Tuesday, May 23, 2017

What Happens to my VA Loan if I Die?

If you are a United States service member or a retired service member and need a home loan, the VA offers an excellent choice. Private lenders provide VA loans, and they are guaranteed by the Department of Veterans Affairs. If you qualify for a VA loan, you need to know how the process works.


Eligibility for a VA Loan
If you are a member of any branch of the U.S military, you should be eligible for a VA loan. Spouses of serviceman who were killed in action or have a disability related to service-related injury also qualify for the loan. You are eligible if you have served actively for 90 consecutive days during wartime or if you have served 181 days during peacetime. If you have more than 6 years of service in the National Guard or Reserves, you will qualify.


What is Required to be Approved?
To get a VA loan, you will need a certificate of eligibility to prove that you qualify. This certificate will tell the lender how long you served in the military. You can obtain this certificate online, download it and mail it in.


Advantages of a VA Loan
One of the biggest advantages of this loan is that you are not required to have a down payment. The VA insures 100% of the loan. You are also not required to have private mortgage insurance, which will make your monthly payment amount lower. You do usually need to pay a one-time funding fee, but it can be rolled into your loan. If you cannot make payments on the loan, the VA will try to negotiate with the lender to come up with a solution.


Qualifying for a VA Loan
There is not a minimum credit score requirement; however, most lenders want you to have a score of at least 620. If it is any lower than that, you will pay a higher interest rate. You will also need to show proof of income to show that you make enough money to pay the loan. You must use it for a primary home; you cannot use it for a vacation or investment home.


Applying for a VA loan
You can get pre-approved for a VA loan online with a VA approved lender. You will need to provide your certificate of eligibility along with additional paperwork required by the lender. After you are approved, you can sign the paperwork. An appraisal will be ordered. If everything looks good, you can close the deal.


What Happens if I Die?
If the military member dies before the loan is paid, the spouse or other individual can keep making the payments. If a co-borrower is not available, the veteran’s estate will be obligated for the loan.

A VA loan is a great way for a person who has served in the military to be able to buy a home. You will not need a down payment, and you do not need perfect credit. You can apply with a lender who accepts VA loans, and you will be on your way to owning a new home.

Mortgage Originator Jimmy Vercellino, specializing in VA loans, helps veterans use their VA loan benefit to their greatest advantage. For more details call us at 619-350-1951 or visit our site http://sandiego.valoansforvets.com/

The views expressed here are those of the individual author and do not necessarily represent those of First Choice Bank (NMLS #: 177877) and First Choice Loan Services Inc. (NMLS #: 210764), 959 South Coast Drive, Costa Mesa, CA 92626. Equal Housing Lender. www.fcloans.com/disclaimer/
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Sunday, April 23, 2017

How a VA Loan Specialist Can Help You

The Path to Home Ownership
Eligible U.S. veterans frequently rely on loans from the Department of Veterans Affairs ("VA loans") to finance the purchase of their residences in the United States. This form of home financing is popular with military service members.
Yet the process of completing a mortgage loan application sometimes appears daunting to prospective buyers. Consulting with an experienced VA loan specialist may help.
What Makes a VA Loan So Attractive?
First, why do lenders, real estate professionals and home buyers usually welcome VA loans as a method of financing a real estate purchase? Obtaining this type of mortgage loan offers significant advantages:
Eligible veterans and active members of the military may obtain VA loans;
In some cases, a buyer using a VA loan may acquire real estate with no down payment.
Buyers do not need to pay money at the closing to obtain mortgage insurance when they use a VA loan. The Department of Veterans Affairs guarantees the financing. Home buyers using VA loans do not need to meet minimum credit score requirements. This often allows prospective home buyers with very poor credit to qualify for this specialized type of mortgage financing.
Private lenders appreciate VA loans because they realize the Department of Veterans Affairs guarantees part of the financing. (Provided everyone complies with VA loan requirements, of course). If a home buyer cannot pay the mortgage at some point, and the lender must take back the property, the lender will receive at least partial reimbursement for the mortgage. Essentially, the VA assumes much of the risk of extending financing, not the bank.
How VA Loans Assist Home Buyers
In recent years, property values have risen significantly in many communities around the United States. Since a mortgage down payment typically represents a percentage of the purchase price of a residence paid up front by a home buyer, the ability to rely on VA loan financing has become exceedingly valuable.
For example, a 20% down payment on a $50,000 home requires a $10,000 out-of-pocket payment by the home buyers. Yet when a house increases in value to $100,000, prospective buyers must pay $20,000 down simply to qualify for most conventional mortgage financing. With residential real estate in some cities now exceeding an average price of $250,000, families frequently encounter difficulty raising money to make a down payment. The availability of VA loans greatly assists eligible veterans and active military personnel in becoming home owners.
A Helpful VA Loan Specialist
A capable VA loan specialist assists home buyers in determining whether they meet the eligibility requirements for VA loan financing. The specialist can also provide advice about gathering necessary documentation required to prepare a VA loan application.
Complex rules apply in determining eligibility for these loans. However, numerous veterans, active duty military service people, reservists and National Guard personnel potentially qualify.
Consult a VA Loan Specialist
To explore ways to finance your dream of home ownership, call 619-350-1951. Today, obtaining VA loan financing helps many buyers become first-time home owners!
Mortgage Originator Jimmy Vercellino, specializing in VA loans, helps veterans use their VA loan benefit to their greatest advantage. For more details call us at 619-350-1951 or visit our site http://sandiego.valoansforvets.com/

