valoansmn

Will VA Loan Rates Recede?

Wed, 25 Oct 2023 20:08:50 GMT

Will VA Loan Rates Recede?

It’s difficult to consider today’s VALoansMN rates without revisiting our past writings as we urged veterans to take advantage of our historic low rates. Remember just a few years ago when a mortgage loan was offered at 3% or lower? Those days are long gone but there may be a sliver of silver in these gray economic clouds.

VA loan rates are now well into the 7% range and bumping into the 8s. These rates are fueled by the inflation brought about by the flood of cash flowing into the economy. What was labeled the “inflation reduction act” did just the opposite according to many economists. The challenge before us now is easing that inflation without driving us straight into a recession. That is the dark cloud now hovering above the economic horizon. So where is that silver lining mentioned above?

If history can draw a road map of what happens if the economy heads south then we may see some rate reductions in the future.*. Current economic conditions are having a double whammy on the real estate market.

Higher rates increase monthly payments
Current homeowners are reluctant to give up a current low rate mortgage to finance a new home at higher rates thus curtailing inventory of houses for sale.

To stimulate home buying one of two things (or both) may have to happen. Home prices will decline or mortgage interest rates would come down to stimulate growth. We at VALoansMN are confident we can help veterans have the home they deserve. We work tirelessly every day to help you find affordable solutions.

*For details on recessions and declining rates see this from the St. Louis Fed ( https://fred.stlouisfed.org/series/FEDFUNDS )

Buying A Home-Yours or Landlords?

Tue, 08 Aug 2023 20:21:49 GMT

Buying a Home - Yours or Your Landlords?

You’re making monthly mortgage payments whether you know it or not. The question becomes are you making that payment on your behalf or that of your landlord. At VALoansMN we are prepared to demonstrate why it may be beneficial to you and your family to make that payment on your own behalf. It comes down to the choice between renting or buying a home with a VA loan.

There are some advantages to renting. First, and perhaps foremost, is the commitment to a property. There is little commitment as a renter. The landlord covers maintenance and repairs. You can walk away with little notice (generally 30 days unless there’s a lease involved. Being a tenant requires little up-front cost. This last point can also be said of buying your home with a VALoansMN home loan but more on that later.

To be a homeowner requires some forethought. How long do you plan on staying, can you afford not only the monthly mortgage payment but the maintenance, repairs and taxes. However, the initial upfront costs is minimal thanks the benefits of a VA loan. The VA loan is a rare commodity reserved for those who have served in the U.S. armed forces. A home can be purchased with ZERO DOLLARS down and some of the fees can also be rolled into the loan. We have argued for years here at VALoansMN that this mortgage loan is a true gem in the world of home finance. Never mind where mortgage rates might be today.

As Brad Christensen says you marry the home but you’re only dating the mortgage loan. If rates go down you can refinance the loan. Talk to Brad about how easy that can be. So, as you make your monthly mortgage payment (or rent) ask yourself this: who am I buying this home for? Is my monthly payment purchasing the home (or apartment) for my landlord or for my family?

And the Seer Says...Prices Up/Prices Down?

Sat, 17 Jun 2023 20:53:14 GMT

And the Seer Says...Prices Up/Prices Down?

Thousands of U.S. Veterans are sitting on the sidelines presumably waiting for home prices to decline. That belief may be pricing those side-liners out of the market. As we indicated in a recent blog post here at VALoansMN.com we remain in a sellers’ market. Prices are still going up although certainly at a much slower pace than the off-to-the-races increases we saw in 2021-22. Will this market continue to see increases?

Anyone who predicts the future is playing a fool’s game but we can look at historical information for some sense of what “might” be happening today. Many doomsayers compare this recent robust housing market to 2006-2008 and the bursting of a housing bubble. We’ve discussed differences in previous blogs so we’ll refrain from some repetition. In 2006 there was a government push to make mortgages available to almost anyone with a heartbeat. That policy rsulted in what became known as subprime mortgages. Many of those mortgages went into default and the market was flooded with foreclosures and short sale homes. What happens when there’s an increase in supply and a decrease in demand? Winner, Winner, Chicken Dinner! Home prices fell off the cliff. That is NOT happening now.

We have seen some price reductions over the past year but that trend is now waning. In the Twin Cities area home prices have seen increases month over month of 1% to 4%. So, returning to the side-line crew, you may be waiting for little more than slight price increases. There is, of course, another major player in the housing market and that is mortgage loan interest rates.

We turn again to our crystal ball which, like all others, is VERY cloudy. Might we see a decrease in rates despite the FED’s recent rate hikes? There is historical data showing rates always decline in a recession. The powers-that-be in Washington are constantly saying we’re not heading into a recession. We can expect nothing different from those who want to remain in power. But a substantial number of those in the know say otherwise. This is an appropriate time to once again quote Brad here at VALoansMN: “you marry the house, you date the mortgage”. He of course means if and when mortgage rates decline from current levels you can break up with that loan and get another at lower rates. You don’t have to get rid of the home.

For more details on the current mortgage rates and all things home loans please call Brad at 612-240-9922.

Good to be a Home Seller (and a Home Buyer)

Sat, 20 May 2023 20:55:55 GMT

Good to be a Home Seller (and a Home Buyer)

Sellers still rule the housing market but they’ve lost much of the power they had two years ago. For VALoanMN clients and future clients this is actually good news. You may be thinking “how could a sellers market be good for me as a buyer?”. Here’s the truth about the real estate market: sellers’ markets are known as winners markets because everyone wins. If you’re considering the purchase of a home consider this; buyers prefer not to buy in a buyers’ market.

