VA Loans Blog

The roaring economy steamrolled into America a few years back as some of the know-it-all poo-bahs were predicting yet another recession. Even a few months ago the “experts” said we’re in for a recession. This may be 2020 but we can assure you the vision of the pundit class is not 20/20.

Jobs, jobs, jobs and, better for us, low rates, low rates, low rates!  Veterans wanting to buy or refinance homes have hit a sweet spot in the market place. A decade ago rates had dropped to 5 percent and the rush to refinance was on. Now those same mortgages can be refinanced at incredible (and hassle free) savings. That’s one of the several outstanding features of your V.A. loan, it can be refinanced with only a fraction of the documentation of other mortgages.

Readers of our blog have noticed time and again we’ve urged Veterans to take advantage of our historic low interest rates. Despite the roaring economy we’re not seeing inflation to match as has been the case in the past. Usually when an economy is on fire the blaze gets out of hand and starts burning up the benefits with higher prices and higher interest rates. That is not happening now. You can still call us at VALoansMN, talk to Brad about your current mortgage and chances are we can save you thousands even if your mortgage is but a few years old.

There was a time not to many years ago when homeowners would make extra effort to pay off the mortgage. Why pay all that interest if you have the ability to pay down the principal? In today’s economy that may not make sense. Before we pursue this line of thinking we want to be very clear;  you should always turn to professional financial advisors when it comes to your money and investing. We are not CPAs or Certified Financial Planners and you should check with that professional class when considering your own situation. But sometimes the facts are as plain as the nose on your face.

Here’s the scenario. Veterans Mary and John have a $200,000 V.A. loan at 3.75% on their home. They also have sufficient income to make more than the minimum monthly payment on this 30 year loan. But they’re also saving for future needs such as education for the kids or their own retirement. Their financial advisor has placed their savings in funds that give them an annual return of 6% or better. The question before them is should they pay down their mortgage with a 3.75% rate or take that extra cash and invest it in their savings which is giving them 6% (or more)?  What would you do?

With the economy roaring into the new decade it may be time for you to take advantage of what we offer at VALoansMN. Call Brad at 612-240-9922 and see how you may be able to take advantage of this economic sweet spot with low loan rates.

Posted by Joan Rusco on January 5th, 2020 7:47 AM

There was a series of recent posts on one of the many chat boards which began “the cool thing about….”. What followed was every political hot topic in today’s world. There was the cool thing about gun control, the cool thing about impeachment, the cool thing about school choice and on it went. Most of the posts were filled with sarcasm and negativity. It got us thinking about the cool thing about, wait for it, V.A. home loans. No sarcasm or negativity needed.

The cool thing about a V.A. mortgage is:

  1. NO DOWNPAYMENT IS REQUIRED

  1. NO MONTHLY MORTGAGE INSURANCE PAYMENT

  1. THE V.A. GUARANTEES YOUR LOAN

  1. YOUR V.A. MORTGAGE IS ASSUMABLE

5.  THE V.A. ENSURES QUALITY HOMES

Now to drill down on each of these cool things;

Number One: You can borrow up to 100% of the value of your home whether it be a purchase or refinance.

Number Two: True there is no monthly payment but there is a one-time, up-front duding fee. Whether you are active duty or reservist you will pay a percentage of the loan balance as this funding fee. Borrow 100% of the home value and you’ll pay 2.3% for your first use of a V.A. loan. If you’ve had previous V.A. loans you’ll pay 3.6%. Borrow less than 100% and the rates decrease. Call Brad for specifics on your loan situation.

Number Three: The V.A. does not loan the money but rather they guarantee or stand behind your loan. This means banks and other lenders are more inclined to loan the money because it is guaranteed even if you were to fall on hard times and default, the bank is protected. The lenders we choose at VALoansMN like V.A. loans for this reason.

Number Four: This may be one of the biggest overlooked values of your V.A. mortgage. Let’s say you take out a 30 year V.A. loan for $250,000 to buy your house and your rate is 3.75% (we have rate even lower in some cases). Your monthly payment would be about $1,158. Let’s also say in 7 years you decide to sell your home. Your loan balance would be about $213,900. Your loan is now assumable by another qualified veteran. Where do you think loan rates might be in 7 years? Higher or lower than your current rate of 3.75%? If there are higher your home with its 3.75% assumable loan may be the most attractive buy in the neighborhood. Yes, the buyer would have to make up the difference between the current loan balance and the value of your house (cash or second mortgage) but it may still be a great buy!

