MIRIAM AIAZZI
CityWide Home Loans
4001S 700E Suite 250
Salt Lake City, UT 84107
T: (801)747-2540
C: (801)703-3748
miriam.aiazzi@chl.cc
THE STATE OF VETERAN’S LOANS
The mortgage industry has come under severe stress in the last few months, largely in part to a decline in the sub-prime industry bought about in large part by the unwillingness of Wall Street (and institutional investors worldwide ed.) to purchase mortgage backed securities that carried a higher risk factor.
The last six months has seen many lending institutions going out of business, lenders tightening up lending guidelines and in some instances closing their doors, and borrowers struggling to qualify for mortgages that just six months ago were easier to qualify for than an automobile loan. Well, at least for some….
What has remained a constant in this time of ever changing guidelines is the state of government backed mortgages, namely FHA and VA Loans. In fact the recent Economic Stimulus Act of 2008 singed into law on February 13th has increased loan limits on FHA and VA loans from $417,000.00 to $729,750.00. This is great news for individuals who were previously required to get ‘jumbo’ loan rates, as well as individuals in VA loans seeking to refinance.
What is even more enticing is that no down payment is required for VA loans for both purchase and construction loans if the veteran has full entitlement. This allows veterans to retain their saving for other purposes, and offers an advantage to borrowers who have been unable to accumulate savings.
Furthermore, VA loans do not require mortgage insurance (still required on FHA loans) and neither do they require cash reserves, again allowing veterans to retain their savings.
VA loans also offer fixed rate 3/1 and 5/1 ARM’s, allowing the veteran to select which program best suits his/her needs. VA Loans also allow for a 4% seller concession, which allows the seller to contribute more towards the transaction. VA Loans also allow for a higher debt ratio for easy qualifying and the fact that the loan may be assumed under the original terms if the prospective purchaser qualifies for the loan is an attractive resale option. The borrower also has the option to payoff the loan at any time without restriction or penalty. VA loans can also be refinanced with an Interest Rate Reduction Refinance Loan with no appraisal and no credit qualification. In addition, 90% cash-out refinances are allowed.
The bottom line is that while the press continues to spell out the doom and gloom of the current mortgage industry, VA and FHA loans still remain a highly feasible and lucrative option for borrowers seeking to purchase a home or refinance an existing loan. Indeed, the market is an ideal buyers market. Time is of the essence. Contact me today to get pre-approved for your VA loan.