The views expressed here are those of the individual author and do not necessarily represent those of First Choice Bank (NMLS #: 177877) and First Choice Loan Services Inc. (NMLS #: 210764), 959 South Coast Drive, Costa Mesa, CA 92626. Equal Housing Lender. www.fcloans.com/disclaimer/

 www.fcbhomeloans.com/privacy

Sunday, April 16, 2017

Base Housing vs Buying a Home


Relocating to start a new tour? Exploring housing options available near your base? Or debating between remaining on base or moving off-base and buying your own home? There are pros and cons associated with each of these two options. A closer look will help you to determine which is the best option for you.

What to Expect from Base Housing
Many military professionals enjoy base housing because it is affordable and conveniently located. There are usually amenities close by. A store, a pool, a park for the kids and more. Typically, officers live among other officers. Enlisted personnel live close to others of a similar ranking. If relocating to a new base, you generally do not need to worry about buying out a lease or selling a home. However, many people may be looking for a home that is larger, nicer or otherwise more removed from their workplace. This allows them to “get away from it all” during their off-duty hours. Others may find that the wait list at their home base is longer than their tour length. They may be forced to look for an off-base house.

The Benefits of Buying a Home
Buying a home off-base is a popular alternative to base housing. It provides you with a comfortable place close to the base yet in a removed location. And it is entirely your own. It may provide you with more space to enjoy if you have a family. You can also enjoy the financial benefits of home ownership. For example, each mortgage payment you make is partially applied to principal reduction. As a result, you generally may see your equity increase over time. In addition, you can enjoy certain tax benefits. These benefits include write-offs for your mortgage interest and property taxes. In the event you are relocated, you can sell the home. Or you can rent/lease the home quickly. This can generate a stream of rental income.

The Importance of Reviewing Your Budget
VA loans for military professionals provide you with a wonderful financing solution for paying for your new home. With a VA loan, you will not have to make a down payment. And closing costs are typically affordable. You can expect competitive interest rates and great loan terms. You will still receive a housing allowance if you buy a home. This can be counted as income when you apply for your VA loan. It is important that you review your budget to determine a mortgage payment that is comfortable for you. And, also, to ensure that you can pay for the closing costs.

Whether you are in the military or not, the decision to buy a new home is not a matter to take lightly. Getting pre-qualified for a VA loan will tell you a couple of things. The maximum sales price you can consider. And the mortgage payment for which you can qualify. After pre-qualification, you can then explore local homes for sale in your desired area. These steps can help you to better determine if buying a home is the right move to make.

Mortgage Originator Jimmy Vercellino, specializing in VA loans, helps veterans use their VA loan benefit to their greatest advantage. For more details call us at 619-350-1951 or visit our site http://sandiego.valoansforvets.com/

The views expressed here are those of the individual author and do not necessarily represent those of First Choice Bank (NMLS #: 177877) and First Choice Loan Services Inc. (NMLS #: 210764), 959 South Coast Drive, Costa Mesa, CA 92626. Equal Housing Lender. www.fcloans.com/disclaimer/
www.fcbhomeloans.com/privacy



Friday, April 7, 2017

How to Determine Your Debt-to-Income Ratio


Whether you’re applying for your first mortgage or your fifth, you must know your debt-to-income ratio. It is one of the most important factors used to determine not only whether you can afford a new mortgage, but how much you can afford and at what interest rate. 

Lenders are loaning you their money to buy or refinance a home. Your financial situation, income and debts you owe, are important to them. They must determine if you already have too much debt to repay. 

It’s one of many ways they assess your ability to repay the loan you are asking for from them. They want to know they’re making a wise financial investment.

What is Considered Debt?

There are many questions associated with calculating debt-to-income ratio. ***Not all your monthly expenses are considered debt. But for this calculation, it’s important to know which ones are considered.

- Mortgage payment
- Escrowed real estate and homeowner’s insurance
- Car loans
- Student loans
- Personal loans
- Credit card payments
- Time shares
- Alimony
- Child support
- Loans you co-signed

Things such as your car insurance, health insurance, utilities, and other bills of that nature are not included in the debt portion of your debt-to-income ratio.

