Already Used Veteran’s Eligibility to Purchase A Home?

November 28, 2011 by Leave a Comment

talking things over Ft BraggPeople moving to Ft. Bragg, in Fayetteville NC might be moving here with little or no equity.  Did you know that even if you’ve used your VA eligibility before, you can use it more than once… under certain circumstances.

You need to either:

  • Pay off your prior VA loan (for instance, sell the property)
  • The VA allows a one-time only basis, you may have your eligibility restored if your prior VA loan has been paid in full but you still own the property.

In either case, to obtain restoration of eligibility, the veteran must send a completed VA Form 26-1880 to the local VA Center.  (In NC the Eligibility Center is in Winston Salem.)  We suggest that Veterans include evidence that the previous loan is paid in full with a notice from the bank, and a copy of your HUD-1 Settlement Statement.  Including this information will speed up the process, and you will avoid days of delays!

If you allowed the folks who purchased your home to assume your VA loan, you can still get the Eligibility Reinstated.  In the case of an assumption, your Eligibility will be restored if the person who assumed the loan is also an eligible veteran, and they are willing to substitute his or her available eligibility for yours.  This means the person purchasing your home with an assumption, has to qualify for a VA mortgage for you to be eligible for a NEW VA Mortgage Loan.

If you allowed someone to assume the VA Home Loan, and they defaulted, or the Federal government lost money AT ALL, you will not have your VA Eligibility restored. Even if it’s not your fault, and the VA does not hold you responsible.

The same thing is true if  you short sold your home, or did a deed in lieu.  If the VA lost money, they will not reinstate your Eligibility. Although you might be released from liability on the loan and/or the debt was waived, our experience is that the VA will not restore the Eligibility.

We’ve been told pretty sternly that  “The law does not permit the used portion of the veteran’s eligibility to be restored until the loss has been repaid in full.”

If you are considering a home purchase in NC, and have questions about your Veteran’s Eligibility – please call Steve Thorne 919-649-5057, NC’s Veteran Home Loan Expert!  If you want to know VA Home Loan Qualifying basics, click here.

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Surviving Spouse VA Mortgage Loan

March 12, 2011 by Leave a Comment

va home loansIf you or your spouse are Veterans, or Active Servicemen, you might qualify for a 100%, no downpayment mortgage loan that is insured by the Veteran’s Administration.  There are three sets of VA loan eligibility categories, all of which differ based on circumstances including the dates of service and what type of military service is on record.  These are important details, because if you are the Surviving Spouse of a Veteran, you might qualify for this mortgage loan program.

Categories A and B cover veterans, while Category C lists VA loan eligibility criteria for surviving spouses of veterans who died as a result of military service. Eligible surviving spouses may only apply for a VA loan certificate of eligibility by mail, using VA form 26-1817. Those who can’t print the form or find a copy may call 1-888-244-6711 to request a paper copy of the form. (Veterans in categories A and B may apply by mail or electronically.)

The Veteran’s Administration made this as simple as possible, and when we’ve spoken to them, they’ve been very helpful to answer questions.  Surviving spouses of veterans who died while in military service don’t need to submit any additional documentation apart from VA form 26-1817– if the spouse is receiving Dependency and Indemnity Compensation (DIC).

Those who don’t yet receive this benefit must submit the following paperwork along with VA form 26-1817:

  • A copy (no originals) of the DD Form 1300 (Report of Casualty)
  • A copy of the marriage certificate
  • A signed statement saying the surviving spouse would like to apply for Dependency and Indemnity Compensation (DIC)

The Department of Veterans Affairs official state states, “If you qualify for the home loan benefit, you probably qualify for monthly payments under DIC.”  Our underwriters count this DIC income in qualifying you for the mortgage loan.  You will have to provide evidence that you’ve received at least one payment prior to closing.

For surviving spouses of military members who died after military service ended, the VA requires:

  • A copy (no originals) of the veteran’s DD Form 214
  • A copy of the veteran’s death certificate
  • A copy of the marriage certificate

The VA official site also adds, “If your veteran spouse died after service, VA must determine that the death was due to a service-connected disability.”  So, if the Veteran died of NON service related reasons… this program is not available to you.  The process for reviewing this non service related application can take quite a while.  We’ve known it to take up to three months for the VA to process the paperwork, but if the decision has already been made that it was a service-connected death, it zips right through.

Surviving spouses should mail VA form 26-1817 and any supporting documentation required by the VA to:

VA Loan Eligibility Center
PO Box 20729
Winston-Salem, NC 27120

As a reminder, we’ve found that if you write the veteran’s Social Security number on the top of all documents, it speeds the process up some.  VA Mortgage loans are a huge Benefit for Veterans.  These loans are much better (read cheaper) than FHA loans, they don’t have any monthly mortgage insurance, and the qualifying credit requirements are pretty flexible.