Generally speaking, in a buyers’ market home prices are going down. Buyers are shy about investing in a home if they believe in a few months or a year from now their house will be worth less than what they paid for it. However, in a sellers’ market home prices tend to increase thus making a purchase more attractive given the price you pay now will be less than the value in the future. Your home may seem like a good investment. So what does this mean to veterans considering the purchase of a home with a loan from VALoansMN?

Interest rates are about double from what they were 2 years ago so it is more expensive to borrow. But if the value of the home is increasing the cost of your mortgager may be offset. In a previous post we quoted VALoansMN’s Brad Christensen saying “you date the mortgage, you marry the house”. For clarification of that phrase call Brad 612-240-9922 so he can explain the benefit of that way of thinking.

Some economists say interest rates may decline due to a coming recession. History shows rates always go down in such an economic downturn. But what if they don’t? What if rates climb further as they did in the late 1980’s. In that period a VA loan rate of around 7% would have been an unreachable goal as rates were well into the teens. Get your VA Loan today and if rates decline in the future call VALoansMN and get a low-cost refinance to the lower rate. If rates continue to climb you’ll be considered a financial whiz for taking out a loan when rates were only 7% (or thereabouts).

Does Anyone Really Know?

Mon, 10 Apr 2023 20:58:01 GMT

Does Anyone Really Know?

If you’re somewhat confused about mortgage interest rates you are certainly not alone. In recent weeks we’ve seen VA loan rates increase dramatically, then retreat, then creep up again and, yet again, retreat from their highs. Let us begin by stating the oft repeated phrase “NO ONE KNOWS WHAT FUTURE RATES WILL BE”. We emphasize no one because of its importance in the statement. No one includes these we’ve come to rely on in the marketplace. This unpredictable future of rates seems to be complicated by an apparent lack of focus at the Federal Reserve as was pointed out in a recent Wall Street Journal opinion piece by University of Chicago trained Economist David Barker:

“The Federal Reserve’s credibility is in tatters. It predicted low inflation through 2021 even as the money supply exploded and higher inflation followed…But instead of lowering inflation and preventing recession, many of the Fed’s 400 economists are busy fighting climate change.”

Given the recent moves by the Fed it is apparent they believe a need for an increase in interest rates may be reduced. History, however, shows us inflation may only be tamed by still higher rates which may place us in a recession. This same history tells us the Federal Reserve’s interest rate (aka the Fed Rate) needs to be higher than the inflation rate. We are much below that rate yet the housing sector is already in a recession. The future of this sector is predicted in an analysis from the consultancy firm Deloitte:

“The housing sector outperformed the broader economy in the wake of the pandemic, as buyers and sellers found ways to navigate the pandemic’s restrictions. But the tables have turned. As the Fed has raised interest rates and inflation appeared, long-term interest rates have moved up dramatically. The result is a decline in housing starts from 1.7 million in Q1 2022 to 1.4 million in Q4. And house prices, which rose sharply starting in the middle of 2021, have stabilized and even started to fall in some places. Lower house prices will not be able to solve the affordability problem, however, because of the jump in mortgage rates…Deloitte expects the fall in construction to end by the middle of this year. Housing may bounce back for a year or two after the current downturn runs its course.”

But, no matter the ups and downs of rates or housing values, we believe the VA Loan benefit you’ve earned is still a very strong contender in the market place. If you purchase a home today and rates climb in the future you’ll feel like a genius. If, on the other hand VA loan rates decrease you are fortunate to be able to use the streamline refinance program available at VALOANSMN. For details on that benefit we encourage you to call Brad at 612-240-9922.

Renters or Home Buyers?

Thu, 02 Mar 2023 22:04:38 GMT

This is a subtitle for your new post

So VA mortgage rates have gone up but it still may make financial sense to consider buying a home. 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.

Here at VALoansMN we consider many factors when offering your personalized mortgage rate. What is one rate for Joe may be somewhat different than the rate available to Jane. There is no one VA mortgage rate but for purposes of this article we’re going to use a general rate which may be higher or lower than your personalized rate. To give you a personalized rate contact Brad at 612-240-9922.
The cost of a house and the cost of monthly rate will vary depending on size, location, availability and other factors. For our purposes we are going to use mean or average prices in the Minneapolis/St. Paul metro area.

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’s no landlord to answer to
You can upgrade or improve the home to your tastes
You may build equity and credit
There may be some tax benefits (although the new tax laws diminish this likelihood)
More stability (especially in schools)

There are some disadvantages as well and at VALoansMN we want you to have the complete picture:

Responsible for repairs, remodeling and maintenance
Could lose money if home values decline
Requires more paperwork
Extra expenses beyond mortgage payments

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 $1,300 where as a 3 bedroom home will rent for closer to $3,500+. What could you buy for about $3,500 a month?

Using Redfin as our source the median home price in Minneapolis is $300,000, down almost 5% from a year ago, St. Paul $254,000 down about 2%, however, Eden Prairie was up almost 19%. This means half of all homes sold are price below this number and half are priced above. We’ll us the median price of $300,000 for our calculations.

Here’s the beauty of a VALoansMN mortgage, you do not have to have any down-payment. With your earned VA benefit you can finance 100% of the cost. The monthly payment for our median priced home would be about $2,000. That’s less than your current rent for 2 or 3 bedroom apartments. 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 $400 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 Brad at VALoansMN (number for Brad above) then consult with an accountant or financial planner. A little due diligence may uncover a great spring for you and your family.

