The VA Appraisal Is Not A Home Inspection

May 12, 2011 Leave a Comment

Choosing the right mortgage for you, as either a Veteran or someone with a VA certificate of eligibility, takes some investigation. Of the different types of Veteran’s mortgages, there are sites for VA Fixed Rate, Adjustable Rate and VA Hybrid reviews. A look into all these types of mortgages can help you pick the right one for you. You should also check out what your loan possibilities are concerning FHA financing as well as using Fannie Mae and Freddie Mac for a conventional mortgage.

The VA home loan program is possibly one of the best mortgage deals on the real estate market right now. Despite that, there are some other steps you should take before buying a new home.

When getting a VA loan for any home, remember that part of the process is getting a VA appraisal. The VA appraisal has fairly rigid guidelines for the appraiser to follow and only determines whether the property meets VA standards for a mortgage and the market value of the house you wish to buy.

With respect to looking at safety issues etc. that aren’t covered by the VA appraisal, you should also think about getting an inspection of your prospective home. It is always in your interest to know the condition of the home, and what potential problems owning it might present. You could also get a roof inspection, a termite inspection, and an HVAC (heating and cooling system) inspection, as well as others. In some cases you may even have to get a potable water test if you are purchasing a home that has a well. Make sure that you speak to your real estate agent for some guidance for what types of inspections are recommended.

Most sellers will let you get your own inspector and arrange for all these types of inspections. Finding repairs that need to be performed can help you negotiate the cost of repairs into the final home price. Make sure that you have some contingencies built into your sale contract in the event that you find some problems and you can’t get them resolved with the seller.

With all home loans, not just VA loans, you as the buyer have the responsibility to get a home inspection to insure that you avoid problems in the future with your new home. Remember the saying – buyer beware.

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Filed Under: VA loans

Important Aspects of Refinancing Your VA Loan

April 12, 2011 Leave a Comment

Popular among VA mortgage lenders is the VA Streamline Refinance. The VA streamline refinance program in its purest sense is a great program for those who already have a VA loan because it doesn’t require an appraisal or a credit underwriting package. However, with the current state of declining home values across most of the US in 2011, many of the approved VA lenders are requiring appraisals and credit information.

Now let’s look at some other aspects of this loan program to see if it is right for you.

In just about every case, you can only use the VA streamline loan if you are lowering your current mortgage interest rate. Only in the case that you are going from a VA adjustable rate mortgage to a fixed rate will the VA allow you to increase your interest rate.

Unlike the case when you got your first VA loan, you do not have to live in the property to get a VA streamline refinance.

Your new loan amount may not exceed your existing Va loan balance, except for allowable fees and closing costs, the funding fee, and up to 2 points. You may also add to your new balance up to $6,000 for qualified and approved energy efficiency upgrades to your home.

You cannot use the streamline refinance for a cash back or cash out loan. You may only use it to refinance your current first mortgage balance. This means that if you have a second mortgage you cannot use the VA streamline refinance program to pay it off.

Any VA lender who offers VA loans may offer you a VA streamline refinance. This also means that you do not have to do your refinance with your current lender. Rather you will have to do your VA streamline refinance with another approved VA lender.

Hopefully some of these tips and suggestions shed some light on this very important loan program for those homeowners who have VA loans and want to refinance.

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3 Common Problem Areas When Getting A Mortgage in 2011

March 18, 2011 Leave a Comment

Getting a mortgage in 2011 is still quite a challenge for many people – even the most qualified. In this post we cover some of the most common challenges you may face if you are trying to get a mortgage – even if it is a va hybrid loan. The three most common problems in 2011 for getting a mortgage are: home values (appraisals), income sources, and employment stability.

Let’s analyze each of these common problem areas.

Home Values – this topic is a major deal killer for sure in 2011, and it is one that can leave many people with an extremely sour taste in their mouth when it comes to their potential mortgage lender. Appraisals for many homes are still showing depressed values from the height of the market that occurred back in 2006. With sagging home values many homeowners around the US are finding it nearly impossible to refinance as their mortgage balance far exceeds their home’s value. With this as the case underwater homeowners are left with no option to refinance and only the option of staying put, or short selling their home, or letting their home go back to the bank in a foreclosure process.For purchase deals, the flip side of the coin is that the property valuation required by the mortgage company can often come in less than the negotiated sales price which could mean the seller declines to sell the home leaving the buyer looking for a new place.

