Trans World Assurance Blog

VA Home Loan Programs, Part 3 (Jeff Burch's, Money Book)

Posted on Sat, May 21, 2011

STEPS TO PURCHASING A HOME

1. PRE-QUALIFY FOR A LOAN:
Many lenders will accept your loan application and begin processing the loan for only the cost of a credit report, usually under $25.  Pre-qualifying will:

  • Tell you how much house you can afford to buy.
  • Get your CERTIFICATE OF ELIGIBILITY ordered or updated.
  • Check your credit, and begin repairs if necessary.
  • Keep you from looking at a home you cannot afford.
  • Home sellers and their realtors will look favorably on your offer because they can be confident that your loan will go through.
  • If your credit report is in and your ELIGIBILITY CERTIFICATE is ordered, your loan will close much faster.

2. LOCATE A REALTOR IN THE AREA YOU WANT TO LIVE IN:
As a purchaser, the Realtor works for you FREE (since the seller pays the commission). Certain Realtors will also help you with your closing costs. If a Realtor wants money from you to find you a home, RUN, don’t walk, to another Realtor!

3. WRITE A CONTRACT ON THE HOME YOU WANT:
Your Realtor will prepare this for you. VA contracts contain a clause called the “VA ESCAPE CLAUSE” which protects your EARNEST MONEY if the house does not appraise for the purchase price.

4. APPRAISE THE HOUSE:
A VA approved appraiser will now determine the value of the home. He will note any obvious repairs that need to be done to bring the house up to VA STANDARDS. The VA then reviews his work to further safeguard your interest and issues a VA Certificate of Reasonable Value.

5. LOAN APPROVAL & CLOSING:
VA or a lender’s underwriter approved by VA now issues the final approval and the loan closing is scheduled. You will sign many papers, all approved by the VA. The lender and Title Company are limited in the closing costs; they can charge you. The VA will not let them charge UN-allowable closing costs. This does NOT prevent them from charging you too high an interest rate.   

6. MOVE IN:
Congratulations! You have taken a major step toward financial freedom and wealth building.


OPM—THE SECRET TO WEALTH BUILDING
OPM stands for OTHER PEOPLES MONEY. If you borrowed $150,000 to purchase a home, you have $150,000 of someone else’s money working for you. If your home goes up 5% in value each year, you are getting richer by $7,500 per year or $625 per month!  PLUS, now your gains compound!

EXAMPLE: 5% yearly appreciation on a $150,000 home over a 30-year period.

5th year: $191,442                 
10th year: $244,334
15th year: $311,839
20th year: $397,995
25th year: $507,953
30th year: $648,291

MORE INFORMATION ON HOME LOANS

Tags: Money Book, Jeff Burch, VA, home loans, home ownership

VA Home Loan Programs, Part 2 (Jeff Burch's, Money Book)

Posted on Thu, May 19, 2011

VA STREAMLINE REFINANCE
VA doesn’t abandon you after closing like other loan types. Once you have your VA LOAN, you can refinance to a lower rate as long as you are current on your mortgage payments. Unlike other loans, the VA STREAMLINE LOAN can often be closed in a week!

You do not need:
■ another appraisal
■ to have your credit checked
■ income to qualify
■ to come up with any money at closing
■ to live in the home anymore

VA wants you to have the lowest rate possible and will make it SUPER EASY for you.

VA REFINANCE: CASH BACK, CONSOLIDATION
VA allows you to borrow up to 100% of the current appraised value of your house. The interest rates are the same as regular VA rates. Other types of loans charge higher rates and points for this loan. You will need to qualify to VA standards for this type of loan.

A Veteran can:
■ Refinance another type of loan into a VA.
■ Refinance VA loan to VA loan re-using the same eligibility.
■ Consolidate a first mortgage and a high second mortgage.
■ Pay off high interest credit cards and other obligations.
■ Get cash out to make home improvements.
■ Get cash out to invest in other real estate or for any other reason.
■ Go on a trip, but don’t forget to send in your house payment.

 

This series of articles on VA Home Loan Programs from the Money Book by Jeff Burch will continue tomorrow.

