Veterans Homebuyers Network
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Monthly Archives: March 2015

Your Credit and the VA Home Loan Program

As a qualifying Veteran you have a rare and excellent opportunity to use your VA Home Loan Benefits to become a homeowner. However, there are certain credit guidelines that must be met.

When looking at your credit report the first thing that jumps out is the credit score number. We all know that low is bad and high is good but what comprises this number. The content of your credit report results in your score. Late payments, missed payments, no payments among many other factors which most potential homeowners are not aware of. Bottom line- if you change the content of your credit report that will correlate to a change in your credit score.

When a VA approved Mortgage Banker reviews your credit to determine whether they will pre approve you for a VA loan a variety of factors are taken into account.  Unfortunately, there are many Veterans whose credit will not meet the VA Home Loan guidelines despite the leniency of the criteria.

At this point most Veterans take action to “Fix” “Repair” their credit. This is when they get into trouble. A large majority of these so-called “Credit Repair” companies out there are not educated of the VA Home Loan Credit guidelines. Therefore, how can they be qualified to work on your credit if they have no idea what results they need to achieve? Additionally, credit repair companies operate in a manner of which they charge you an ongoing monthly fee for their services so logically they want to take as long as possible to get you any form of results. While you on the other hand want to buy a home NOW!!

The Veterans Homebuyers Network has been helping Veterans restore their credit for 15 years and as the VA Home Loan specialists we know exactly how your credit needs to be in order for approval of a VA Home Loan.

If you think or feel you have credit issues please contact us at 917-960-4260 as we are your best option to restore your credit to a level where you will meet the VA Home Loan guidelines.

The Veterans Homebuyers Network – leaving no soldier behind

Veterans Homebuyers Network 

 

Veterans – When is the right time to buy a House or Condo?

In my 20 years of working in the Mortgage and Real Estate industries the most ill informed statement I continue to hear is from potential homebuyers is:

 

“Mortgage Rates are Low – It’s a great time to buy a House”

 

Not only is this a misinformed statement – it’s just simply untrue!!! Most often this is an ideology that is perpetuated by the collusion of mortgage and real estate brokers. Since they only make money when you purchase a home.

 

That being said, if you’re buying a home as your primary residence, then there should be one main reason motivating you.  Simply put, it is because you can afford the expense of becoming a homeowner and you can afford your mortgage payments.

 

Contrary to popular belief mortgage rates are probably one of the least important factors to determine if home ownership is right for you. It is unfortunate that a lot of potential homebuyers are believed into thinking that rates are so important. True, we all want to get a competitive rate, however if you are buying a home just because the rates are low you may be headed for trouble.

 

Let’s Look at some Numbers –

 

A $400,000 30 year fixed rate Mortgage at 4% will give you a monthly payment of $1,908

A $400,000 30 year fixed rate Mortgage at 5% will give you a monthly payment of $2,144

 

That’s a difference of $236 a month, of which all of that can be deducted from your taxes. Therefore, at the end of the day, you will be able to get a tax refund of the additional monies spent on your mortgage payment so the slight difference has no actual effect.

 

The primary factor to consider if you are going to buy a home is that you can afford your mortgage payments. Even if you buy a home when the rates are higher you can always refinance your mortgage when the rates go down giving you a lower monthly payment.

 

The more accurate way of assessing mortgage rates is:

 

“Mortgage rates are low – Now is the time to refinance your Mortgage”

 

The Veterans Homebuyers Network – leaving no Soldier Behind

 

 

A Must Read for Veteran’s Considering a Two Family Home for Rental Income

I have come across a great number of Veterans in the NY area would love to buy a two family home so they can live in one unit and rent the other for income to help with their mortgage payment. However, in most but not all cases, the two family home will cost you more than the traditional one family home. Therefore, most Veterans in order to qualify for a VA Mortgage, large enough to buy a two family home, must rely on the potential income that the rental income will generate

 

However, here’s the Problem!  Several years ago the VA Home Loan guidelines were changed; as a result a potential homeowner can no longer use the projected rental income of the rentable units of a two family home to help qualify for a VA Home Loan. The exception is if the homebuyer has been a landlord and has reported rental income on tax returns for a minimum of a one-year period.

 

Since most Veterans wanting to buy a two family home are first time homebuyers this is an impossible guideline to meet. That being said, there is a solution!

 

The FHA program does allow you to use the rental Income without any landlord experience. Therefore, if one was to initially purchase a two family home using a traditional FHA loan and make the mortgage payments on time for the 1st year, while renting out the second unit during this t year you can then file your taxes having included the rental income on your tax return.   

 

You have now been a landlord for the one-year period and can use your VA Home Loan benefits to refinance your FHA Loan into a VA Home Loan as you now meet the Landlord experience guideline. Since the FHA Loan has no prepayment penalty, when you refinance your FHA loan into a VA Loan you will have eliminated the mortgage insurance payment thereby giving you all the advantages of having a VA Home Loan.

 

There are no problems only solutions!

 

The Veterans Homebuyers Network – leaving no soldier behind.