Number Five: Because the V.A. is guaranteeing your home loan they want to ensure the house is worth what your paying for it. The V.A. also wants to make sure all the systems work (plumbing, electrical, etc), the roof doesn’t leak, windows keep out the cold and heat, etc.

The coolest thing about V.A. loans in our minds is you have us to walk you through the entire process from start to finish. We do all the work for you and we think it pretty cool you give us the opportunity to serve you because you have served us.

Finally, we wish you and yours the happiest of holidays and a prosperous new year!

Posted by Joan Rusco on December 1st, 2019 11:50 AM

It seems each time we come to our VALoansMN blog we are urging Minnesota (and other surrounding states) to take action now, put some money in your pocket. It takes so little to save so much. We’re going to tell you how.

In previous months we’ve written about the benefits of a VA loan and there’s one that is especially important. That benefit is the ease of refinancing. Given current rates below 4% (subject to change) if you currently have a VA loan you may be able to save some money right away. R E F I N A N C E !

The downside for conventional mortgage holders is the cost of refinancing a mortgage. There’s all the little fees that keep adding up. That is not the case with a VA loan. When you call Brad at VALoansMN (612.240.9922) he’ll give you details on your specific loan but here’s a rough overview.

Refinancing your VA loan does not require an appraisal of your property. Refinancing your VA loan through VALoansMN/Leader One does not require you to verify your income. No appraisal, no income verification, no worries. And, here’s the really good part, the funding fee is just a fraction of the original fee you paid to get your loan in the first place. To refinance your VA loan you pay a fee of just ½ of 1% or .005 times the mortgage amount. That’s $500 per $100,000 of your loan amount.

Back to the issue of money in your pocket. Let’s say you have a $200,000 VA mortgage and you’re paying 5%. Your monthly payment is about $1,074. If you were to refinance that through VALoansMN/Leader One you might get a rate at 3.5%. Your payment would be about $898. You could put almost $200 in your pocket every month from those savings. That’s over $2,000 a year! You’d more than make up the cost in 1 year.

Please, do yourself a favor and give us a call so we can tell you how much money you’ll save. We could have that money in your pocket before the holidays!

Posted by Joan Rusco on November 1st, 2019 8:49 AM

In most cases, experts say, plain-vanilla, fixed rate mortgages remain the best choice. —WSJ article “Picking the Right Mortgage”, July 5, 2014.

So many homeowners got caught in bad mortgages when the real estate bubble burst years ago. There were interest only mortgages, adjustable rate mortgages and piggy back mortgages to name a few. We’re starting to see banks return to some of these loan products.

Interest only mortgage look great on the surface. They do lower monthly payments, but only for a while. Say you have a  $100,000 mortgage at 5%. Interest only payments would be about $417. Many of these loans promise interest only for 10 years. Then the interest rate would adjust to current market conditions. Let’s say rates go up a mere 2% in that ten year period. You now have 20 years left to pay off the loan. Your payment would increase to about $716 overnight. An increase of 72%! 

Adjustable rate loans can also be a good choice, for a while. Usually an adjustable rate loan will start at least 1% lower than a fixed rate. Then in 3, 5 or 7 years the rate will adjust to current market levels. Again, you might see a drastic increase in your monthly payment overnight.

Then there’s the plain-vanilla, fixed rate VA loan. Mortgage rates are still at historic lows. And when we at VALoansMN originate your mortgage that historic low rate lasts for 30 years. No surprises, no changes, just one predictable payment month after month. 

We agree with the Wall Street Journal; In most cases, experts say, plain-vanilla, fix rate mortgages (your VALoansMN home mortgage!) remain the best choice!  We’re here to help you get that “best choice”.

