Q&A about VA Loans

Military Father and Son

VA loans are $0 down payment mortgage options available to veterans, service members and select military spouses. VA loans are issued by private lenders and guaranteed by the U.S. Department of Veterans Affairs (VA).

Since its inception in 1944, more than 22 million VA loans have helped veterans, active duty military personnel and their families purchase homes or refinance mortgages.

How does a VA loan compare to a traditional/conventional home mortgage? Read on.

What is the down payment?

  • VA loans: 0% down.
  • Conventional loans: Up to 20% down.

Do I have to pay mortgage insurance?

  • VA loans: VA loans do have a form of mortgage insurance, the VA Funding Fee. It is usually 3.3% and financed into the loan up front. If the borrower separated from the military with a qualifying disability, the funding fee is waived to 0%.
  • Conventional loans: If buyers do put down less than a 20% down payment, they must pay for private mortgage insurance.

Are the interest rates for VA loans competitive?

  • VA loans: The VA backing gives lenders a greater degree of safety, which means the interest rates can be more competitive than non-VA loans.
  • Conventional loans: Without government backing, banks take on more risk with conventional loans, which can result in less-competitive interest rates.

How easy is it to qualify for a VA loan?

  • VA loans: Because the loan is backed by the government, banks assume less risk and have less stringent qualification standards for VA loans, making them easier to obtain.
  • Conventional loans: Conventional loans require stricter qualification procedures that can put homeownership out of reach for some homebuyers.

Can I do a cash out refinance? 

  • VA loans: Borrowers can do a cash out refinance up to 100% of their home’s value.
  • Conventional loans: Borrowers with conventional loans must leave some equity in their home when doing a cash out refinance.

What else should I know about VA loans? 

  • VA eligibility is re-usable. A lot of people think they are only eligible for a VA loan one  time, but they are able to get VA loans more than one time.
  • You can have more than one VA loan at a time. It’s a myth that you can only have one at a time.
  • VA loans are assumable.

 You or someone you know may be the perfect fit for a VA loan. Contact a loan officer today to learn more about VA loans and other types of home loans that may be a good fit for you.

Do you want more information about VA loans or grants? Find it here or call us today.  

 

Mend Your Credit by Rehabilitating a Defaulted Student Loan

Student loan

If you’ve defaulted on your student loans, you’re not alone. According to CNBC, more than 1 million people default on their student loans each year, and approximately 22% of student loan borrowers default at some time. But joining the crowd won’t help your credit or open opportunities for you in the future.

Here are some ways you can work to repair a federal student loan that you have defaulted on. For more details visit the Federal Student Aid Office’s website. If you have defaulted on a private student loan, you will need to contact your loan holder for information.

Repay the Loan in Full
The most obvious way to get your loan out of default is to pay it in full, but for most borrowers, that is not an option.

Loan Rehabilitation
To start the loan rehabilitation process, you must contact your loan holder. If you’re not sure who your loan holder is, log in to “My Federal Student Aid” to get your loan holder’s contact information.

To rehabilitate a William D. Ford Federal Direct Loan (Direct Loan) Program and Federal Family Education Loan (FFEL) Program loan, you must

  • agree in writing to make nine voluntary, reasonable, and affordable monthly payments (as determined by your loan holder) within 20 days of the due date,
  • and make all nine payments during a period of 10 consecutive months.

Your loan holder will determine a reasonable monthly payment amount that is equal to 15 percent of your annual discretionary income, divided by 12. You must provide documentation of your income to your loan holder in order to determine the amount you will pay.

If you can’t afford the initial monthly payment amount, you can ask your loan holder to calculate an alternative monthly payment based on the amount of your monthly income that remains after reasonable amounts for your monthly expenses have been subtracted. Depending on your individual circumstances, this alternative payment amount may be lower than the payment amount you were initially offered.

To rehabilitate your loan, you must choose one of the two payment amounts. Once you have made the required nine payments, your loans will no longer be in default.

To rehabilitate a defaulted Federal Perkins Loan, you must make a full monthly payment each month, within 20 days of the due date, for nine consecutive months. Your required monthly payment amount is determined by your loan holder. Find out where to go for information about your Perkins Loan.

Benefits of Loan Rehabilitation
When your loan is rehabilitated, the default status will be removed from your loan, and collection of payments through wage garnishment or Treasury offset will stop. You’ll regain eligibility for benefits that were available on the loan before you defaulted, such as deferment, forbearance, a choice of repayment plans, and loan forgiveness, and you’ll be eligible to receive federal student aid.

Also, the record of default on the rehabilitated loan will be removed from your credit history. However, your credit history will still show late payments that were reported by your loan holder before the loan went into default.

If you rehabilitate a defaulted loan and then default on that loan again, you can’t rehabilitate it a second time. Rehabilitation is a one-time opportunity.

