Pros and Cons of a VA Loan

     Are you a Veteran interested in buying your own dream home? If you were honorably discharged, then you can easily opt for a VA mortgage loan.  Confused or having doubts about what a VA mortgage is?  Then let us help you and provide the necessary details.

What is a VA Loan?
     Basically, a VA mortgage is a loan to buy a home, available only to the veterans, active duty, or reservists of the United States Armed Forces, and which is guaranteed by the Veterans administration. This type of loan offers lower down payment requirement than most standard mortgages and lower comparable interest rates. This is possible because the banks know that the loans are backed by a federal agency and the bank will be paid back losses on the loan if it ever defaults. Spouses of veterans are also eligible to get a VA mortgage even if the veteran is deceased.

History of VA Loans

     In 1944 after the World War II the VA mortgage guarantee program was invented so that it could limit the effects of economic and social hardship that the millions of veterans faced in the war. The basic function of the VA mortgage program is to finance or guarantee the conventional mortgages for the eligible U.S. veterans. This program does not lend money directly to borrowers but it only guarantees to lenders that they will recoup 25 percent of a loan if the borrower defaults on it. It therefore gives lenders the incentive to lend to veterans. Only an eligible VA veteran or his family is eligible for a VA Loan. 

Pros and Cons of a VA Mortgage 

     There are three major benefits in having a VA home loan. 

First,  The VA mortgage eliminates the need for private mortgage insurance, an insurance premium the borrower pays in order to protect the lender against borrower defaults. Even the FHA has a very high monthly premium that Veteran loans do not have. 

  

      Second,  A veteran can purchase a home using the VA mortgage program without putting any money down. This is ultimately up to the borrower. If the borrower wants to put money down, he still can do so.

      

     Third, VA mortgage programs provide low, competitive and fixed interest rates often .25%-.5% less than regular conforming loans. 

      Misconceptions about VA Loans

People are of the misconception that the VA mortgage program can be used only once by a qualified veteran, however, this isn't true. This program can be used as many times as needed if all the guidelines are followed perfectly.

People are also under the misconception that the VA makes loans. The VA does not make loans, however they will insure the lender against losses so banks really like this and it gives them an incentive to make loans. So you have to find a bank that makes VA loans and apply with the bank or lender of your choice. 

Colorado VA loan participating lenders 

Homeowners Insurance Covers a Lot More Than Fires

Homeowners Insurance Covers a Lot More Than Fires

Insurance provides a safeguard against risks that may arise from a future event leading to losses. The insurance company accepts the risk of these events for a fee. By spreading out these risks over many thousands of homeowners, the funds will be there for the homeowner that runs into a situation where the loss is just too big to pay from savings. Most of the time, the bank requires an insurance policy to protect a home since it is their collateral for the mortgage loan.

What is the difference between the insurer vs. the insured?

The insurer is the company that offers insurance in exchange of a fee whereas the policyholder (or called insured) is the person who buys the insurance policy and is covered by it. The policy is the contract that details the circumstances and conditions which will be considered for financially compensating the insurer. It also details which events or disasters will be covered by the policy. This is called a loss. Insurance can be purchased to cover almost anything of value.

What are some common losses?

According to most insurance studies analyzing losses from 2000 to 2007, water damage issues causes the most losses. Other common insurance claims are caused by fire, theft claims and dog attacks and bites. If you are buying a home, consider insurance from Brian Hert at Summit Insurance Group. Denver Homeowners Insurance. If you property is anywhere else in the USA, you can get a Homeowners Insurance Quote here.

Insurer vs. Insured

Insurance is a Necessary Safeguard, the difference between Insurer VS. Insured

The insurer is the company that offers insurance in exchange of a fee whereas the insured or policyholder is the person or entity that purchases the policy. The appraisal and risk controls through insurance coverage is done by paying a premium. The contract or policy comprehensively details the circumstances and conditions which will be considered for financially compensating the insured in the event of a loss or claim. Insurance is offered in almost every form of business or can be purchased to protect almost anything of value. Common forms of insurance are:

Auto insurance to protect against theft, accidents, vandalism, and weather events.

Home Insurance to protect against any damage to your home.

Commercial Insurance for protection of business property of all kinds.

Health Insurance protects against medical expenses.

Life Insurance protects your income for loved ones in the event of death.

Disability Insurance protects against a period where you are unable to work for health reasons.

   

Rates Settle Back Down After Election, Path on Housing is Status Quo

The bond market was up after the election of Barack Obama

This indicates to most of the real estate world that the path of low rates and low inventories are likely going to continue.







Today's Rates

• 30YR FIXED -3.375%, (3.25%, Hang on! Almost here!) 
• FHA/VA - 3.25% (varies more between lenders than conventional 30yr Fixed)
• 15 YEAR FIXED - 2.875% - 2.75%
• 5 YEAR ARMS - 2.625-3.25% depending on the lender

Unfortunately, you probably need a credit card

You probably need a credit card

Credit cards are payment cards issued to clients by banks. You can use cash or checks to pay for most items, but sometimes you must have a credit card to shop online, use ATM machines, or rent a car or hotel. Getting a card is simple, you just apply and they send it to you in most cases.

