“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.
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.
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!
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.
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!
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.
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.
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.
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!