November 9th, 2009 10:02 AM by Joan Rusco
Minnesota Veteran’s have earned the right to buy a home with a VA home loan and buy that home with extra benefits which now include a tax credit. My worst nightmare is Veterans missing out on the great home buying opportunity that exists right now. Granted, many people think this is not a good time of year to buy a home but that is not the case. Here’s why; mortgage interest rates are still historically low, housing prices have dropped (and may still be dropping) and a VA (DVA) home loan is assumable.
Minnesota VA home loan interest rates are still very low. At VALoansMN we have 100% financing in the 5% range. I’ve written before about remembering mortgage rates in the high teens and there are some economists who think we might be headed there again. Also, home prices in Minnesota have dropped by 40% to 50% in some areas. Yet one of the most compelling reasons to buy using a Minnesota VA home loan: it is an assumable loan (more on that later). Finally, the President just signed into law a bill that extends the home buyer tax credit. First time buyers, those who have not been on a title for 3 or more years, qualify for up to $8,000 in tax credit. That is not $8,000 subtracted from your income that is $8,000 subtracted from the tax you owe. This means if you owe nothing the Feds will send you a check for $8,000. Under the new bill even move up buyers get a credit of $6,500. There are some qualifying factors so give me a call or drop me a note at www.VALoansMN.com for details.
I mentioned earlier the assumable nature of a VA home loan in Minnesota (and all other states). Let me give an example of how this works. Let’s say you take out a home loan for 100% of the value of a house to make a $200,000 purchase. Let’s say that note rate is 5.5%. Ten years later you decide to sell your home and move up to a nicer home. Let’s also assume that the housing market is not good and there are many homes for sale and only a few buyers (such is the case now). Also we’ve seen inflation kick mortgage rates up to 10%. Making regular payments on your 5.5% mortgage you would have paid off about $35,000 of that $200,000 loan. You still owe about $165,000. You put your house on the market and remember: you have an assumable VA home loan of $165,000. A qualified Minnesota Veteran can assume your 5.5% loan of $165,000 while everyone else in the market is getting loans for 10%. Do you think this makes your house more attractive in the slow market? I do!
Please, if you’ve thought about buying a home and you are a Veteran, give these benefits very serious thought. If you know anyone who might qualify for these benefits call them now. Urge others to take advantage of this great Veteran home buying opportunity. This window may be closing soon and I want as many Minnesota Veterans as possible to benefit from what may be once in a lifetime opportunity.