If you are a surviving spouse, and believe you might qualify for this mortgage loan – please call Steve and Eleanor Thorne, 919-649-5058.  We do a TON of these loans, we know the guidelines, and we have the LOWEST VA Home LOAN RATES!

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FHA and VA Mortgage Loan Guidelines Waiting Periods

October 25, 2010 by 2 Comments

If you’re like millions of American’s the last couple of years have been tough.  People who have lost their jobs, or their houses, or their business didn’t just wake up one morning and say, “Oh, instead of making my payments, I think I’ll take a trip to Belize!” They never imagined they would be one of “those people” with bill collectors and “dings” on their credit.

Well, the good news is that your credit score is really just a snap shot of the last 24 months. Yes, missed payments will stay on your credit file for 7 years – but their IMPACT on your credit is greatly diminished after 24 months. (If one person on the loan has good credit, and one person has “poor” credit click here).

So if the bad credit, foreclosure, bankruptcy is behind you… how long do FHA and VA make you wait before you can purchase a home again? Below you will find a chart with the Waiting Period and/or guideline for each Program.  Note that there’s another column that says “With Extenuating Circumstances.” That could mean, you were in Florida, lost your job, had to Short Sale, and move to North Carolina to get a new job… you would need to PROVE that the reason you did a Short Sale in Florida was due to the job loss, and you would need to prove that the company that had the Short Sale is not going to come back after you for the deficiency balance (some banks do – some banks do not).

If the chart says “UW Discretion” that means that the UnderWriter needs to make the call… these days, it is our experience that UnderWriting is TOUGH. We MUST make a strong “case” to get any exceptions, we must DOCUMENT the file, and we MUST know what our UnderWriter is looking for.  

n these situations – you need a GREAT loan officer who will WORK FOR YOU!

DerogatoryEvent FHA VA
Waiting Period and/or Guideline Waiting Period and/or Guidelinew/extenuating circumstances Waiting Period and/or Guideline Waiting Period and/or Guidelinew/extenuating circumstances
Bankruptcy Ch 7 or 11 2 years 1 year 2 years 1 year
Bankruptcy Ch 13 1 year with 12 months satisfactory payments to trustee.  Must have court permission (not trustee) to incur new debt.   If not fully discharged for 2 years loan must be manual UW. Same 1 year with 12 months satisfactory payments to trustee and trustee permission to incur new debt. Same
Foreclosure Deed-in-Lieu 3 years UW discretion 2 years 1-year w/current satisfactory credit.
Short Sale Borrower current attime of short sale:

No wait if all mtg and installment debts pd on time for 12 months preceding short sale.

Borrower delinquent

at time of short sale:

3 years from date of sale.

If previous mortgage was FHA, 3 years from date CAIVRS claim was paid.

 Same No guidance.Typically treated as foreclosure but is at UW discretion. Same

If you have questions about FHA mortgages or VA mortgage loans, and how your particular situation will be viewed in North Carolina with our Underwriting Guidelines (because the State of North Carolina has it’s own set of Mortgage Underwriting Guidelines ON TOP of what FHA and VA set out) please call Steve and Eleanor Thorne, 919-649-5058.

We are truly FHA Home Loan and VA mortgage Loan Experts, and we will give you solid advice!  We offer the best interest rates and fees available.

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VA Guarantee Fees and Co-Signors

June 21, 2010 by Leave a Comment

nc military bases

 

 

 

 

 

 

 

When you have a state that looks like this – you can be sure we see many Veterans purchasing homes!

The Veteran’s Administration does not actually “make” mortgage loans – they guarantee those loans, similar to what FHA does.  They charge a Funding Fee which is generally considered a form of mortgage insurance, intended to reduce the overall cost of the program to taxpayers.  The funding fee fomula is currently 2.15% on no down payment loans for a first-time use.  The funding fee for second time users, seeking a 100% loan is 3.3%.  There are also lower funding fees for folks who are making a down payment (which is becoming more popular).  There are those who are exempt from the funding fee.

*Veterans receiving VA compensation for service-connected disabilities.

*Veterans who would be entitled to receive compensation for service-connected disabilities if they did not receive retirement pay.

*Surviving spouses of veterans who died in service or from service-connected disabilities (whether or not such surviving spouses are veterans with their own entitlement and whether or not they are using their own entitlement on the loan).

Please note that the VA has the final say on who is exempt.

The VA does have some pretty specific rules regarding co-signors – for information on VA co-signors click here:

If you are considering a Veteran’s Administration Home Loan in NC – please call Steve and Eleanor Thorne 919-649-5058, we have the best mortgage rates and the lowest fees available!

