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/

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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

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