Tips for Your Love Life

Sat, 14 Jan 2023 22:07:29 GMT

Tips for Your Love Life

So, what happens when you fall in love? Are you driven by the passion? Do you overlook any potential problems that might develop in the relationship? Or perhaps you are cautious from the get-go and prefer dating for some time before making a long term commitment. Believe it or not there’s a corollary to buying a house. That is especially true in today’s market.

Back to our tempestuous lover who has fallen head over heals. That can be the result of walking into a home. Some realtors claim a buyer makes a decision on a house within minutes of walking through the front door. Head over heals. But mortgage rates have increased substantially in recent months (although, as of this writing they’ve slipped downward). This love affair is going to cost you money. You just have to have this house. So, what to do?

Brad at VALoansMN has a solution. If you’ve talked to him perhaps you’ve heard him say “date the mortgage, marry the house”. This makes a lot of sense in today’s housing market. As mortgage rates increased there is downward pressure on home prices. About a year ago we were definitely in a sellers’ market. We were seeing great price increases and yet we also saw some multiple offers which, in some cases, drove the sale price above asking. That is not the case now.

The pendulum has swung back toward the buyer giving you more power at the negotiating table. Realtors always seem to say “it’s a good time to buy” but there may be truth in that. Now is a better time to buy than say one year ago. Home prices have stabilized or have fallen. So when you fall for that home remember what Brad says; go ahead and marry the home because you’re only “dating” the mortgage.

Just because you’ve made a longer term commitment to the home doesn’t mean you will end up living with the mortgage for ever. You'll notice home loan rates go up and they go down. No one can predict the future. If you get a VA Loan today at 6% might that rate be less attractive due to a future of falling rates? So take advantage of another VA Loan benefit and refinance at a cost much lower than conventional loans. Remember, you’re only dating the mortgage. You’re not married to it. On the other hand let’s say inflation is unforgiving and rates tomorrow are higher than your 6%. In this scenario you may look like a financial genius for locking in today’s rate.

Don’t let fear of fluctuating rates keep you from your true love. Go ahead, get married to that house and remember, you’re only dating the mortgage . At VALoansMN we will help you with your love life. Well, at least in terms of housing and mortgages.

VA Loans Ride the Rollercoaster

Thu, 15 Dec 2022 22:16:25 GMT

VA Loans Ride the Rollercoaster

Perhaps our version of “build it and they will come” has indeed come to pass. Our version should read “write it and it will happen”. Two months back we predicted, based on historical data, that interest rates will drop in a recession. It’s happened every time since the early 1970’s. At the time of our writing this rates were zooming up, crossing the 7% mark. That is not the case today even though the economic gurus are shying away from use of the word “recession”. Say it isn’t so Joe! But, in fact, it is. Ask anyone on main street. But, here comes that silver lining in an otherwise gray cloud of downward moving economic numbers.

Despite the Federal Reserve Open Market Committee (the Fed) raising it’s Prime Rate 7 times thus far this year we’ve seen some decline in VA mortgage rates here in the upper Midwest. VALoanMN rates have tumbled in recent weeks. We suspect the perception of high rates have not followed suit.

Less than a year ago VALoansMN was able to procure rates in the 3% range. Then came the inflation (stagflation?) in the following months. So as we were getting used to very cheap money here came the increases catapulting to the 7% range. If we’re still seeing 6% mortgages as high it’s only because we’re comparing it to the lower rates available earlier this year. Surely we can all agree that a 6 is lower than a 7 and lower is good, right? But what will happen now?

The short answer is “no one knows”. We do mean NO ONE, not even the Fed (they so misjudged the severity of the inflation why would we trust their prognostications anyway?). We can only harken back to the data we reviewed in our earlier post. In every recessionary period since 1973 mortgage interest rates have DROPPED. The question becomes are we sliding further into a recession in the coming year?

Here’s the rub: you can sit on the sidelines hoping for dropping rates (or home prices) or you can take what’s available today and perhaps look back in a few years and think to yourself “wow, and I thought a VA Loan rate of 6% was high and look where we’re at today!” Any homeowner over the age of 50 can tell you what a high VA mortgage rate is and it is stated in double digits. Rates today may, in the long run, be very attractive.

Finally, we at VALoansMN/Luminate Home Loans wish you good tidings this holiday season. May you and yours make many good memories!

Your Pot of Gold

Thu, 10 Nov 2022 22:20:21 GMT

Your Pot of Gold

The rapid mortgage interest rate increase this year has shocked the real estate market. In 2020 VA Loans were below 3%. Today we’re seeing rates over twice that. Many home buyers or refinancers have not experienced this level of VA loan rates, but there is a silver lining in the rate cloud and it shows the strength of the Veterans benefit. This could be your pot of gold.

We know of a homeowner who took advantage of this Veterans’ benefit in 2020 using his loan to finance 100% of his purchase price. His VA Loan rate is just under 3%. But now, he’s had some life-changes and is preparing his home for sale. Fortunately his real estate agent contacted us and ask about the assumability of his current mortgage loan. Our Veteran is thankful he had sought out an agent who had familiarity with VA Loans.

“Yes”, we said, “another qualified buyer, veteran or not, chooses to buy this homie she can assume the mortgage at it’s current rate”. Our home owning veteran has made about 18 payments on that loan. His principal loan amount has decreased only slightly. Our new homebuyer can purchase this home and assume the current, very low interest rate.

In this somewhat slow real estate market here comes a home for sale that has an assumable mortgage rate less than half of today’s market rates. Here comes a very appealing opportunity for another buyer. This feature is but one of the benefits VALoansMN can offer. However, as they say on TV “wait, there’s more!”.