Loan Consolidation
Consolidating your loan into one Direct Consolidation Loan allows you to pay off one or more federal student loans with a new consolidation loan.

To consolidate a defaulted federal student loan into a new Direct Consolidation Loan, you must either

• agree to repay the new Direct Consolidation Loan under an income-driven repayment plan, or
• make three consecutive, voluntary, on-time, full monthly payments on the defaulted loan before you consolidate it.

If you choose to make three payments on the defaulted loan before you consolidate it, the required payment amount will be determined by your loan holder but cannot be more than what is reasonable and affordable based on your total financial circumstances.

There are special considerations if you want to reconsolidate an existing Direct Consolidation Loan or Federal (FFEL) Consolidation Loan that is in default.

Getting Help with Your Defaulted Loan
If you need help with your defaulted loan, you will need to contact the holder of your defaulted loan. Find out who holds your loan by logging in to “My Federal Student Aid.

Buying a Home this Spring? Make Sure You Get the Details Right.

Front Door Flowers

Spring marks the beginning of the selling season and is often considered the busiest and best time to purchase a home. As more people look to purchase a home in the coming months, it’s important to understand the buying process. Here are some tips from DORA (Department of Regulatory Agencies) and the Division of Real Estate.

Talk to your lender early in the process. Meet with your lender before contacting a real estate agent to simplify the home buying process. Getting prequalified for a mortgage gives you a solid price range for homes to consider.

Determine your working relationship with your broker. Many homebuyers don’t know that Colorado has two options when it comes to your relationship with your broker – a Single Agency broker (an agent for the buyer OR seller) or a Transaction Broker (for the buyer or seller OR both). A single agency broker will advocate for and work solely on a single client’s behalf. A transaction broker facilitates the sale by fully informing the parties, presenting all offers and assisting the parties with any contracts, including the closing of the transaction without being an agent or advocate for any of the parties.

Understand the real estate contract. An offer for the purchase of real estate must be in writing to be valid. The Colorado Real Estate Commission requires every real estate broker licensee use a contract form approved by the Real Estate Commission, unless the contract is drawn by either the seller or buyer or the attorney for the buyer or seller.

Recognize contingencies in the contract. The contract approved by the Real Estate Commission allows for the buyer and their licensed broker to make the contract contingent on certain items. Contingencies can be items such as the property appraising for the purchase price, approval of financing, a satisfactory home inspection, or the sale of their current residence. It is critical for a buyer to include those contingency items in the contract to eliminate misunderstandings about what circumstances will allow for a successful execution of the transaction.

Meet all deadlines and put down your earnest money. Once your offer has been accepted by the seller, you will put down a good faith deposit, often called earnest money. Both the buyer and seller will need to meet specific deadlines before you close on your home. As a buyer, if you miss a deadline, you might not be able to cancel or withdraw your offer unless you are willing to forfeit your earnest money. Your offer allows you to make decisions regarding when to close on your new property, when you can take possession of that property, and what remedies are available if the contract dates are not met.

This is a lot of information. If you’re ready to get started on the homebuying process, contact us to start with step one and get you pre-qualified today.

Keeping Kids Entertained at Open Houses

Family Opening Door And Walking In Empty Lounge Of New Home

If you’ve ever had children tag along with open house visitors, you know it can sometimes be difficult to keep them entertained while touring a house. Here are a few ways to conquer kid-size boredom, keep the parents’ attention, and extend time to engage with the family.

Give kids something to do. Scope out a low-traffic station for snacks, coloring or play dough. Hold a contest for the best drawing of the home and offer a prize that winners can pick up at your office. This gets kids involved in the spirit of house hunting and creates additional contacts with prospects.

Give kids something to take home. Inexpensive coloring books and a pack of crayons, a pick-a-prize toy box, or a small goody bag handed off at the end of the visit can add a little extra patience to kids’ reserves. Your level of understanding in the situation will also translate well with parents.

Create a digital playground with a few iPads or a dedicated “kids only” laptop loaded with simple and fun-to-play games, like “My PlayHome” or “Make a House.” Gearing media toward real estate reinforces interest in the parents’ activity and helps them explain the process to little ones.

Ask kids’ opinions. While older kids may not be as finicky, they can distract parents and push to speed things up. Be ready with clipboards and opinion checklists that ask to list their top three likes and dislikes about the home. Send a branded house hunting checklist home with parents.

Kids can be an opportunity to develop a relationship with real-estate-minded parents. Don’t miss out!

Source: Inman

Protect Your Nest Egg from Quick Cash Offers

Visiting grandparents bend and kneel to hug grandchildren

The Division of Real Estate recently issued this consumer advisory – “Take 5 to get wise and learn how to protect your real estate nest egg.”