Tags: Money Book, Jeff Burch, VA, home loans, home ownership

VA Home Loan Programs, Part 1 (Jeff Burch's, Money Book)

Posted on Tue, May 17, 2011

VA Home Loan Programs

The VA HOME LOAN PROGRAMS are designed to assist you, the VETERAN, in obtaining the goal of home ownership.
  • VA offers NO DOWN PAYMENT home loans.       
  • VA interest rates are competitive with other types of loans.
  • VA allows you to purchase MORE HOUSE WITH LESS INCOME than other types of loans.
  • VA allows the assumption of your loan by another party that assists you in selling your home.
  • VA allows you to refinance your VA loan to a lower rate with NO APPRAISAL, NO CREDIT CHECK, and NO INCOME QUALIFYING.
  • VA allows you to take CASH OUT UP TO 100% OF THE CURRENT VALUE OF YOUR HOME.
With the assistance of the information in this section, you can begin to enjoy:
  • APPRECIATION in VALUE
  • GREAT tax advantages
  • FREEDOM from WASTED RENT, landlords, base housing
  • PRIDE of OWNERSHIP in your HOME

 

THERE ARE THREE TYPES OF VA HOME LOANS

1. PURCHASE A VA HOME WITH NO MONEY DOWN.
You will be required to put down “EARNEST MONEY” when you write a purchase contract. This money will be returned to you at closing, and is usually used to pay closing costs. Closing costs will estimate around 3%-4% of your loan amount, or $5,250 on a $150,000 home. In addition to this, VA charges a VA FUNDING FEE that can be added to the loan and sales price. VETERANS WITH 10% DISABILITY or MORE DO NOT HAVE TO PAY THIS FEE.

There are several ways to handle these costs!

  • You may pay them with your own funds.
  • You may have the SELLER or BUILDER pay part or all of these costs for you.        
  • You may get a rebate from the REALTOR to pay a portion of the costs.

2. VA LOAN LIMITS
Legislation now allows the VA to use a locality-based approach in determining ceilings on its no-down payment home loans.
To see limits, visit: www.homeloans.va.gov/docs/2009_county_loan_limits.pdf. VA no-down payment loans are available for as high as $1,000,000 or more. If a large VA loan is needed, it may be obtained with a relatively small down payment.

3. EASY INCOME QUALIFYING
The VA uses two methods of income qualifying. The first is that your new house payment and other monthly obligations cannot
exceed 42% of your GROSS INCOME (not take home pay). A veteran making $3,400 per month, including allowances could afford a house payment of $1,428. If the veteran has a $220 car payment and a $50 credit card payment, these must be deducted.


Debt Free Payment                     $1,428
Less Car Payment                          -220
Less Credit Card Payment                 -50
-----------------------------------------------------------
House Payment you can afford      $1,158


VA also uses a generous residual income approach that is more complicated. If you do not qualify by the 42% method, see a VA LOAN SPECIALIST to get the MAXIMUM AMOUNT YOU CAN BORROW. Veterans can borrow MORE with less income than non-veterans can.

 

The benefits of Veteran vs. Non-Veteran purchasing a $150,000 home   

VETERAN   
NON-VETERAN
A debt free Veteran must make $2,753
per month.
A debt free Non-Veteran must make $4,128.
A Veteran buyer must put down $ 0. FHA buyer must put down approximately $4,500.  Home Conventional buyer must put down $7,500.
Veterans' have to add $250 in income, to make up $250 car payment. Non-Veterans’ have to add $750 in income, to make up a $250 car payment!
Typical closing costs $2,077. Typical closing costs $2,822.

 

This series of articles on VA Home Loan Programs from the Money Book by Jeff Burch will continue on Thursday.

Tags: Money Book, Jeff Burch, VA, home loans, home ownership

VA Home Loan Programs (Jeff Burch's Survival Tactics Money Book)

Posted on Mon, May 16, 2011
This week at the Trans World Assurance blog we will feature a series of articles on VA Home Loan Programs from Jeff Burch's Survival Tactics Money Book. This book is written for members of the U.S. Military and is filled with useful strategies on how to stretch, save & spend your paycheck.

"The VA HOME LOAN PROGRAMS are designed to assist you, the VETERAN, in obtaining the goal of home ownership." (Jeff Burch, Money Book)

Be sure to follow the Trans World Assurance blog this week, to read articles on this important topic.

Tags: Money Book, Jeff Burch, VA, home loans, home ownership