Archive for the ‘Buyers with a VA Loan’ Category

The Popular VA Loan in Brooklyn

Saturday, January 31st, 2015
VA Loan

What is a VA Loan? Sellers, find out! You don’t want to miss out on this huge consumer market.

In the previous blog post, Don’t Overlook Buyers With a VA Loan in Brooklyn, we looked at misconceptions home sellers may have about a VA loan and how they could be missing out on this huge consumer market. But what is a VA Loan? A VA Loan is a flexible, government-backed mortgage loan supplied by an approved lender (Veterans United Home Loans, for example). The military loan guaranty program was created by the U.S. government in 1944 to help military service members purchase homes after returning from the field. Since then the VA Loan program has helped more than 20 million veterans and their families purchase homes by providing home financing options that are within their means. The VA Loan program is the most powerful home loan program on the market for veterans and their families. Because of the significant benefits a VA Loan offers to veterans who might otherwise struggle to obtain financing, home ownership is a reality.

Because of the loan program’s definite advantages over traditional mortgage, the VA Loan is increasing in popularity. Those advantages are:

  1. No Down Payment – This is the number one advantage! Service members who are constantly on the move may have difficulty saving money and building credit. But with VA-guaranteed financing, borrowers don’t have to put any money down.

The limit is sometimes much higher in some places, but in most, veterans can borrow up to $144,000 without putting up any cash of their own. Buyers can go above the limit, of course, but for every $4 borrowed after that limit, lenders typically require a down payment of $1.00. For example, if a veteran is trying to borrow $200,000, they would need $14,000 as a down payment. ($200,000 less $144,000 equals $56,000. $56,000 divided by 4 is $14,000).

  1. No Private Mortgage Insurance – Private mortgage insurance (PMI) is insurance that protects lenders in case of a borrower default. If a borrower is not able to put down at least 20%, many conventional lenders will require them to pay private monthly mortgage insurance. This is difficult for many veterans. With a VA Loan, however, there is no PMI. The federal government backs all VA Loans and shoulders the risk on behalf of the borrower typically covered by PMI. This VA Loan advantage allows a veteran to build more and more equity in their home, actually saving them thousands of dollars over the life of their mortgage.
  1. Competitive Interest Rates – Home loan interest rates are based on risk assumed by a financial institution to finance a loan. Because the VA backs each VA Loan with a guaranty, financial institutions carry less risk and can, therefore, offer interest rates of 0.5 to 1 percent lower than conventional interest rates. The savings add up significantly when a veteran is able to combine the advantages of no money down, a very low interest rate when purchasing a home, and no PMI.

Two additional benefits which add to the popularity of a VA Loan are:

  1. Basic Allowance for Housing (BAH) – Lenders can count BAH as effective income, which means a veteran can use BAH to pay some or all of their monthly mortgage costs. Pay grade, geographic location and number of dependents determines BAH. Learn more about Basic Allowance for Housing here: http://www.veteransunited.com/va-loans/basic-housing-allowance-bah/
  1. No Pre-Payment Penalty– Paying off a home loan before it matures results in a pre-payment penalty with many different types of loans. When a homeowner pays off a home loan early, lenders miss out significant amounts of interest. Pre-payment penalties are a financial institution’s way of recouping some of that interest money. An added benefit of a VA Loan allows for a home loan to be paid off at any time without a pre-payment penalty. Without pre-payment penalties, borrowers have the freedom to consider future home purchases and refinancing options.

Many states and many localities offer additional benefits over and above what the government provides. The types of programs vary from place to place, too. To find out what New York state offers for veterans, visit http://www.military.com/benefits.

Look into government programs and the benefits Brooklyn or the county you live in offers. It’s to your advantage. Failing to do so could mean leaving money on the table when you purchase a home.

Since there is no central repository for local information, you’ll have to do some digging. I suggest you start with New York’s VA department.

