Rate Shopping For A VA Loan? Read This First!
I realize that humans are conditioned to shop. Without shopping, it would be impossible to find those golden nuggets in life called “good deals.”
Shopping is satisfying our gut instinct by removing suspicion and doubt that a better deal exists. Therefore, when we shop, we are essentially selling ourselves.
We become “sold” when our gut instinct says “hey, I am happy with the facts we gathered here… let’s go ahead and make the purchase.” Shopping is more than looking for a good deal. Shopping is also conversation and bragging rights.
When it comes to VA mortgages, we tend to shop for a home loan the same way we shop for everything else. We look for the lowest interest rates and when we find them, we act on emotion and gut instinct. Unfortunately, this is a recipe for disaster.
- In this article I’ll examine mortgage rates and the false perceptions surrounding them.
- I’ll prove to you that it’s impossible to accurately shop for VA interest rates over the internet (unless you know what your doing.)
- You’ll also discover why cold calling banks and asking for VA rate quotes is a colossal waste of time.
- And just when you think it can’t get any sweeter- I’ll teach you how to become a true mortgage ninja by removing the VA rate question from your vocabulary and learning to focus on what really matters.
Without further adieu, the first lesson is to stop comparing yourself to everyone else when it comes to interest rates.
Why? Because interest rates are like DNA, and the rate you get is unique to your overall financial situation. Credit score, debt to income ratio, equity position, property location, and loan type ALL play a factor in final interest rate. To accurately quote rate you must have all these questions answered. No exceptions!
VA Loan Limits
When deciding to apply for a VA loan, there are several things to consider.
- Am I eligible to qualify for a VA loan?
- Have I done enough research in order to decide what may be the best and most beneficial VA loan program for my situation?
Before starting the financing process, it’s always a good idea to contact a VA mortgage specialist to be sure your moving in the right direction.
The VA mortgage representative is your best resource for determining the VA Loan limits and also calculating payments on your new loan.
Understanding VA Loan limit guidelines.
Here is how it all works
Veterans receive an entitlement, which means the amount that the government guarantees to the lenders that they will pay in the case in which the veteran is not able to repay the mortgage.
The amount of “entitlement” for a VA loan is $36,000 for any mortgages under $144,000 and 25% guaranteed with loan amounts that are above $144,000 up to $417,000.
The maximum guarantee for a veteran of entitlement is set at $104,250, which is 25% of the maximum amount that can be borrowed, provided the veteran has this amount of entitlement left.
While Veterans can qualify for financing above the VA loan limit, banks typically require 25% down payment on the difference. (For example: $500k purchase price with a $417 VA loan limit = $20,750 down) And just for the record, banks have the ultimate veto power and can require the veteran to cover all the financing above the reported VA loan limits. Using the same transaction from above, that could mean bringing $83,000 to close. A $62,250 difference!
Mortgage Refinance or Loan Modification Can Help You to Save Your Money
A loan modification is quite similar to mortgage refinance as both have an objective to make payments simpler for people facing financial step down. Loan modification can also be called as modified refinance. The line of difference lies in the fact that one has to get the loan refinanced in case of Mortgage Refinance that is look up for a new loan. In case of loan modification, one doesn’t have to look up for a new loan. Simply it is modified to make it affordable.
Mortgage refinancing should be an attractive affordable option, but it is not for quite a large number of homeowners. Here comes in the picture, Loan Modification. It is for those homeowners who have not been able to make their monthly mortgage payments due to financial hardship.
Loan modification is not an act of kindness. Either it mortgage refinance or Mortgage Loan Modification, it is an act in the best interest of the bank. Modification of current loan is a product of current economic condition. According to Obama’s plan “Making Home Affordable” million of homeowners get into affordable monthly mortgage payments, either by home mortgage refinance or loan modification
There are a number of mortgage refinancing institute from where Mortgage Refinance Loans can be obtained. Loan modification is becoming upcoming mainstream. One of the limitation of it is loan can be modified only from the lender or the one serving current mortgage account. Ever lender have different program for loan modification.
How To Select The Right Car Loan Companies?
Everybody dreams of owning a car but paying for it is a great hassle. Most people can afford to pay up only a small part of the cost of the car. This is where “carmoneyfast” online car loan company can help you deal with the financing. However, you need to be familiar with all the aspects of financing a car so that you can negotiate a good deal for yourself. Most people shop for online car loans without realizing all the implications of taking on an auto loan.
Step 1. The first thing you need to do is to talk to people who have already taken on car finance from a particular lender. Find out if they found their services satisfactory. Avoid companies that so not have a good reputation or have a history of fraud. By talking to a number of people you will get a pretty shrewd idea about what kind of deal you are likely to get.