Posted by Joan Rusco on October 16th, 2019 11:47 AM

We’re starting with the NUMBER ONE IMPORTANT FACT: There is no monthly mortgage insurance payment with a VA loan unlike all other home loans. Using a conventional mortgage to purchase a home requires a 20% down payment. Anything less than that will require mortgage insurance. The cost is determined by the amount borrowed but it can easily be $150 an up. Another alternative is going with an FHA loan. These require a minimum down payment of 3.5%. A borrower purchasing a $200,000 home with 3.5% down would pay a monthly mortgage insurance payment of about $100. It decreases with the decrease in the loan amount. But that premium is for the life of the loan. These are reasons for any veteran to turn to the VA home loan benefit.

As we indicated there is NOmonthly mortgage insurance payment even if you borrow 100% of a home purchase price. There is an initial funding fee. Let’s break that down in more detail.

For regular military, the fee for first time use of your VA loan benefit is 2.15% of the loan if you have no down payment. Put down 5% or more and that fee drops to 1.5%, 10% down reduces the fee to 1.25%. 

For reserves and National Guard the funding fee for 100% of the purchase price is 2.4% for first time users. A 5% or more down payment reduces the fee to 1.75%, with 10% or more down the fee is 1.5%.

The above numbers are for first time use of the benefit. Subsequent use starts at 3.3% for a 100% loan. The rate remains the same as first time use for 5% or 10% down. 

Here’s our SECOND IMPORTANT FACT: You can roll funding fee into the mortgage amount. You can borrow up to 103.3% of the purchase price. No upfront cash is needed. As we’ve stated, there’s no monthly mortgage insurance so you don’t have that added cost. Another huge benefit of using your VA loan benefit is the usually lower interest rates association with these mortgages. 

 Lenders like that the Veterans Administration is guaranteeing these loans. It reduces the risk to the lender. A reduced risk results in lower cost therefore you are likely to receive a rate lower than the 30-year conventional loan.

 We’ve walked into the weeds a bit with this blog so if you’re not sure what it means to you give Brad a call at VALoansMN. He will gladly give you numbers based on your own need. VALoansMN and Brad are there to serve those who have served or are serving now.  It’s why we do what we do.

Posted by Joan Rusco on September 2nd, 2019 7:40 AM

Truth be told, we, nor anyone else, could have predicted V.A. loan rates would be this low for this long. Several years ago VALoansMN blogs were urging you to take advantage of these historic low V.A. loan rates because they would soon go away. We even had a realtor urging a client to buy a house now because rates were going up. Now look where we’re at!

For those buying a first home with a V.A. loan from VALoansMN and Brad Christensen a little loan history may be in order. Today’s rates in or below the 4% range are, by historic standards, extremely low. There was a time not that many years ago when homeowners were rushing to refinance their mortgage loans because rates had dropped to 10%. These same homeowners may have neighbors who had mortgage rates in the 6% range and thought “those days are long gone”. Now look where we’re at!

Veterans and active duty military are being given a financial gift by the mortgage market. A $250,000 house financed with a V.A. loan would have cost about $1,500 a month back in the days when rates were at 6% or almost $2,200 when rates “dropped” to 10% as we described in the previous paragraph. Today that $250,000 mortgage will cost you less than $1,200 a month. That is the gift the mortgage market is bestowing on you. Buy more house for less money today than in decades past. Look where we’re at!

Reading this you should have a sense as to where we’re at so the question now is “where are we going?”. We told you of a realtor telling a client to buy now because V.A. loan rates are going up. We spoke with that realtor and urged him not to use such language with any of our clients. He may have been right, mortgage rates might have been on the rise but we felt it was a sales pressure tactic to get someone to buy. In fact, rates didn’t go up and in the year or so since that experience rates for a V.A. loan in Minnesota and surrounding states have gone down.

The moral of our story from VALoansMn is: no one knows the future of mortgage rates. We can guesstimate where V.A. loan rates might be headed but it is only a guess. We know for certain where they are today and we urge you, if you’re thinking about buying or refinancing a home, call Brad today and let him give you the great news about our historically low V.A. loan rates that can save you thousands of dollars when you buy or refinance a loan using your V.A. benefit.

Posted by Joan Rusco on August 1st, 2019 8:54 AM

There are, in our opinion, huge advantages to a V.A. loan and over the past few years we have outlined many on these pages. 

Along with all the good there comes some bad, at least in the eyes of some, so we’re going to spell them out.