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Veterans Not Allowed to Pay all Closing Costs

February 16, 2010 by Leave a Comment

A new Good Faith Estimate went into effect on January 1, 2010 and because of all the requirements that go with any new Government Regulated Form… FHA came out in January with a list of fees they felt like were reasonable for Homeowners to Pay and Lenders to Collect.

Which prompted the VA to come out with a clarification on what Closing Costs  they feel are reasonable for a Veteran to pay in connection with a Mortgage Loan!  Here’s the latest from the Veteran’s Administration regarding Closing Cost Fees:

 

One Percent Origination Fee. The lender may charge the veteran a flat fee up to one percent

of the loan amount. The flat fee is intended to cover the lender’s costs and services, which are

not reimbursable as “itemized fees.” For Interest Rate Reduction Refinancing Loans (IRRRLs),

please note that this fee may not exceed one percent of the existing VA loan balance of the loan

being refinanced plus the cost of any energy efficient items less any cash payments from the

veteran – see line 4 on

b. Reasonable and Customary Itemized Fees. Veterans may pay reasonable and customary

amounts for the following services. Whenever these itemized fees relate to services performed

by a third party, the veteran may only pay the

(1) Appraisal and compliance inspections

(2) Recording fees

(3) Credit report

(4) Prepaid items (taxes, assessments, and similar items)

(5) Hazard insurance

(6) Flood determination

(7) Survey

(8) Title examination

(9) Title insurance

(10) Special mailing fees for refinancing loans

(11) Mortgage Electronic Registration System (MERS) fee

(12) Other fees authorized by VA

 

We love doing loans for Veterans, and encourage you to talk to us about the VA Mortgage Loan Programs available to you!  Did you know that it might be to your advantage to make a Down Payment on a VA loan?  Call us about VA Mortgage Loans!  Steve Thorne, 919-649-5058

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VA Loans and Credit Scores

January 15, 2010 by 4 Comments

home loans for veteransHave you seen the new Remax Commercial that says “when he gets home… we’re going to buy a new home!” And then it pans to the guy overseas, and he’s looking for homes on the Internet!  LOVE that Commercial!If you’re one of those folks looking forward to taking advantage of your VA Benefits, check out your credit score!

The Veteran’s Administration does not actually make VA home loans… but they INSURE them.  Because of this, the VA gives guidelines for who they will insure, and what their credit scores should be. I’ve recently been writing that Credit Scores are getting tighter in NC, and I’ve said that “it’s the Golden Rule” because the Banks are the ones who are setting their OWN guidelines about who they will loan money to and under what circumstances. [Read more...]

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PMI For VA Loans??

July 15, 2009 by Leave a Comment

Veteran’s have a great benefit with VA Financing.  It’s a 100% loan, and in most cases, the seller can pay for closing costs.  It’s a conservatively underwritten loan, so there Uncle Sam Wants YOU to buy a house!is little chance that 5 or 6 years from now a Vet is going to be in trouble with a mortgage that they can’t afford!

All mortgage products that have less than a 20% downpayment have some sort of “Mortgage Insurance.”  I call it “Default Insurance,” because it really benefits the bank – in the event of foreclosure, the bank gets a small amount of money to cover some of their costs (It’s not a policy that pays the mortgage off in the event of death).

PMI is what most of us have heard this “Default” Insurance referred to.  For FHA Mortgage Loans, it’s called MIP (click here for details), and USDA Home Loans have a Guarantee Fee, which serves the same default insurance purpose. 

Veteran’s Administration Mortgage Loans also have a Guarantee Fee.  Here are some basic guidelines regarding how much your fee might be:

  • A basic funding fee of 2.0 percent must be paid to VA by all but certain exempt veterans. A down payment of 5 percent or more will reduce the fee to 1.5 percent and a 10 percent down payment will reduce it to 1.25 percent.
  • A funding fee of 2.75 percent must be paid by all eligible Reserve/National Guard individuals. A down payment of 5 percent or more will reduce the fee to 2.25 percent and a 10 percent down payment will reduce it to 2.0 percent.
  • The funding fee for loans to refinance an existing VA home loan with a new VA home loan to lower the existing interest rate is 0.5 percent.
  • Veterans who are using entitlement for a second or subsequent time who do not make a down payment of at least 5 percent are charged a funding fee of 3 percent.
  • Veterans who are classified by the VA as disabled will have a percent (down to zero) of their fee waived.

 Why would a Veteran make a Downpayment???  Because, with the cost of the “traditional PMI” the reduced Funding Fee is much C-H-E-A-P-E-R!$8000 Tax Credit Update~

We love making loans to Veterans!  If you have questions about purchasing a home in Cary, NC using VA financing, or refinancing your VA mortgage please call Steve and Eleanor Thorne, 919-649-5058.