As your Brooklyn real estate agent, I take my responsibility of service to you as a veteran with a VA Loan very seriously. If you are looking to purchase a Brooklyn home with a VA Loan, please call me, Charles D’Alessandro Your Brooklyn real estate agent with Fillmore Real Estate, at (718) 253-9600 ext 206 or email charles@brooklynrealestatesales.com today.

 

Resources:

http://www.veteransunited.com/va-loans/

http://www.veteransunited.com/va-loans/va-home-loan-advantages/

http://www.latimes.com/business/realestate/la-fi-lew-20141228-story.html?track=rss

http://realtormag.realtor.org/daily-news/2014/12/29/are-vets-missing-out-home-ownership#sf6627801

Don’t Overlook Buyers With a VA Loan in Brooklyn

Thursday, January 15th, 2015
VA loan

Nearly 12% of the 16.4 million active-duty service members and military veterans with a mortgage have a VA loan.

Home Sellers, are you overlooking buyers with a VA loan in Brooklyn? If so, you could be missing out on a huge, fast-growing consumer market. Wanda Petty, president of the Washington, D.C., chapter of the Veterans Association of Real Estate Professionals, says, “Most home sellers have major misconceptions about veterans and active military, so they don’t even try to market their homes to this large population. As a result, they are missing out on a huge consumer market.”

Here are 7 misconceptions home sellers may have about VA loans (VA-guaranteed financing):

  1. There’s too much paperwork involved with a VA loan. Those buying a home with a VA loan need to go through the same steps as someone applying for a conventional loan: 1) prequalification, 2) pre-approval, 3) search for a home in Brooklyn, 4) make offer and 5) process and close on your dream home in Brooklyn.
  2. VA loan appraisals are a nightmare. On average, VA loan appraisals are coming back in a little less than 10 days nationwide. The VA wants service members to purchase solid, move-in ready homes. VA loans are not designed to fund fixer-uppers. A home in good condition makes the VA loan appraisal a breeze.
  3. VA loans are slow to close.  According to AVREP, VA loans close as much as two days faster than conventional mortgages. Most VA loans close in 30-45 days.
  4. VA loans are difficult to qualify for. Qualifying for VA loans is easy for veterans, and when both buyers and sellers know the loans’ limits, the qualifying process flows more efficiently, according to Wanda Petty.
  5. VA loans require a perfect credit score (850 being a “perfect” score). The minimum credit score required by the VA varies by lender. Most VA lenders are looking for a 620 credit score. The average credit score is 525 which compares favorably with the 600 needed for most conventional loans.
  6. Our home may be out of their reach with a VA loan. Few neighborhoods are too expensive for VA loans.
  7. VA buyers are few and far between. Military families are everywhere. They are in your community.  According to the National Association of Realtors, nearly 12% of the 16.4 million active-duty service members and military veterans with a mortgage have a VA loan.

According to Inside Mortgage Finance, a trade publication, the increasingly important VA loan program is among the fastest-growing areas in the mortgage market. At last count, the VA owned nearly 25% of the primary insured-loan market, easily outperforming the Federal Housing Administration (the FHA). Sellers, don’t miss out on this opportunity to sell your home. Don’t overlook buyers with a VA loan!

As your Brooklyn real estate agent, I take my responsibility of service to you as a seller very seriously. If you are looking to sell your Brooklyn home, call me, Charles D’Alessandro Your Brooklyn real estate agent with Fillmore Real Estate, at (718) 253-9600 ext 206 or email charles@brooklynrealestatesales.com today.

Resources:

http://www.latimes.com/business/realestate/la-fi-lew-20141228-story.html?track=rss

http://realtormag.realtor.org/daily-news/2014/12/29/are-vets-missing-out-home-ownership#sf6627801

http://www.veteransunited.com/valoans/note-to-home-sellers-leaving-out-va-borrowers-is-your-loss/

http://www.military.com/money/va-loans/5-va-loan-myths-dispelled.html

http://www.veteransunited.com/realestate/5-most-common-va-loan-myths-busted/

http://www.veteransunited.com/va-loans/