Income – What you make as income and how you prove are one of the most carefully analyzed item on your mortgage application as you qualify for a mortgage.The key in proving income is to be able to show your last 30 days worth of pay stubs and a year to date total as well as the last 2 years of income. You also don’t want to show any gaps of unemployment – of if you do – you will want to be able to thoroughly explain why you weren’t working.

Income Sources – This is a problem for many people in today’s economy. How different income streams trip people up is that they must be established for a minimum of 2 years.What this means is that being a strong credit candidate with money in the bank for downpayment may not be enough if you are self-employed and have only been self-employed for less than 2 years. You may also have problems if you are just starting to get overtime, or you are just starting to get commission income with your new job.

To summarize, you want to make sure you have no unexplained employment gaps, and you need two years of solid employment or self-employment history, while saving as much as you can.

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Filed Under: VA loans

FHA 203k Loan in Arizona: Good For Rehab Projects

March 18, 2011 1 Comment

Many people who are shopping for Arizona homes have found that many of the properties available for sale are either bank owned properties (lots of Phoenix banks have lots of inventory) or short sales. One person I spoke with recently was shopping for Tempe homes for sale that needed a little work. When buying a bank owned property or a short sale, chances are that the home is going to be in need of at least a few repairs — and many times, the most popular loan option for this scenario is the FHA 203k loan.

FHA 203k Program Highlights

The FHA 203k streamline loan has become in demand with the slowdown in the housing market. When a property is owned by the bank, chances are that the property may be in need of a little work and the FHA 203k streamline program is a great option. Some of the frequently asked questions we see about the FHA 203k loan include:

What is the FHA 203k mortgage?

The FHA 203k mortgage loan is a rehabilitation loan that works much like a development loan. The one who is buying the home is able to buy a home that is in need of repairs and is able to mortgage the repair work in the mortgage to fix items in the house. The FHA 203k loan consists of the purchase price of the home plus the construction costs for the work to be performed after close.

An FHA 203k Example Situation:
$100,000 purchase price of home
$20,000 Repairs Needed (see a list of the most common FHA 203k repairs)
$120,000 Total Loan Amount

The offer is the purchase price of the house only. You don’t need to include the cost of repairs anywhere in the sales contract or offer. In the above example, the purchase price on the sales agreement or offer would be $100,000.

Is the FHA 203k loan harder to qualify for than a traditional FHA loan?

Getting an FHA 203k loan is roughly the same as getting a regular FHA loan. What does it take to qualify for an FHA loan? Generally speaking, a credit score above 620, a good job and a down payment of 3.5%. Of course there are more details to being able to qualify, but those are the general highlights.

How do I find a contractor to do the repairs?

It is suggested that you work with a general contractor that can perform all needed repair work. Your loan officer can easily help recommend one they will need to know at least one good contractor. It is also vital that the contractor be practiced in FHA guidelines so that they can include any FHA required items in their contract.

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Sarah Reiter From ReMax: Buy A Home For $100 Down?

March 1, 2011 1 Comment

Are you on Twitter yet? If not, you might want to get on it, you can learn cool stuff.

For example, tonight I learned that you can buy a home for only $100 down.

Really?

Consider this tweet from local Phoenix Realtor Sarah Reiter at Remax:
Sarah Reiter From ReMax: Buy A Home For $100 Down? %spacebasename

Sarah Reiter at ReMax Diamond: Can You Really Buy a Home For $100 Down?

Yes. And Sarah does a nice job of giving us more details and gives us a preview of the home that qualifies. Here is the home that she featured in her tweet:

But after watching this video, I couldn’t help but notice that there were multiple properties available that you could buy for $100 down.

Consider this one in Chandler — According to Sarah in the video, you can buy the property located at 4050 E Beechnut Place Chandler, AZ 85249 for only $100 down because it is a HUD home.

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