As we’ve repeatedly written you can buy a home using your V.A. loan benefits with no money down. That’s good eh? However, there are some home sellers who see it as a bad. Recently we had a realtor reject an offer on a home saying the buyer “had no skin in the game” because she was not putting any money down. The buyer’s realtor should have told the selling agent the “skin in the game” comes from the Veterans Administration which is guaranteeing the loan. Still, some sellers see it as a negative. Make sure your realtor knows how to convince sellers a V.A. loan offer on a house is a rock-solid offer.

There are home sellers who shy away from V.A. loan offers because of the super strict home conditions required. The V.A. is trying to protect Veterans by putting these requirements on a property. The intention is to prevent Vets from buying money pits. They’re sort of a second set of eyes looking over your shoulder as you determine the quality of the home. This can scare some sellers, especially those who may be trying to hide something.

Perhaps a drawback to some Veterans is the funding fee required. On conventional and FHA loans if you have less than 20% down payment you’re going to pay a monthly mortgage insurance fee. There is no such thing with a V.A. loan. There is however an upfront funding fee. For first time users of the V.A. loan benefits it is 2.15% of the loan amount. If you’ve used your benefit before it increases to 3.3%. These apply to loans with a less than 5% down payment and Veterans and active duty personnel. The funding fee decreases if you have more  money down. We at VALoansMN can provide details.  Keep in mind, this funding fee can be part of the loan so no up-front money is required.

Finally, a V.A. loan cannot be used for secondary or vacation homes. The borrower is required to move into the home within 6 months of purchase and must stay there 1 year unless orders or other unforeseen circumstances occur.

We urge you to call us (612-240-9922) if you’re thinking about taking advantage of this benefit you’ve earned. We are a top, local V.A. lender in the upper midwest (we also serve Florida and Arizona) and are here to help you determine the best route for you to take when buying or refinancing a home. 


Posted by Joan Rusco on July 1st, 2019 9:03 AM

It’s time to set the record straight. We’ve been receiving calls concerning a report on a local tv station that implied the Veterans Administration may be withholding some refunds due to those who’ve taken out a VA mortgage loan. We’re going to drive a truck through some of the holes left in that report.

First, some background on a VA loan. As we’ve written on these pages there is never a monthly mortgage insurance payment on a VA loan, even when you borrow 100% of your home’s value. A VA loan is only mortgage product with that feature. If you borrow more than 80% of your home’s value using a conventional or FHA loan you’re going to pay a monthly mortgage insurance premium (sometimes referred to as P.M.I.). But, as the old cliche goes, there is no free lunch.

Instead of a monthly insurance premium the V.A. charges a one-time, upfront funding fee. This can be rolled into the loan so there’s no out of pocket expense as you acquire the loan. The amount of the funding fee depends on whether or not you borrow 100% of the home value or you’re putting some money down. It also depends whether or not you’ve used your VA mortgage benefit before. If it’s your first time and you’re borrowing 100% of the home’s value you’ll pay 2.15% of the loan amount for regular military. It’s slightly higher for those in the Reserves or National Guard. If you’ve used your benefit before the funding fee increases to 3.3%. These fees are reduced if you’re putting some money down. Call Brad at 612-240-9922 for further details on the fee amounts. As indicated above, and by details we’ve just disclosed, you can see there is no free lunch. But we think this fee is better than a monthly mortgage insurance premium which can add considerably to your monthly payment. 

There’s a major factor in this funding fee that cannot be overlooked. If you have any degree of disability declared as a result of your military service you are completely exempt from the funding fee. This is where we return to that tv report mentioned above.

Fair minded viewers were left with the impression the VA was withholding refunds due to disabled veterans who qualified for the funding fee exemption yet had paid that fee. Close examination of the report showed they did not name a single reliable source in that report. They implied disabled veterans are not getting the refunds they deserve. We suspect any missing refund is simply the result of lack of personal to process the payments. In this spirit we want to be perfectly clear about the process at VALoansMN; when you apply for a loan we’re going to ask you whether or not you have any degree of military related disability. If the answer is yes, we’re going to include that in your application which will exempt you from paying the funding fee. The veterans we serve are not going to be in a position of having to wait for any refund because our veterans will not be charged that fee in the first place. 

