veterans or active duty personnel across the region, in buying a home. This has become more evident in the housing boom we are having now simply because the seller does not believe the loan will go through or that it takes too long to process.
We need to educate our consumers more on this opportunity, especially since we are having a strong influx of veterans coming home again. Our military personnel need to feel welcomed back into their country he has fought so hard for, in making it safe and proud for us.
That is why so many times times the seller will refuse these loans because of their obligations, therefore placing the buyer in a situation he may not have anticipated. For example, VA and FHA loans prohibit buyers from paying certain types of fees that are often charged by lenders, escrow companies, settlement agents, and title companies. They are fees that as a buyer of these loans you are not allowed to pay them. However, the end result is that the seller ends up paying them. Keeping this in mind, the seller would more than likely be less negotiable on the sale price.
The home appraisal inspections on VA and FHA loans are more detailed than the conventional loans and therefore more expensive. The home inspections are still encouraged, and these additional costs the seller would not be obligated to pay for in conventional financing; so the buyer should include a maximum figure for these repairs. If not then the seller would be in a position of signing a blank check; therefore sellers will refuse. The best solution is to add a clause to offer that goes something like this: "If required repairs cost less than the maximum amount allowed, the excess will be credited toward buyers closing cost."
This will give some assurance to the seller that he is managed fairly in the buying transaction, and get the best offer for his home. Unfortunately, many sellers do not want to negotiate selling their homes using VA and FHA loans because of the reasons mentioned. Yes this is discriminatory however, they say immediately, "Don't even bother making a bid." In some cases, I have talked with several real estate agents, and they agree that these loans are at the bottom of the list, because of misconceptions about the riskiness of these buyers, mixed with some realities of piles of paperwork and stringent inspection standards that sellers do not want to take extra time for VA bids.
This has caused delays and denials for some tens of thousands of veterans or active duty personnel across the region, in buying a home. This has become more evident in the housing boom we are having now simply because the seller does not believe the loan will go through or that it takes too long to process.
We need to educate our consumers more on this opportunity, especially since we are having a strong influx of veterans coming home again. Our military personnel need to feel welcomed back into their country he has fought so hard for, in making it safe and proud for us.
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