Colorado residents owning a home for 20 years or more are being targeted for the equity in their property. An offer may include a cash transaction, a quick sale, no inspection, and the freedom to leave your problems behind.

In Colorado’s hot real estate market, a lot of homeowners might not know the market value of their property, which is what unscrupulous investors want. They are trying to drive down your property value with misleading and confusing information. Their goal is to make a profit by turning around and selling your property at true market value.
This can happen to anyone because people who perpetrate fraud are good at what they do – separating you from your money.

Protect your nest egg when considering an offer on your property:

  • Go to www.dora.colorado.gov/dre to research licensed professionals.
  • Go to your local county government website and look up property values for you and your neighbors.

Other tips to protect your nest egg when considering an offer include:

  • Be wary if you weren’t thinking about selling.
  • Always keep someone you trust in the loop.
  • Do research on real estate brokers working in your neighborhood.
  • Always seek legal advice.
  • Know the value of your property and understand the motivations of why an investor wants to buy your property.

By taking a few steps you can protect your home, your finances and your future. If you have questions, please contact us.

Home Projects for the Valentine’s Day Honey-Do List

Dad does it all

Sure! Flowers are nice and dinner out is almost always a success. But if you really want to say, “I love you,” try one of these easy February home maintenance projects and show what it really means to love someone!

Freshen up the bedrooms.
Wash all of your sheets and blankets and run them through the sanitize cycle on your washing machine. Are your pillows able to go in the washer? Wash those, too! And any bed covers that can be washed should be and others should go to the dry cleaners. Fresh bedding makes for a fresher home.

Dust the places no one sees.
So we dust our table tops, shelves and book cases. But how often do we dust those places no one sees? February is the perfect month to dust the tops of door frames, dust window ledges and wall boards. Dust all the lamp shades and bulbs, too.You’ll be surprised at how much brighter everything looks because you do this task.

Clean your windows.
Let the winter sun warm your house up even more (or make it sparkle anyway!) by washing the windows. You may not be able to do the outside windows in the cold weather, but you’ll see an immediate improvement in your home, if you simply clean the insides of the windows. Dust the blinds and spot clean your curtains.

Clean under your furniture.
You don’t have to vacuum the entire house if you don’t want to (but you will when you start this project!), but move the couches and the chairs and tables and vacuum beneath them. If there’s a place that you usually work around, then now is the perfect time to move it and clean where no one sees.

Wipe the places that get touched a lot!
Take some time to clean the places that never get cleaned but should. Wipe down the legs of chairs and tables, door knobs and light switches, and the knobs on all cabinets and drawers. If you touch it to turn it on or off or to open or close something, clean it today!

Clean small kitchen appliances.
Do you have a spotless microwave and an oven so clean you are proud to leave the door open? Yet, if someone were to look at the bottom of your mixer, they’d see cake batter from two years ago? It’s time to clean your small kitchen appliances. Wipe down your mixers; change the filters on your coffee pot and run a water vinegar mix through it; shake out the toaster crumbs. What other appliances can you find to clean?

These are six Valentine’s Day Honey-Do jobs that will prove you love everyone in your home, and yourself, too! Happy Valentine’s Day!

Show Mom You Love Her On Valentine’s Day

valentinesdaymom

Have plans for Valentine’s Day? Of course flowers and candy may make Mom happy. But if you and the kids really want to show her how special she is this Valentine’s Day, try one of these ideas.

Write her a letter or make her a glittery card. Mom’s going to keep a handwritten letter from her kids for a long time. Grab a pen and paper or some glue and sequins and have your kids write a letter or make a card that shows how special she is. She’s going to savor that treat forever.

Extend Valentine’s Day to a weekend day. You knowMom…would a few hours alone be her favorite activity one weekend day? Let the Valentine’s Day love spread to the weekend and take the kids out for a while.

Clean the house. Vacuum, dust, scrub the bathrooms – you know Mom doesn’t like to do these chores. Help the kids clean so Mom can spend some time in a lemon-scented, freshly vacuumed home.

Wash her car. Better than cleaning the house – wash, vacuum and maybe even wax her car. There’s no mom that’s not going to appreciate a shiny, clean, cup-free car!

Take the kids grocery shopping. Go to the grocery store for Mom. It’s Dad’s turn to push the cart, pay the bill, lug the groceries in the house, and most importantly, say no to sugary cereal and cookies.

And finally – Take Mom out to dinner. It may sound like a fun idea to cook for Mom on Valentine’s Day, but you’re going to stick her with the greasy pots and pans and a sink full of dishes that need to be loaded (and then unloaded) from the dishwasher. Treat her to a night out. Doesn’t have to be fancy. She’ll be glad to not be on KP Duty.

These are a few ways to say “We Love Mom.” But remember, you don’t have to save these for a special day. Make every day Valentine’s Day!