Staying with our home-selling Veteran he must now find a house in a new location and he will face today’s VA loan rates which are considerably higher than the loan he once had. But, no worries, he’ll obtain another VA loan to purchase his new home and, if rates return to lower levels, he can take advantage of the streamlined refinance offered at VALoansMN. Using this feature here’s no need for an appraisal nor is there any income verification. As Brad at VALoansMN puts it “you marry the house but you’re only dating the mortgage”.

Don't overlook your pot of gold. Call us today and we'll show you how easy it can be.

Here's the Future of Mortgage Rates

Fri, 05 Aug 2022 21:30:26 GMT

Here's the Future of Mortgage Rates

Counting the wrong predictions on mortgage interest rates can be a full time job. As is predicting what’s going to happen with housing prices. Current rumor mill is filled with speculation there is going to be another crash similar to what happened in 2007-8. There’s one huge difference between then and now: government policy.

Back in the earliest years of this century the U.S. Congress, in its wisdom, thought everyone should be able to buy a home. Affordability didn’t matter. That’s when the mortgage industry obliged and began offering what would become known as “liars loans”. All a home buyer had to do was tell a lender with little verification what their income and assets were and bingo, they’d qualify for almost anything. These loans were then packaged up as sub-prime mortgages and sold in the secondary market. Then the chickens came home to roost and the result was, wait for it, a CRASH of home prices. That is not happening today.

When you apply for a VA Loan with us at VALoansMN Brad is going to ensure you can afford it. He’ll ask about your income and assets. He’ll look at your credit history. Do not fear this inquiry. Brad wants you to qualify but he also wants to know a mortgage payment is not going to put an undue burden on you and your family’s finances. A negative on your credit report doesn’t necessarily disqualify you from getting a mortgage. At VALoansMN we look at the whole picture, not just credit history. Some of us have stumbled financially but that doesn’t mean you can’t walk upright again.

We cannot predict for certain what will happen to home prices just as we cannot predict the future of mortgage rates. We are seeing some home price reductions but it may be sellers are now pricing their homes at the point they should have been in the first place. We have seen a cooling in the market but there is still a great bit of demand.

Mortgage rates went from under 3% a year ago to 6% or so. That was a shock to home buyers who still viewed current rates through the lens of 2021. But, as we have written on these pages, a rate of 4.5, 5 or even 6 percent is still a bargain. With inflation above 9% (and climbing) you’ll be paying that 5% mortgage back with low cost dollars. Where are rates headed? We don’t know. No one knows. We predicted 2 years ago the cheap money would come to an end and it has. But we didn’t know when.

When you hear some prognosticator talk about the future of mortgage rates or, for that matter, the future of home prices, we recommend you take that information with a grain of salt (sorry for the repeated use of cliché's but they do seem to accurately describe the situation you might be in).

At VALoansMN we are here to help you travel a road to financial success. We want to HELP you in that journey. It doesn’t cost anything to talk so give Brad a call and let’s see how we might help you achieve your goals.

Whoa - Who Pulled the Emergency Brake on the Housing Market?

Sat, 02 Jul 2022 21:32:27 GMT

Whoa - Who Pulled the Emergency Brake on the Housing Market?

Wow! Who pulled the emergency brake on the housing market? It may seem as though the housing market is making a 180-degree turn or coming to a full stop, but, once put in perspective, it’s more normal than you might think.

Is it a buyers’ market? No, however the heat of the last couple of years on the selling side is starting to cool. What does this mean for a VA Mortgage loan? It starts looking even better than before. We at VALoansMN are seeing the VA backed home loans are now a bargain compared to some other mortgages. You may have noticed recently mortgage rates hovering at or slightly above SIX PERCENT. VA loans were substantially better in many cases. What is the current VA mortgage rate? That is a question we at VALoansMN receive most often. Our answer is “it all depends”. It depends on your credit history, your FICO scores, the amount of debt in relation to your income and more. VA mortgage rates are very individual. Please call Brad (612-240-9922) and he’s more than happy to dig a little deeper with you so you have accurate and timely information. Granted we’ve been focused on home buying and selling but a refinance of a VA loan is still very attractive and easy.

If we’re not in a buyers’ market for housing where are we? Picture this: there are two arm wrestlers. One represents buyers and the other sellers. For the past 3 years the selling wrestler had the strength pushing the buyers arm back to a 45-degree angle. Now the buyers’ side is showing more strength and pushing toward the starting point (90-degrees from the table). As of this writing the buyers are sellers are not equal with arms at 90-degrees. That might soon come.

In an equal housing market we see the rapid appreciation of prices slow to a more sustainable pace. When buyers and sellers have equal bargaining strength we will see home prices appreciate at the rate of inflation. Latest data on that is showing an inflation rate of about 8.5%. Might houses depreciate? No one knows for sure but looking at historical data it does not appear likely at this time. Yes, we are seeing some price reductions but it’s most likely those are sellers who thought they could still get a price inflated during the past 18 months of value. Now, they’re facing the current reality and backing off their dream sales price.

Be aware we are NOT predicting the future of mortgage rates or home prices but we are presenting this opinion based on historical fact. PLEASE call Brad at VALoansMN and let him sort out details which apply to your personal situation whether it be to purchase or refinance your mortgage loan. It’s what we do every day.

Please, Don't Hold Your Breath

webadmin@goluminate.com (Luminate Marketing Team) — Sun, 05 Jun 2022 21:34:25 GMT

Please, Don't Hold Your Breath

Rarely will we at VALoansMN urge readers to rush a decision. That is certainly true today.