Filed Under: First Time Home Buyer, VA Mortgage Loans Tagged With: , , , , , , , , , , , ,

Veterans and Debt Counseling – It CAN help!

July 13, 2009 by 1 Comment

Under normal circumstances, mortgage lenders can not work with folks who are in Consumer Debt Counseling.   Times being what they are, however, Veterans are able to turn to some of these services, and get another HUGE benefit!

For the last several months we have seen Veterans who are working with NON PROFIT credit counseling agencies, and their scores are going WAY up!  Here are some of the suggestions we have (we do not work for, nor do we get any money from agencies like these – just our suggestions if you want to purchase a home):

  • It must be a NON Profit agency that you work with. 
  • You need to make 12 months worth of on time payments
  • We need a letter from the Agency stating that you are making the payments on time,and that they feel you would be able to handle a mortgage payment of “$XXX.XX”.
  • The Letter from the Agency must show us how the payments are being dispursed each month.

The way this normally show on your credit report is this… Many collection accounts show under “Collections” on the credit report, with an updated Balance and reporting date at least one or twice a quarter.  When you go into a Non Profit Credit Counseling Service – you have an account that you are now making principal and interest payments on.

Let’s say you owe the following in Charged Off, or Collection Debt:

  • NCO / Sears / $500
  • ACS / Pottery Barn / $340
  • Provident / Citi / $950
  • GMAC AUTO LOANS / $2345

You and the Non Profit might work out a payment of $320 a month.  You pay the Non Profit $320, and they send an agreed upon payment to each of those accounts until you pay them off.  So, NCO might get $16, and ACS might get $20, and Provident might get $85, and GMAC might get $180 and the remainder would go to the NON Profit for processing all of the checks.

In recognition of the fact that they are receiving payment each month (with interest) the companies stop showing the account past due.  They report no further lates, and the account as being paid.  With the accounts being shown as “paid” the credit scores will continue to go UP! (For information about MINIMUM Credit Score Requirements for VA Home Loans, click here!)

I think this is a GREAT service for Veterans, and I encourage you to use such a service if you find yourself with accounts that are seriously delinquent!  It stops the calls, it puts the budgeting into regular, manageable payments. 

To learn more about Veteran Benefits and Home Ownership, click here!

If you have questions about purchasing a home using VA Financing / Mortgage Loan, contact Steve and Eleanor Thorne, Corporate Investors Mortgage Group, Inc  919-649-5058

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Applications for FHA / VA/ USDA Mortgages Up!

July 12, 2009 by 3 Comments

According to the Mortgage Banker’s Association in Washington, DC, the applications for “Government” backed loans is MUCH higher than for any other segmant in the market.  Traditionally, if you were interested in purchasing a $300,000 house – you would consider a Conventional Mortgage Loan.  We would often do those loans as 80-15-5 with the borrower putting 5% of thier downpayment into the transaction, and then get two other loans (80% and 15% of the amount needed).  Conventional Mortgage Loans made through the Banks have long DOMINATED the total applications for mortgages in the Country.

That’s why a shift to FHA / VA / USDA mortgages as is BIG NEWS!

“The MBA’s Weekly Mortgage Applications Survey found that the Federal Housing Administration (FHA) and the Veteran Administration (VA) backed 35.9% of all mortgage applications in the month of June, spiking from 25.7% from a month earlier and 27% from June 2008.”

“A primary reason government-insured loans have retained a high share of the purchase market is that these loans typically require lower down payments than conventional loans,” said Orawin Velz, MBA’s associate vice president of economic forecasting, in a corporate statement Thursday.

What does this mean for you, and getting the best mortgage interest rate?

Mortgages can be looked at as a commodity – the more people willing to purchase a government backed mortgage, the better the price will be.  In the past, FHA/VA and USDA mortgages priced 1/2% in interest higher than a Conventional mortgage loan… meaning, if the best Conventional mortgage interest rate was 5% – the best FHA/VA/USDA price (or mortgage interest rate) you could expect would be 5.5%.

We are seeing that margin get smaller – meaning if you have 3.5% to put into a transaction, so that you can get an FHA mortgage, you will probably get a rate of 5.375% or maybe even 5.25% if everything is “lining” up correctly!  Yippee!

For more information on Risk Based Pricing, please click here.

For information on how to get the lowest mortgage interest rates in Cary, NC, and what questions to ask, please click here.

Filed Under: FHA Mortgage Loans, USDA Home Loans, VA Mortgage Loans Tagged With: , , , , , , , , , , ,
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