It’s a long and winding road we travel to get to this new year. Many are saying adios, good-bye, sayonara and finally, get lost 2020. But there’s another and much brighter side to the year just passed.
First among the bright spots of 2020 is the medical technological miracle resulting in the development of a vaccine against Covid 19. Think about this: historically the optimistic predictions on creating anti-viral vaccines say it would take years. The vaccines now becoming available to tame this Covid pandemic took just months. That’s life affirming!
Secondly, and a major focus of our attention, is what has happened to V.A. mortgage rates. At VALoansMN we were offering record breaking loan rates in the upper 3 per cent range at the beginning of 2020. Today, thanks to an accommodating Federal Reserve which apparently is willing to keep the money presses churning, rates are a full percentage point below what they were just one year ago. This is economically reaffirming which allows us to maintain, perhaps even raise, our standards of living.
Given these two developments does 2020 seem all that bad? We at VALoansMN think not. Sure, that long and winding road through the past year had some pot holes. That’s true especially for our veteran brothers and sisters who were not fortunate enough to see their paychecks still coming despite government’s economic shutdowns. Those of us able to maintain our jobs during the hit and miss lockdowns should be most grateful and, at the same time, we suggest, should be most helpful to those who have suffered. We are among those with a deep sense of gratitude.
The road we travel now leads us to the new year. We look forward to continuing our service to those who have served and those serving today in our armed forces. We begin our year together with this Irish prayer:
May the road rise up to meet you.
May the wind be always at your back.
May the sun shine warm upon your face;
the rains fall soft upon your fields and until we meet again,
may God hold you in the palm of His hand
It’s another day and another record low for mortgage rates. That story is becoming old news. Thankfully, so is the election which has dominated the media psyche for months. One of the candidates likes the phrase “speak truth” so let’s do that now.
Truth is, VA mortgage rates in Minnesota and surrounding states are still falling. Most financial pooh-bahs see no change in that for the foreseeable future. Lenders are being swamped with applications for home refinances and purchases. We’re happy to report VALoansMN is still able to handle the rush. We’re still getting loans done and done on time. We understand when you’re buying a home the clock is ticking and time is of the essence. That’s why we prioritize home purchases over refinance requests.
This is not to say we don’t value veterans requests to take advantage of these low rates by refinancing a mortgage. We take them very seriously and GET IT DONE. We simply want to make sure veterans buying homes meet any contractual obligations by performing on time. Don’t hesitate to reach out to us if we can help you save money on your monthly mortgage payment. You’ll be surprised how easy it is to refinance a VA mortgage.
Let’s speak another truth. Aren’t we all glad the election is over and we no longer have to be bombarded with all the political ads? Now there’s one hurdle left. We’re in the Medicare open enrollment period so our tv time is dedicated to ad after ad from insurance companies wanting to enroll seniors. You will be relieved of that on December 7th (Pearl Harbor Day). Then, it’s the Christmas and Hanukkah. But today, let’s just say HAPPY THANKSGIVING!
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!
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.
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.
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.
This holiday season perhaps it’s time to give yourself and your family the gift of homeownership. We’re going to spend some time in the next few paragraphs re-examining the question: should I continue renting or should I buy? First, we need to spell out a few assumptions necessarily made for comparison purposes.
If you are currently renting an apartment or house it may be time to take the plunge and become a homeowner. There are several advantages:
There are some disadvantages as well and at VALoansMN we want you to have the complete picture:
Perhaps a major factor in this consideration is money. Keep in mind we’re using the generalizations outlined above in our money discussion.
Cost of rent can vary depending on the size. A studio can rent for around $1,000 where as a 3 bedroom home will rent for closer to $2,000. What could you buy for about $2,000 a month?
Using Zillow as our source the median home price in Minneapolis is $262,400. This means half of all homes sold in the metro area are price below this number and half are priced above. We’ll us the median price for our calculations.
Here’s the beauty of a VALoansMN mortgage, you do not have to have any downpayment. With your earned VA benefit you can finance 100% of the cost. The monthly payment for our median priced home would be about $1,409. That’s about $600 less than your current rent. Of course there are property taxes to pay. Minneapolis tax rates are higher than the state in general so we’ll use worst case scenario. Taxes on our median price Minneapolis home will run about $300 a month. Then there’s homeowners insurance of about $100 dollars. (You should also be paying insurance as a renter which will likely cost about half the cost of the homeowners insurance). Add up the numbers and you can see you can actually save money by owning your own home.
We need to emphasize that we’ve used very general numbers for this illustration. To drill down on your real costs start with a call to VALoansMN (number for Brad above) then consult with an accountant or financial planner. A little due diligence may uncover a great holiday gift for you and your family. At VALoansMN we want to help you have a very HAPPY HOLIDAY SEASON.