How to Calculate Debt-to-Income

The ideal ratio is at or below 36%. But it’s always best to keep your debts as low as possible. The way to calculate this percentage is to add up all debts included in the list above. Then add up all sources of gross income. Gross income is the amount of money you earn each month prior to the subtraction of taxes and other deductions from your paycheck. This is important to note. If you use your net income for this calculation, you will get an incorrect analysis of your debt-to-income ratio.
Once you correctly determine these numbers, take your debt and divide it by your income. This is the percentage of your debt-to-income ratio. For example, if you have $2,000 in monthly debt expenses and $10,000 in monthly gross income, your debt-to-income ratio is 20%. This is low and looks good to lenders.

When your debt-to-income ratio exceeds 36%, it’s not a good sign. Many lenders will refuse to work with you. Or they will require you to spend some time and money paying down your debts. Paying off your mortgage or car loan might not be possible. But paying off any other loans in your name or credit card balances will work in your favor. Your lender will advise you as to what you need to pay off.

It’s also important to remember your current mortgage is not going to be calculated in this ratio if you are applying for a new one. The potential new mortgage you’re applying for is the one that’s calculated when you go through this process. Speak to your lender about any questions you might have regarding your debt-to-income ratio.
Mortgage Originator Jimmy Vercellino, specializing in VA loans, helps veterans use their VA loan benefit to their greatest advantage. For more details call us at 619-350-1951 or visit our site http://sandiego.valoansforvets.com/

The views expressed here are those of the individual author and do not necessarily represent those of First Choice Bank (NMLS #: 177877) and First Choice Loan Services Inc. (NMLS #: 210764), 959 South Coast Drive, Costa Mesa, CA 92626. Equal Housing Lender. www.fcloans.com/disclaimer/
 www.fcbhomeloans.com/privacy

Wednesday, March 8, 2017

Divorce and Your VA Loan -- Now What?


VA loan entitlement is a benefit offered to eligible military members and surviving spouses. Military spouses are included in this benefit by association. This distinction is important because it affects what happens to a VA mortgage in the case of divorce. In a divorce, the non-military spouse loses VA loan rights.

When a VA mortgage is processed, the guaranty remains with the loan even if the veteran stops living in the home. The only way to remove the VA guaranty is refinancing the loan into a conventional mortgage or selling the home so the veteran can become eligible for a new VA loan. Jointly held mortgages are a bit different. In this case, only one spouse needs to qualify for the VA loan and the guaranty is no longer attached only to the veteran borrower.

This can introduce complications. If neither spouse can qualify for a new mortgage and the loan is not paid off by selling the home, the veteran will be unable to take out a new VA loan while the original loan exists.

What Happens to the VA Loan in Divorce?

Couples who own a home together with a VA loan have several options in a divorce.

One solution is selling the property and dividing any equity or debt between the spouses. This option frees both spouses from the mortgage and allows the veteran to become eligible for a new VA loan.

Sole ownership of the home can also be designated to one spouse who can then refinance the mortgage into their name alone. This option also frees the veteran from the loan guaranty. This solution is most common when it's the non-military spouse who will remain in the home.

A release of liability for credit and legal purposes can be requested from the VA instead. In this case, the request is processed by the VA when the veteran and spouse are both co-borrowers but the co-borrower wants to be released from the loan. To be approved for a release of liability the divorce must be final. The entire estate must remain in the former spouse's name.

A loan assumption or transfer may be used as well. In this case, the mortgage is assumed by the purchaser as-is with the remaining balance and loan term. The veteran does not need lender or VA approval to do a loan assumption. A major downside to this option is the veteran is still liable for the loan if the purchaser defaults on payments.

Rather than using a loan assumption with a non-qualifying borrower, a better solution when possible, is a substitution of entitlement. This is another type of loan assumption in which the new buyer has their own VA loan entitlement which is substituted for the current VA borrower's. The veteran spouse will be free to use their VA entitlement to secure a new loan. This option does require that the purchaser have an entitlement sufficient to substitute for the ex-spouse's VA entitlement. The home also must be occupied by one of them.

In a worst-case scenario, neither spouse can get a new loan after the divorce and the home is occupied by either spouse. In this case, the veteran can't get a new VA mortgage until the original loan is paid off through refinancing, a loan assumption, or sale of the home.

Resource:
Mortgage Originator Jimmy Vercellino, specializing in VA Loans, helps veterans use their VA loan benefit to their greatest advantage. For more details call us at 480-351-5904. Visit site: http://sandiego.valoansforvets.com/

The views expressed here are those of the individual author and do not necessarily represent those of First Choice Bank (NMLS #: 177877) and First Choice Loan Services Inc. (NMLS #: 210764), 7702 E. Doubletree Ranch Road, Scottsdale AZ 85258. Equal Housing Lender. www.fcloans.com/disclaimer/