Step 2. The next step to take is to determine your budget. Calculate a monthly installment you are comfortable. This will allow you to decide whether to opt for a new car loan or whether you can only afford used car financing rates.
Step 3. Most potential borrowers look for low car loan rates or fast approval auto loans, without bothering to check the credentials of the lender. It is also important not to reveal confidential personal or financial data, social security numbers for instance, to scamsters who will use it for nefarious purposes.
Step 4. If your credit history won’t stand up to scrutiny, the best thing to do is to go for a car loans without cosigner that lends you money if you can provide a co-signer’s guarantee. However, you need to remember that as the primary borrower it is your responsibility to pay the installments on a regular basis, and that in case you default the co-signer will have to pay up.
Obama’s 2% Rate Loan Modification Plan – How it Works & Which Homeowners Qualify
Obama’s loan modification plan is available for borrowers facing financial hardship and at risk of losing their home. Under this program, your home loan could be revised so that your monthly payment is reduced to an affordable amount. The goal is to keep families in their homes, stop foreclosures and allow the economy to recover.
The plan is called Home Affordable Modification Program-or HAMP. This home retention plan is paid for by the federal government-your tax dollars-so do not hesitate to take advantage of this helping hand. Over 5 million homeowners are expected to benefit under this $75 billion government program. Here’s the basics of the plan:
- All homeowners who ask for consideration must be reviewed for eligibility-even if they have been turned down previously
- Borrowers must show evidence of a financial hardship or the imminent risk of default
- Lenders must follow a standard formula to determine if a borrower meets the federal qualification guidelines-reducing the interest rate to as low as 2%
- Homeowners who meet the basic guidelines will be asked to submit a loan modification application, including a financial statement and proof of income
The banks are motivated to modify as many loans as possible for a couple of reasons. The lenders will be paid by the Treasury Department for each loan they modify using the standard federal terms. Also, President Obama has strongly encouraged all banks to reach out to homeowners to offer this plan-whether they are behind on their payments or not. If a financial hardship exists, then a homeowner is encouraged to begin the application process.
Prerequisites For Loan Modification Credit Facility
In recent times, the mortgages and real estate prices have become unstable, owing to the uncertain market conditions. As a result, many homeowners are considering qualifying for loan modification facilities. To help the troubled homeowner, both the FDIC and the federal treasury are supporting, as well as encouraging home loan modification facilities, so people can continue owning their homes. Ideally, creditors don’t desire to liquidate any debtor’s home, and homeowners obviously prefer “to stay” in their homes even if they default, so the federal government tries to coordinate between the people and the lenders “problems” to work out the ideal loan modification agreement.
Borrowers, who have existing mortgage payment issues, and who are struggling to redeem their mortgage dues may be eligible for a mortgage modification program, if their annual income is not sufficient enough to cater to their mortgage payments, and are facing a risk of being delinquent. Homeowners may be eligible for mortgage loan modification even if they aren’t defaulting upon their payments. However, loan modification companies consider several factors – such as a loss of income, a significant increase in expenses, or an interest rate that will resent to an “unaffordable” level, before “they” draft out a loan modification agreement.
Here are three ways to know if you qualify for a loan modification program:
>> If you own your house, and occupy it as your primary residence
>> If your monthly mortgage payment is greater than 31% of your monthly gross income
>> If your mortgage refinance loan is not large enough to exceed the current “Fannie Mae” and “Freddie Mac” limits
Credit Requirements for VA Loan
Even though the VA loan is more lenient than conventional mortgage programs, there are still credit requirements in order to be approved for a VA loan. Most banks require a minimum 620 credit score and 12 months mortgage history with no lates.
Types of imperfections on a credit report that may affect the VA loan approval process:
- Collections
- Late payments
- Judgments
Payment History Factor
Re-payment history is an important factor in getting approved for a VA loan. Your rental and mortgage payment history signify your ability to pay your housing payment and will better qualify you for a VA loan.
If you lack credit history, provide explanations for any of the following:
- If you are a veteran who has been recently discharged and have not been able to establish credit
- Use cash instead of credit on a regular basis for bill paying and purchases
- Veteran has not used credit since reconciliation of bankruptcy and judgments
Bankruptcy
Bankruptcy does not immediately disqualify a veteran who is applying for a VA loan. If you have had a bankruptcy discharged over 2 years previously to applying for a VA loan it may not be considered. If the bankruptcy discharge was within 1-2 years of applying for a VA loan there are a couple things that are taken into consideration that may still help qualify a veteran:
- If you have obtained credit following the bankruptcy and made satisfactory timely payments
- If reasons for Bankruptcy were above and beyond the control of the veteran-Loss of job, medical bills, divorce, loss of a business etc.
Foreclosure