You are not required to pay the bill off every month, but if you don’t pay it off they charge interest. Sometimes the interest can be very high, such as 29%. Some cards have much lower rates than that. It depends on your credit score. If you don't have a good credit score then cards are available for you too. They are usually at a much lower limit, have higher rates, and fees. 

 

As far as the mortgage goes and how it fits with your credit cards, you can still use your mortgage to pay off credit cards if there is enough equity. But you must qualify with the existing payments even though you are paying them off. The mortgage company is going to assume that you will run them back up so they want to make sure you can afford the worst case scenario. 

One more way they have made it a lot more difficult to get mortgages.  

Lennar Dogs Plumas Lake?

I was noticing an article in the LA Times about some homeowners in Sacramento who are suing Lennar homes for pulling out of a development and leaving them 15 minutes away from services like gasoline and groceries that were promised as part of the development. The name of the subdivision is Plumas Lake.

It will be interesting to see if this lawsuit is dismissed. I definitely feel for the homeowners. I just don't know if the courts could force them to build out the community and take a loss. The other option in the homeowners view that would seem to make this right is to give the homeowners their money back for the homes if they paid too much.

Lennar is simply not rich enough to start paying homeowners back for lost equity even if they wanted to.

It will be interesting to watch.

Getting rid of Monthly MI by using LPMI

By accepting  a rate that is approximately .375% higher than the going rate, you can get rid of monthly Mi for a monthly increase that is a fraction of what the monthly premium is.

Example: let's say you are borrowing $300,000 on a home that's worth $330,000. You are paying;

30 Year Fixed (With mortgage Insurance) 4%

$1,575.47 principal and interest
$195.25 Mortgage Insurance
---------------------------------

$1770.72 Payment.



30 Year Fixed (With LPMI, one upfront payment paid by Lender) 4.375%

$1,647.64 Total Payment


So as you can see here LPMI is a much better deal than monthly mortgage insurance. Remember, the lender will pay this FOR YOU if you agree to take a higher rate. Rates for this can be quoted from the Radian website.

Working towards better mortgages

California Mortgage: Financial advisors by your side

California Mortgage Association (CMA) has professionally dedicated itself towards rigorous protection and support of the private money lenders’ rights across California. CMA has been instrumental in providing its members with unparalleled learning programs pertaining to advocacy, legal resources and legislative updates to lend power to their legal voice.

CMA serves to promote the ace industry standards while dealing in lending and investment of private trust deed. At the same time, it offers the members vibrant intellectual learning resources for advancement, protection and preservation of businesses. CMA represents the best interest of licensed money lenders and lobby with state regulators for improving industry regulations.

ColoradoMortgage: Assisting in choosing the right mortgage plan

Colorado Mortgage service intends to bring to your doorstep the most trusted lenders in the Colorado region who have been vouched for trustworthiness, genuine interest rates and transparency regarding loan processing. Individuals adversely hit by bankruptcy or having low credit rating can turn to the professional assistance extended to have their mortgages refinanced.

The services offered cover the entire gamut of mortgage issues pertaining to lowering of monthly mortgage payment, switching to a fixed rate or cashing out to finance heavy expenses. They efficiently guide you to arrive upon the perfect mortgage and will provide with all the mortgage refinance information.

lowaMortgage: Take charge of an unmanageable mortgage scenario

Iowa Mortgage agency professionally and in nonjudgmental manner assists you in tackling your financial challenges pertaining to mortgage. The agency has loads of financial experience to guide you when you are behind on your monthly mortgage payment or is deciding to contact a money lender to ward off impending financial crisis.

Iowans can rely upon the agency to sort out mounting healthcare costs, cope up with a laid off situation or bring under control an unmanageable interest rate. The tailored loan programs offered are convenient enough for handling equity loans, rate reduction or for debt consolidation. The best lenders are compared to arrive at the lowest interest rates.

Creditcards: An insightful glance

Credit cards are handy means to avail goods and services with a line of credit that can be conveniently paid off at a later period. It is prudent to visit online portals which offer comprehensive comparison of the card’s features, interest rates levied, annual fees, bonus points awarded and other relevant features.

This is vital to be safeguarded against any sort of hidden fees, compounding interest and obscure terms. Overdue, late payment penalty fees and charges levied for exceeding the credit limit should be critically checked before arriving at a card. Fees charged for executing transactions in a foreign land is to be ascertained.

Insurance: A sneak preview

Insurance essentially manages risk by equitably transferring the loss risk from the weaker entity to a stronger one in exchange for a fixed payment called premium. This allows for hedging against possible, uncertain losses. Insurance companies estimate the risk, fix a premium commensurate with it and control risk when the unfortunate event has occurred.

The event triggering the insurance claim should have happened fortuitously and must be beyond the control of the beneficiary. Losses should be pure and not in the realm of speculation. The premium should take into account the anticipated cost of loss, policy administration charges and provision of capital to ensure the financial capability of the insurer to pay claims.