Posted by Joan Rusco on June 1st, 2019 11:49 AM

There’s some new data out on VA mortgage rates that Minnesota and Dakota veterans are going to like, a lot!  Readers of our VALoansMN mortgage blog know we’ve been focused on how historically low rates remain.  But these are not just numbers, they are real money-saving-markers in financial history.

When you examine mortgage loan rates over a period of 30 or more years you see an average rate for home buyers of  7 ½%.  Take out the past few years of extremely low rates and that number jumps to around 9%. It’s easy to see why we keep harping on how low today’s rates really are for Minnesota and Dakota veterans wanting to buy or refinance a home. This window of opportunity has been open a very long time.

At the beginning of 2017 mortgage rate prognosticators were saying at best we’d see VA loan rates in the mid 4% range.  Hasn’t happened. In fact, since the Fed starting raising the federal funds rate in 2018 mortgage rates have declined. We’ve written about that previously and encourage you to go back and read those posts for more information. VALoansMN and our broker Leader One are still able to get veterans rates below 4 ½%!. Of course, rates are set on an individual level and your rate may vary (there, we’ve kept the lawyers happy). But let’s get back to what the latest data is showing on VA loan rates in Minnesota and the Dakotas.

For over 48 months VA mortgage rates have beaten rates available to non-veteran citizens.  We’ve noticed a VA loan rate can easily be a quarter of a percent less than other loan rates. But a recent examination by Ellie Mae, a mortgage software company, VA loan rates have beaten regular mortgage rates by at least .25% on any given day and on some days by as much as 1.5%.  No other mortgage loan program even comes close.  We knew our VALoansMN rates were good, but we were surprised by the Sallie Mae finding that our rates are that good!

We’re repeatedly asked that if you’ve not decided to buy or refinance a home using our VALoansMN mortgages reserved for veterans only you need to take action NOW. Call Brad 612.240.9922 or shoot off an email at BChristensen@VALoansMN.com and let us save you some real money for the next several decades

Posted by Joan Rusco on May 13th, 2019 9:28 AM

Watching the tv commercials might leave the impression that the national VA lenders have the best rates, or service, or both. They do not.

We have a client who is in the unfortunate position of going through a divorce and, as part of the settlement, she gains complete title to the house requiring her to refinance her current $200,000 mortgage removing her ex-husband from the loan. She turned to one of the companies she saw advertised on tv. We’ll refer to it as Thicken Loans. It’s a company bragging about it’s service so she thought "that’s exactly what I need". This is when the company’s tv persona turned to something other than the image.

As of this writing 30 year conventional mortgage rates are below 4.5% but that’s not where her rate ended. Despite her excellent credit, solid work history and good money management her rate ended up bumping up to nearly 5%.  The cost of acquiring this loan was about $6,000! Yikes!  But wait, there’s more.

This client is not versed in the language of mortgage loans and didn’t understand the meaning of some of the common terms we use in this business. Terms such as points, title insurance, tri-pull credit report, origination fee, etc. Her discussions with the phone representative at Thicken Loans left her dazed and confused. When she ask a question she felt as though the representative was condescending in his response. And, by the way, she’d better come up with those questions Monday through Friday because if they came up on weekends she was out of luck. “Sorry mam” said the voice mail recording, “you’ve reached us after hours. Please leave your name and a brief message and we’ll return the call when we return”. Uh, okay…I guess.

We bring you this to illustrate why using a local mortgage person such as Brad at VALoansMN may be your best bet despite all the tv ads you’ve seen with retired general, attractive female veteran or famous actors.  We are here, we have the same (or better) rates as they and when you call us, you talk to a person who will get to know you not someone at a computer who says “wait, let me look up your file”.  

We know this post is somewhat self-serving but it is also based in fact. The story you’ve read above is true. We are here for you with the best rates, the best service and knowledge of who you are. As you consider a home purchase or refinance we ask that you look beyond the big buck tv ads and turn back to your own neighborhood. That’s where you’ll find VALoansMN ready, willing and quite able to serve your home loan needs.

Posted by Joan Rusco on April 3rd, 2019 7:41 AM

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