The VA loan market is also changing. One year ago we were offering rates below 3%. Currently rates are running in the 5% range. Will they come down? Given the state of the economy we aren’t holding our breath. Still, even with mortgage rates 2+% higher than a year ago borrowing is still cheap. How can that be?

The most optimistic view of the economy puts the rate of inflation at well over 8%. Don’t you wish the price at the pump had only gone up 8% this year? It’s much more likely the cost of goods and services you consume is up much more than the Consumer Price Index showing inflation in the 8.5% range. This is why we at VALoansMN can say VA loans are still very cost effective. Whenever you can borrow at a rate below the rate of inflation you’re winning the money game. Sitting on the sidelines waiting for VA loan rates or house prices to decline is not a winning strategy. Actually if you’re sitting on the sidelines waiting for what you might consider improving conditions there’s no way to win. You’re not even in the game.

The real estate market is also changing. There are many more houses on the market today than at this time last year. We’re seeing an increase in supply and with that is coming increased demand. Therefore, generally speaking, home prices are not declining. Data shows only that the increase in home prices has slowed somewhat but they are still increasing. We discussed this situation in our previous post.

To summarize our thoughts on mortgage rates and housing costs, both have, and continue, to increase. At VALoansMN we are ready to offer you options which might get you back in the game as a winner. Call Brad (612-240-9922) to get a clearer picture of your own place in this changing economy. We want you to WIN!

Don't Be Discouraged About Rates

Mon, 04 Apr 2022 21:37:19 GMT

Don't Be Discouraged About Rates

VA Mortgage rates have gone up but let’s cut through all the media noise and add some perspective. Yes, rates are certainly above their lows of a year ago but, looking at a much longer term than a year or two, we see there is still a reason to consider that VALoansMN refinance or purchase. Study this graph:

Given today’s rates you would see the right end of that graph above 4%. In fact, it has approached 5% which is a rate we last saw about 4 years ago. We remember homeowners coming to us to refinance because rates had dropped all the way down to 5%!

Our crystal ball does not show us the future. No one can accurately predict where rates might be by the end of the year or in coming years so perhaps a decision to purchase or refinance should not be based on recent history. Rates vary almost from hour to hour. When veterans reach out to us at VALoansMN we search lenders from coast to coast to find the best, most affordable rates available. Our number one priority is to help you plan for your financial future. Don’t let the recent mortgage rate past deter you from locking in what we still consider historically low VA loan rates. We are here for you

We're Changing for You

Mon, 07 Mar 2022 22:41:57 GMT

We're Changing for You

Just because our VALoanMN rates have been stuck in these historically low rates doesn’t mean we are also stuck. There are changes coming to this web site. We believe they will be even more user friendly yet still provide the information you need to take advantage of your earned VA benefits in Minnesota, the Dakotas, Iowa and, for those seeking sunshine and warmth sometimes absent from our midwestern states, we offer superb VA loans in Arizona.

As our regular VALoansMN blog readers may know we’ve been here for years providing home purchase and refinance information and to maintain our leadership in VA lending we are working on a new web platform. We think you’ll find the change almost seamless and in many ways better for you to get the information you need to make a decision on how to finance (or refinance) your VA home loan.

VALoansMN is part of the Luminate Home Loans organization. Using the tools and bargaining power of Luminate we are able to bring Veterans a wide range of loan products. Our focus is of course on VA mortgage loans. We’ve detailed the many benefits of this loan reserved for those who have served or are currently on active duty. Luminate opens doors for other loans that might better fit your needs. When you reach out to us we start comparing many loan products and can give you choices.

We’ve been very pleased so many of you have found these blogs, this web site useful. We look forward to better serving your needs with our upcoming changes. Stay tuned, stay informed and most of all, stay in touch with us at VALoansMN.

Here Comes Higher Mortgage Rates-Maybe

Sat, 15 Jan 2022 22:50:27 GMT

Here Comes Higher Mortgage Rates-Maybe

Wow! We just completed a historic analysis of past mortgage rates and what a surprise. As we’ve reported several times on these pages current mortgage rates are at historic lows. We don’t see that changing much anytime soon. Let us give you some historic perspective we gained in our recent analysis. But first, we have a short customer story to pass on.

A client of ours at VALoansMN is searching for a house to buy. This client (who gave us permission to tell you this story) has had a rough financial past. Due to some misfortune this client was forced into a short sale and bankruptcy a few years ago. Now our client is ready to re-enter the housing market. This what is termed the “boomerang buyer”. A buyer forced out of the housing market during a housing recession and now able to come back.

Our client is not unlike hundreds of thousands of other folks who had some hard times but is now recovering and wanting to buy a home. How did our client recover? Following our advice this client immediately opened a few lines of credit. One was an auto loan through a local credit union. Another was a credit card available to someone with a recent bankruptcy. The credit card came with a high interest rate so she paid it off each month. Now she comes to us to pre-qualify for an FHA mortgage (yes, we have those in addition to V.A.). Did she get a surprise!

Just five years after her bankruptcy and three years after the short sale of her home (she’s been a renter all this time) she and her husband easily qualified for an FHA mortgage. This couple has credit scores just under 700. They’re now searching for a house knowing we are able to secure a mortgage. They will once again be homeowners. The loan rate they can get is under four percent! So what about future mortgage rates?

As we’ve previously reported) the FED has is starting to worry about the inflation you’ve been experiencing. Yes, we’ve seen mortgage rates increasing from these historically low amounts. What happened to mortgage rates back in those days of previous rate increases? We were surprised to lean in our analysis, not much. From 2004 to 2006 the FED raised the short term rate (federal funds rate) by 4%. During that period mortgage rates rose less than 1%! Just because the FED is raising rates doesn’t mean you’ll see a corresponding increase in your mortgage rate.

