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.
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!
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’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!
Regular readers of our posts might recall a year ago we recounted the experience of a team member whose birthday is March fourth. A retired army captain told him “it’s the only command date on the calendar”. Perplexed he thought about that strange assertion until the next encounter with that Captain. “What did you mean by that” he asked. The Captain replied “think about it, when you tell a military person to march forth, what are you saying?
Each year our team member looks at his birthday as a time to “march forth in life, look to the future as a new beginning, a time for change, it's a new year. Is this month your month to ‘march forth’? Perhaps you’ve long thought about making a move to a new house, a different location, something that works better for your ever-changing life. We at VALoansMN may be just the right ticket for your future.
We are happy to report again that VA loan rates have inched up only slightly from a year ago. Our previous posts on these pages have gone into more detail on that topic so no need to belabor it here but, just know that VA backed home loans remain at very attractive and affordable rates. Historically we remain in a very sweet spot.
There are tv commercials from some of the national operations explaining how you don’t have to pay up to move up, that you can finance 100% of the home costs using the veteran benefit you have earned. You already know most of that. What sets us apart is we’re part of your home town, we’re local, we serve neighbors just the same as you would expect. We’re not a big national outfit although we’re approved to lend in the upper midwest states, down in Florida and, most recently, out in Arizona. But we’re here to serve locally. Turns out some of our neighbors are now in a position to move out of the colder winter weather to sunnier places although many maintain their homes here to return in the spring. We’ve expanded just enough to help you wherever you choose to go.
So, this year, if you choose to ‘march forth’ keep VALoansMN in mind. Let us help you move forward using the great benefit of a VA guaranteed home loan.
We have some very good news. VALoansMN is expanding our service area. More on that below. But first, let’s start the new year by getting right to the point; all the talk about rising VA loan rates has been mostly just talk.
One year ago rates on a VA mortgage were hovering just above 4%. Today, we at VALoansMN have rates still below 5%. We strongly believe a VA loan is still one of the very best ways to buy or refinance a home. Some may disagree but that disagreement is mostly based on ignorance.
If you’re seeking to buy a home using your VA benefit don’t be surprised to hear some real estate agents say sellers don’t like VA loans. If that happens to you have your agent call us so we can help them get over that hurdle. The VA does have some requirements that are not present on other loans. They want to make sure the home you're buying is in good shape. They have their own inspection guidelines. Any home that can’t pass a VA loan inspection is home you probably don’t want anyway. It’s not a stringent inspection, just a little more detailed than your run of the mill inspection.
Banks and other lenders should love the opportunity to grant a VA loan. In a survey of over 40-million home loans the VA mortgage has the lowest foreclosure rate. Less than 2% of VA loans ever go into foreclosure. Even highly rated prime loans have a higher forclosure rate (almost 3%). The VA doesn’t originate the loan, the simply guarantee it. If a veteran is having trouble making mortgage payments the VA will step in to see what can be done to help save the home.
When you call VALoansMN we do the legwork for you. We shop banks and other lenders looking for your best rate. We know which lenders like working with VA loans so you don’t have to waste your time trying to find your perfect fit.
Now the good news about our expanding service area. So many residents of the upper midwest are making winter moves (hello snowbirds!) to the sunny climes of Arizona. We are very excited to say we can now help those making the move by originating home loans in that state.
Finally, we have so may readers and we’d like to get to know each of you better. Tell us how we can help you with your home financing. Call Brad 612-240-9922 and let’s talk about your needs. We look forward to meeting you in 2019!
The economy is booming with growth now reaching 4% a year. The housing market is showing this strength. The message here: don’t be discouraged by rising prices and the recent increases in VA loan rates here in Minnesota. Turning to those rising rates we see the VA loan rates are still, from a historical perspective, low. One year ago VA loan rates averaged just over 4%. They’ve increased less than one percentage point. Of course, VA loan rates are dependent on your own financial situation. Call Brad at VALoansMN and get a much more accurate reading of your own rate possibilities.
The growing economy is also resulting in an increase in home prices. While we at VALoansMN serve veterans in Minnesota, the Dakotas, Wisconsin and Iowa. For our purposes we’re going to isolate the housing market in Minneapolis.
The Redfin real estate brokerage reports for the past three months the Minneapolis real estate market has become quite competitive. Using a scale of 1 to 100 where 100 is the most competitive we find Minneapolis with a 90 rating. Here’s how that translates into you’re finding and buying a home using your VALoansMN mortgage.
According to Redfin the average price of a home in Minneapolis has increased 5.2% in the past year. The price per square foot is currently averaging $163. Don’t get bogged down on the price per square foot. It's a valuable number for builders but means little for home shoppers. Price per square foot tells you zip about location, landscaping and other pertinent factors considered when choosing a home.
About that competitive market number mentioned earlier; when you find your dream home you may be competing with other buyers. According to Redfin data typical homes in Minneapolis are receiving up to 3 offers. It is not unusual for the winning bidder to pay anywhere from 1 to 4% above asking price. We at VALoansMN cannot emphasize enough: you need to be prequalified for your mortgage before you find the house you want. Brad at VALoansMn will provide a pre-qualification letter to use when making an offer. Sellers want to know if they accept your bid you will be able to secure financing. This letter will go a long way toward establishing confidence in the offer. A good realtor should also emphasize your status as a U.S. veteran. Many home sellers will give preferences (as they should) to those who have served.