“There’s nothing to fear but fear itself’. Famous words taken from FDR’s 1933 inaugural address. There is today lots of fear mongering. Let’s take a look at some good stuff and put the fears behind us.
Last November we wrote on these pages:
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!
Yes indeed, look where we’re at! Today the picture is even rosier than less than a year ago. That $250,000 VA loan today will cost you over $100 a month less than one year ago. UNBELIEVABLE!
Despite the Covid fears, we are in a housing boom. Will it last? No one knows. There is a fear (there’s that word again) since so many workers have lost jobs we may see a serious rise in the number of foreclosures in coming months. Many lenders offer these unemployed a forbearance meaning they are excused from making mortgage payments with no damage to credit. This payment postponement (not forgiven) lasts from 6 to 12 months. What happens at the end of that period if a home owner still has no income. It could, we emphasize could, start a foreclosure action. But, less than 7% of all mortgages are in forbearance.
We return to the good news. Veterans and active duty military personnel are being give a gift of extremely low loan rates. And the Federal Reserve is now saying they do not see any rise in the Federal Funds rate in the foreseeable future.
Call Brad today at 612.240.9922 and unwrap this financial gift.
There’s probably not been a time when we’ve had such a forced opportunity to examine our current living conditions. For over two months we’ve been told to stay home. How are you feeling about that home? This may be an opportune time to make your move.
In recent weeks we’ve been bombarded with news about the novel virus then came the demonstrations and riots over the death of a citizen at police hands. But there’s other news that may have been crowded out and we at VALoansMN believe it needs to be brought forth.
Given this opportunity to live day after day inside your home with no usual breaks of going to work, socializing with friends and family or anything other than necessary trips to the store you may be having second thoughts about your current living situation. Do I really like the size of my house? Is the neighborhood the kind of place I want to live? If I were to move, how much would it cost? Only you can answer the first two questions but we can help you with the third.
Minnesota veterans have long turned to us at VALoansMN/Leader One for home financing. We’ve been the lender of choice for many of your county’s service officers. We believe we are the number one VA loan choice because we’re local. When you call Brad (612.240.9922) you’re not talking with someone in Denver or Detroit, you’ll be talking with someone who lives where you do, understands your needs as a veteran living in Minnesota, the Dakotas or Iowa. We think that’s important. We’re not a loan factory churning out products to increase our numbers like the 1-800-get-my-mortgage outfits. Now, more than ever, we want to help you in your home financing decisions.
Is now a good time to make a move? Look, given today’s extremely low interest rates you may never be in a better position to upgrade your living situation to better meet your and your family’s needs. The best way to start is to call us at VALoansMN/Leader One. We promise you’ll get honest, straight-forward information about home financing. No sales pitch, just the facts.
So while all the news is about big social issues just know that we are here to help you meet your own personal needs. It’s what we’ve been doing here in Minnesota for over a decade. We’re here when you need us most.
In times such as these there are many who’ve lost jobs or are unable work. Paychecks have stopped coming and the choice may be between paying bills or putting food on the table. We have some good news if you’re in such a condition.
The U.S. government was caught off guard with the onset of the Virus pandemic but it moved quickly to recover. Part of this recovery is what is commonly referred to as the CARES (Coronavirus Aid, Relief, and Economic Security) Act. A part of this legislation applies specifically to our VA Loan holders. If you are among the many who’ve stopped receiving an income your first step should be to call your mortgage servicer. That’s the place where your payments are sent.
The CARES Act directs that if you’re experiencing financial difficulty due to the Virus you will be granted forbearance for up to 180 days. If your financial condition has not improved at the end of that period you have an option to extend another 180 days. In addition you will not be charged any penalties or reported to credit bureaus. Even if you qualify, be very careful.
We have heard of lenders, as part of the forbearance agreement, requiring all delayed payments be rolled into a lump sum or balloon payment at the end of the forbearance period. Lenders, of course, are urging borrowers to make regular mortgage payments no matter what.
This, as you might imagine, is not making lenders happy. We may expect more strict underwriting of loans as a result. Borrowers who still collect paychecks are in a much better position to acquire a VA loan during these unusual times.
Let’s start with a big bite of optimism: In February this economy was on fire. Job creation smashed estimates with 175,000 jobs created in a single month. No estimate saw that coming. The stock market was reaching all time highs. Interest rates were at the historic lows we’ve witnessed for months and months. What a great time to obtain a VA loan. Then, everything changed.
Along comes the Coronavirus from China. Chinese authorities say their first detection was early December but there’s evidence it was occurring as early as October. Thousands of travelers were flying in and out of that infected region daily. President Trump halted travel from China to the U.S. in late January. The first person to person transmission of the virus in the U.S. wouldn’t be recorded until February 23rd. This is the catalyst rocking the mortgage world.
Mortgage rates have been historically tied to the rates of the 10-year U.S. bond. Even that has changed. As the Federal Open Market Committee (commonly referred to as the “Fed”) was cutting the Federal Funds Rate the rate on the 10-year was falling also. But, not mortgage rates. For a number of in-the-weeds factors we saw mortgage rates leap upwards. We’ve also seen lenders tightening requirements. Mortgages have become a bit harder to get.
We have for months on end been urging you to take advantage of VALoansMN extremely low rates. We’ve even urged you to tell friends and family that NOW was the time to act because the low rates can’t last forever. It is disappointing to tell you but, at least for the time being, that window of opportunity may have closed. Notice we said MAY have closed.
VALoansMN Loan Officer Brad Christensen is still able to help you. Now more than ever you need a local, reputable loan officer to guide you through this most turbulent time. Rates are not as low as they were just weeks ago. Loan requirements are a bit tougher also. But, let us assure you, we are here to help you achieve your home finance goals. CALL US TODAY and let us give you an accurate reading of your opportunities to buy or refinance a home with a VA Loan.
We started with that big bite of optimism so let us end with it as well. Financial king pins believe the various stimulus packages being rolled out in the economy are likely to bring back that booming state of affairs we had prior to the virus attack in the U.S. They believe, and we want to believe also, that the come back will take a much shorter time than what some prognosticators believe.
Blown away! That is the best descriptor of our feelings when we were able to lock in a V.A. home loan mortgage rate BELOW 3%. Of course, rates vary day to day. No, correct that, rates vary hour by hour.
You’ve no doubt been hearing about the wild swings in the stock market but less attention is given to what has the most impact on a V.A. mortgage rate-the bond market. We’re not going to crawl too deeply into the weeds here but suffice it to say, when the 10-year bond rates takes a dive, generally speaking, V.A. loan rates follow. That’s what’s been happening recently.
We are thrilled to be able to provide Minnesota (and other states) veterans home loan rates never seen before. We are in a very sweet spot for you to take advantage of these rates and put money in your pocket instead of paying a financial institution.
While veteran home buyers are benefiting from this very rare scenario of basement bottom buy rates, so too can veterans who already have a V.A. mortgage. Refinance rates may not be as low as home purchase rates but they too are way, way down. At VALoansMN and Leader 1 Financial we can demonstrate how you may be able to save some serious dollars by refinancing your V.A. home loan.
Along with all this stunningly good news comes a precaution. As mentioned above, V.A. mortgage rates change hour by hour. Will you be able to get a loan around 3%? We, and no one else, can answer that question without some due diligence. There’s only one sure way to find out. Call Brad at 612-240-9922 and let’s unlock your possibilities.
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.
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:
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!
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!
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”.
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.