A final word: We are so grateful to you for trusting us with your home mortgage needs. We wish you and yours a very HAPPY NEW YEAR!

Watch Rates Go Up...Maybe

Sun, 12 Dec 2021 22:59:45 GMT

Watch Rates Go Up...Maybe

As we delve into what’s happening to the rate you will pay for a mortgage let us first talk a bit about this holiday season. It is a time of giving and giving thanks. Last month, and we at VALoansMN hope that every month of the year, we express our gratitude for giving us the opportunity to serve. It is a gift we receive from you every day of the year. Again, our most sincere thank you for that. Now we want to give you a piece of advice.

As you have no doubt noticed we have spent some considerable time on these pages talking about the historic VA mortgage rates that have been available for the past couple of years. We believe those days may be numbered so here’s our advice; if you or someone you care for is considering the need for a loan to buy or refinance a house, please, please let us at VALoansMN help you make that move sooner rather than later. We see changes coming, maybe slowly, but they are coming.

The Federal Reserve committee (commonly referred to as The Fed) responsible for much of the interest rate climate in our economy is talking rate increases. Currently the rate the Fed controls is at 0 to 1.75%. Experts expect that rate to rise. What might that do to your monthly payment on a VA mortgage loan?

First, we make an assumption that may or may not be accurate. The assumption we make is if the Fed raises its short term rate, the Federal Funds Rate, by a quarter point we would see a quarter point increase in the mortgage rate. It’s possible we may not see that mortgage rate increase. It is also possible that mortgage rates could increase more than a quarter point. No one, as of this writing, knows for sure what will happen. It is safe to say that as the Fed raises rates VA mortgage rates will increase. Back to our assumption that rates will increase in tandem with the Federal Funds rate and what that means to your mortgage payment.

If you have borrowed $200,000 and your rate is 4% your monthly payment would be about $955. When the Fed hits the target of 3.5% for the Federal Funds rate which is an increase of over 1% that same $200,000 mortgage would require a monthly payment of $1,100 or an increase of about $145! Need we point out that the VA mortgage is much more affordable at today’s rates than what may be coming?

When will this increase occur? That is a very difficult question. Former members of the Fed are suggesting it will take around 3 years. The Fed meets every six weeks. To increase rates by over 3% in three years means an increase of a quarter percent (point) at every other meeting for the next three years. However, it is possible the Fed could raise rates by a half a point or more at one meeting. This is considered not likely given the current state of this sluggish economy. Six months from now it could be a different story.

To repeat the advice we give you this holiday season: please, if you are seeing a need for a new mortgage loan either to purchase or refinance an existing loan, please call us soon so we can make this move more affordable than it may be in the future.

NO Monthly Mortgage Insurance

Thu, 05 Aug 2021 22:02:48 GMT

NO Monthly Mortgage Insurance

It’s a beautiful thing to be able to buy a home using your VA benefit borrowing 100% of the purchase price and NOT PAYING any monthly mortgage insurance fee like that required by an FHA or conventional loan. That is one of the several perks of a loan from VALoansMN. There are others but we’ll take this time to focus on borrowing 100% of a home purchase price with your VA loan.

Here’s some comparison numbers that make your VA loan benefit look even better. An FHA loan only requires 3.5% down. But you’re going to pay an upfront mortgage insurance premium equal to 1.75% of the loan amount. That’s not all. You’re also going to pay a monthly mortgage premium based on the loan amount. If the loan is less than $625,500 multiply your loan amount by .008 and divide by 12. For example:

$250,000X.008=$2,000/12= monthly mortgage premium of $166.67

Let’s repeat and emphasize: VA loan holders pay NO monthly mortgage premium. But you will pay an up front funding fee. At least, most people will pay this up front fee. Some don’t and we’ll explain who doesn’t have to pay any fee later. For now, let’s discuss your VA funding fee.

The funding fee paid up front can be rolled into the loan amount so you can actually borrow 100% of the purchase price PLUS your funding fee. Use these numbers to figure your funding fee:

If you put less than 5% down your funding fee is 2.3% of the loan amount. It decreases if you put more money down.

Money down:

5-9% the fee is 1.65% of the loan amount

10% or more the fee is 1.4% of loan amount.

The above figures are for first time users. If you’ve used your VA loan benefit before the funding fee is greater.

No money down the fee is 3.6% of the loan amount.

5 to 9% down the fee is 1.65%

10% or more the fee is 1.4%

Notice the fees for 5% or more for repeat users are the same as for first time VA loan borrowers.

Our discussion thus far has been about home purchasers. What if you are refinancing? If you’re simply wanting to lower your VA loan rate by refinancing your funding fee is .005 X Loan Amount regardless of prior use or service.

Earlier we suggested not everyone has to pay the up front funding fee. There are numerous exempt veterans. Here’s but a few:

Purple Heart recipients
Veterans who receive compensation for service related disabilities
Veterans who would receive disability payments if they didn’t have retirement pay
Surviving spouses eligible for a VA loan

We hope this may give you an accurate picture of the great benefit you receive thanks to your service. We encourage you to call Brad at VALoansMN/Luminate Home Loans to discuss your personal situation. He is here to help you reach you home financing goals.

The Way to Win in Housing

Tue, 01 Jun 2021 22:04:56 GMT

The Way to Win in Housing

Imagine how one simple action can change your future. We know of such a case and we’ll share it straight ahead. But first it’s time to take a look at what the heck is going on with housing and mortgage rates.

Anyone house shopping today can’t fail to notice how quickly houses are disappearing from the market place. A home is put on the multiple listing service one day and is gone the next. That his occurring in almost every community in the country. Not only are these houses selling quickly, they are selling for prices well above what they were just one year ago. The price increases are due to the economic laws of supply and demand. When either the supply is low or the demand is high the price of any good, even houses, will increase. When demand is greater than supply it too will put upward pressure on prices. In the housing market today we have both a limited supply and an increase demand. There’s one other important factor which might add to the current housing boom. The cost of borrowing money remains extremely low.

Just a few years back we at VALOANSMN saw a rush of house refinancing when rates had dropped to five percent. Today, rates are even lower, in fact, they are much lower. You can thank the Federal Reserve for that. The FED continues to print money and buy government bonds. This demand from the FED keeps bond prices elevated and when bond prices go up the interest rate they offer goes down. We’ll save the explanation ofE why this happens for another time but, for now, just know the FED is the borrower’s best friend.

So what does this mean to home shoppers? In a word it means competition. When more than one buyer wants a home it means you’d better be in good financial shape when you make your offer. When a home seller has more than one offer to consider what can make (or break) your chances of success? The answer takes us back to our opening statement; imagine how one simple action can change your future.

As a home buyer you must have an appealing financial package to present to a home seller. What is this appealing package? It includes a statement from a lender that you are completely qualified to purchase the home at the price you’re offering to the seller. The simple act of picking up the phone and calling Brad at Luminate Home Loans/VALOANSMN might change your life. Brad can help you put together that appealing financial package. Not only that, he will write a letter to the home seller stating your case. This letter is sometimes referred to as a pre-qualification letter or form. Do not fear your financial past. If you’ve had trouble, tell Brad, let him work with you to improve your situation. The simple act of a phone call may be a major step forward in your life’s journey. Here’s the number to get you started on the simple step toward success in today’s frantic housing market:

612-240-9922

VA Loans in a Sellers' Market

Mon, 26 Apr 2021 22:06:21 GMT

VA Loans in a Sellers' Market

Well, just when you thought the real estate and mortgage market couldn’t get any crazier, it does. First let’s look at your prospects of using your VALoansMN mortgage to buy a home.

We are definitely in a sellers’ market. That’s good news and not so good news. The good news is if you are now a homeowner wanting to move up, down or sideways you’ll likely get more money for your house that you would’ve just a few months ago. The not so good news is, you’re now a buyer and you’re going to have to find a house to buy. While your house has been going up in value so have the homes you may want to buy. If you’re buying, you’d better have all your ducks in a row.

The first thing you want to do is call Brad at Luminate Home Loans. That’s the company umbrella where you’ll find VALoansMN. Brad is a VA loan specialist. We don’t mean he just “does” VA loans. We mean he specializes in them. He knows the ins and outs. He knows how to get it DONE. Why is this the first thing to do? Because you’re going out into a sellers’ market to buy your next (or first) home and you’d better be prepared. By preparation we mean you’d better be able to show the seller of the home you want that you are qualified to buy it. A seller wants to know that on the day of closing their money will be there. Brad can help you with this. It’s called “pre-qualification”.

Brad can guide you through this process over the phone. He’ll ask you questions about your financial situation, your job history, your income, your debts. He puts all this info together and he can tell you how much of a loan you can qualify for. He will give you a pre-qualification form or letter which you give to your real estate agent. The agent will bundle that up with your offer to buy a house and present it to the seller. A good real estate agent will supplement this paperwork by telling the sellers’ agent why you should be the one to get the home. There’s a reason for this and we’re going to share some real estate secrets here.

Let’s say you’re a home seller and you get more than one offer (this is likely to happen in today’s market). One of the offers the buyer is using a conventional mortgage and putting down 40 or 50% in cash. The other buyer is using a VA loan and financing 100% of the purchase price. Which buyer, in your opinion, is the more qualified to buy the home? Here’s our answer and the answer we hope you’re real estate agent would have. Both buyers are qualified because on closing day what comes to the seller is ALL CASH. The VA loan represents a buyer who has served the country. The VA loan comes from a lender just like a conventional mortgage except the VA loan has backing from the federal government. That protects the lender from loss. So the one buyer may have a conventional mortgage and money in the bank but the VA Loan buyer is, to some degree, being backed by the Federal Government.

When you select a real estate agent to represent you in this sellers’ market make sure this person is a believer in the use of VA loans. Make sure they can tell that seller why YOU are the one that should get the home. It may make the difference between two (or more) almost identical offers.

Now, pick up the phone and call Brad who is a loan officer that is a believer in VA Loans, who knows how to get it done and will be a major player on your home purchase team. Here’s his number: 612-240-9922. He’s waiting on your call.

Moving Upward and Onward

Thu, 04 Mar 2021 23:13:52 GMT

Moving Upward and Onward

Seems appropriate we would be writing this on March 4th because we at VALoansMN have a story to tell which is based on our continuing to March forth. No doubt you have noticed there’s a new name associated with us now-Luminate Home Loans.

There’s a lot of background rumination behind this change but it boils down to this: we’re watching out for you. Any change we might make is based on the ability to better serve the needs of our Veterans and Active Duty Personnel. When VALoansMN began service well over a decade ago it was to help qualifying individuals navigate the ins and outs of using a VA guaranteed loan to purchase or refinance a home. In those days we thought a mortgage rate of 5% was fantastic. It was, in those days. So much has changed.

We’ve moved on from those early days and today we are part of Luminate Home Loans. While our history shows a long journey we think the path to your success in getting a VA loan has shortened. We know how to navigate that path and we think make it easier for you. Not only easier, but much more rewarding.

Those record-breaking rates of years ago are gone, replaced with even lower, much lower, rates. VA loan rates, like all mortgage rates move up and down but they fluctuate in a rather tight band. In recent days we’ve seen a slight move upward but this move is hardly noticeable in a monthly payment.

We’ve also moved on by becoming licensed to serve VA mortgage needs not only Minnesota where it all began, but now in the Dakotas, Iowa, Florida and Arizona. If you’re planning your own move make sure and check with us so we can bring our home town service to you no matter your new location.

Finally, please update your contact information for us at VALoansMN. Brad is till your go-to guy for everything involving home loans. His phone number remains 612-240-9922. The email (we love getting emails from you) is brad.Christensen@goluminate.com .

As you march forth in your life we’re here beside you waiting to help with anything involving home finance. We’ve enjoyed our trip together so far and look forward to even better things ahead.

LOCK AND LOAD: Be Ready to Make Your Move

Mon, 07 Dec 2020 23:15:33 GMT

LOCK AND LOAD: Be Ready to Make Your Move

Here’s the choice: you have money stuck away in a mutual fund that’s been appreciating at about 7% a year. A veteran can borrow money to buy (or refinance) a home for under 3%. What’s a better choice, taking money out of your mutual fund or using OPM (Other People’s Money) for a home purchase? If you answered OPM then you get a gold star from most financial planners.

The Federal Reserve is indicating they see no change in low interest rates in the foreseeable future. This is very, very good news for our V.A. loan home buyers. In the not too distant past we were urging veterans to take advantage of low V.A. loan rates because they were sure to rise. We no longer take that position. Now we urge veterans to shop for a home wisely taking your time to find the right house. We believe you are not about to see any dramatic increase in V.A. home loan rates anytime soon.

As you begin your search start with us at VALoansMN. Every home shopper should be armed with a pre-qualification letter. This letter puts you in a very strong position when your offer to buy is put to sellers. Even more than that, it puts you in a strong position as you select a real estate agent. Any agent is more likely to work with a home shopper who comes armed with a pre-qualification letter from VALoansMN. What does it take to have this letter? Only a phone call and a short conversation.

When you call us (612-240-9922) we will ask about your current financial situation; do you have any savings, a checking account, a steady job or are you self employed. We ask about any outstanding loans such as a car loan or credit cards. We will ask for your current address and social security number. Then we put all the available information into our system and run a credit report. Do not be afraid of this! VA loan requirements are not as stringent as you may think.

It is possible to get a VA loan even with what you may consider bad credit. First, a reminder. The V.A. is not the lender. The V.A. only guarantees or backs up your loan from a bank or other financial institution. Our lenders look beyond a credit score. They want to see your loan or credit card payment history. Do you make payments on time? They want to see how long you’ve been employed. If you’re self employed they want to know how long you’ve been in business. Do you have any bankruptcies or foreclosures in your past. Not to worry. Our job is to put together your loan “package” and present it in the best light to lenders.

Our goal is find you the best loan possible. We want to make sure you get the best interest rate at the lowest cost. This is our responsibility to you. We also want to ensure you have a V.A. loan you can afford. This why so many Minnesota, Dakota and Wisconsin veterans turn to VALoansMN. We have the experience and knowledge to get it done right. Let us get it done for you today. Pick up the phone and call Brad. There’s never been a better time to take advantage of this great benefit you earned when you served us all in uniform. Now let us serve you.

The VA Loan Gift

Tue, 10 Nov 2020 23:20:51 GMT

The VA Loan Gift

“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.

It's Just Another Day...and It Looks Good for You!

Thu, 05 Nov 2020 23:17:14 GMT

It's Just Another Day...and It Looks Good for You!

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!

Cut Through the Noise

Wed, 07 Oct 2020 22:19:14 GMT

Cut Through the Noise

“Silence is golden”, remember that song from the Four Seasons? The complete idiom is “speech is silver, but silence is golden”. Given all the noise we’re immersed in today we could use a little of that golden silence. Our news broadcasts are wall to wall politics but it seems little has to do with our every day lives. We take a few moments to offer something that does in fact impact your life and your pocketbook.

It is hard to imagine for those of use who have been around for a while that you can borrow money at such little cost. We’ve written previously about the record low VA mortgage rates and we’ve urged veterans and active duty military personnel to take advantage before the opportunity passes you by.

So, given all the noise we’re hearing today about all the bad things happening let’s look for some good vibrations; rates that reached record lows for veteran home buyers and owners are even lower today. Yes, when VA loan rates reached down into the 4% range we exclaimed “this has not been seen in our lifetimes, don’t miss out”. Here we are again proclaiming “this has really, really not been seen in decades and decades.

We at VALoansMN are now offering home purchase loans below 3%! Remember of course there are numerous factors that go into setting rates on a VA mortgage. Your credit history, your income, the value of the home to name a few of these factors but, we can assure you these low rates are not set aside just for the top 1%. They are available for many.

We’ve been specializing in VA lending for over a decade and we know what’s available for home purchases or refinancing. There’s a reason we are the NUMBER ONE VA lender for scores of veterans in Minnesota and surrounding states.

Word from the Federal Reserve is these low interest rates might be around for some time so we don’t want anyone rushing in. Take your time to make the right decision. When you’ve enjoyed some quiet time (that ‘golden’ time) to think things through just know we’re here for you just as we’ve been throughout the years.