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Eligibility and benefits of VA loans

September 7th, 2010 by Eric Kandell

The government tries to provide some benefits to members who serve the country. Among the other benefits that are available, is the department of veteran affairs loan program for home buyers. VA loans are mortgage loans that are designed to offer long term financing to all eligible veterans or their surviving spouses. In case you want a loan from a private lender and things are such that you can’t pay your lender then VA stands behind and guarantees that the lender’s money will be paid.
Not all are eligible for the VA loan. You will be required to have a certificate of eligibility to get a VA loan. The people who are eligible for a VA loan are as follows.

  • Active duty personnel
  • Veterans of different fields
  • Some National Guard members
  • Surviving spouses of persons who have died while on duty
  • The spouses of personnel who are missing in action or taken captive

The VA loan has several advantages over the conventional loan. Some of the benefits of VA loans are as follows :
1. No down payments: Under this program there has to be no money down. The eligible buyers can finance 100 percent of a home’s price without making any down payment. Conventional loans have very high down payment requirements. They at least require 20 percent of the value of the house as down payment. Thus, a lot of people can not afford to take out these conventional loans. The advantage in case of VA loans is that they do not require any down payments.

2. Processed faster: If you are a potential buyer then you must submit your application and request for an appraisal of the property. This should be done before obtaining a VA loan. Some lenders, who have the VA approval for processing automatically, can finalize a loan. They do not need to wait for VA to review the application or the appraisal.

3. Protection of the lender: The VA guarantees that it will provide repayment of the loan in case the borrower can’t. Thus, the lender is safe from any loss in the event of the borrower not being able to pay. This attracts the lenders and so they help veteran buyers in getting better loans.

4. Lowers cost of the buyer:
In case of the VA loan the funding fee is approximately between half and 3.3 percent. This may be included in the loan or is supposed to be paid out–of–pocket. The loan is designed in such a way that it is meant to reduce the cost for the buyer.

5. Flexible loan:
These VA mortgage loans are not only for purchasing homes. They can also be used to build a new house or buy land. You may also take the loan out to make improvements to an already existing house. Thus, there is flexibility when it comes to VA loans.

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VA loans with Wells Fargo should be streamlined with Flagship Financial

September 1st, 2010 by Eric Kandell

Something that most military home owners are not aware of is that brokers or mortgage companies that have access to wholesale rates sheets can get them a much lower rate than if they (Veteran) were to call Wells Fargo themselves.  This may not make a lot of sense on the surface but if you have ever shopped at Costco or Sam’s club then this example may help.

Why can Costco sell you a bottle of shampoo cheaper than if you were to go directly to lets say Johnson and Johnson’s website and buy it directly from the supplier?  The answer is simple.  Costco has negotiated huge discounts due to the volume of shampoo they buy, due to the fact that they (costco) spend money marketing and selling the shampoo and now this is money that Johnson and Johnson will not have to pay to move their product.

VA mortgage loans are very similar.  Wells Fargo of course has its own loan officers, branches and offices and is certainly willing to do their own loans through what is referred to as a “retail channel.”  A retail location is like the Wells Fargo bank on the corner or in the shopping plaza.  If you were to call Wells Fargo directly as a consumer you will work with their retail division and get great service and decent rates.  However, if you call Flagship or any other broker that has access to Wells Fargo’s wholesale rates, you will get a much lower rate.

I am not a veteran and do not have a VA loan of course.  My entire mortgage profession has been spent working on VA loans and assisting military families with their home loans.  The other day Wells Fargo contacted me directly because I have a loan with them on a rental property of mine and they asked me if I wanted to refinance.  I will keep this story short, but the rep at Wells when I showed him what wholesale rates I could get on my own, simply told me he could not compete and I should do it myself.  Here is an excerpt from that email:

I understand……what you saying is that wholesale is at a price of 104.00 ( i assume they want to get paid) so they can give you 3 points….and we are at 101.00…..

My manager has been with Wells for 15 years and he says there is no way we can be 3 points away from wholesale, but you know what your doing and if you can get it I would jump on it too..

So for those of you with VA loans at Wells Fargo what does this mean to you?  I am not trying to suggest that Wells Fargo is ripping you off or that you should not refinance straight through the retail loan officer, but I do want to make you aware of your options and suggest seeing what Wells Fargo can do for you and then contacting Flagship Financial or another broker and see what they can do for you.

There has never been a better time than now to streamline your VA loan and take advantage of seriously low VA interest rates.  Flagship Financial is dedicated to assisting you with any VA home loan questions you may have.

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On the Home Front: Easy Ways to Support Military Spouses

August 30th, 2010 by Craig Walton

We all agree that protecting our troops and their families on the home front is of paramount importance. But while alarm systems and locks protect their physical well-being, let’s not neglect protecting the hearts and spirits of the heroes at home, as well.

Here are some ideas anyone can use to support military families.

Get your church involved
Churches (or other community groups) are in a perfect position to minister to families of deployed service members. Here are just a few ways to provide reinforcements:

Send reverse care packages. Send care packages to the deployed members, and “reverse” care packages to the families on the home front. If possible, find out through email from the deployed spouse what he’d like his/her spouse and children at home to have for special holidays such as Mother’s/Father’s Day, Valentine’s Day, Military Spouse Appreciation Day (May 7), birthdays, Christmas, etc. These are all days when a spouse and parent’s absence is felt the most keenly. Then make sure the family gets these items on the special days. If the deployed member can’t be reached, deliver a gift card to Starbucks or a local spa, movie tickets or something else you know the family would enjoy.

Offer a Military Night Out. Once a month, offer a Military Night Out where the church provides dinner and child care for children of the military member. The parents can go have a date night together, or if the spouse is deployed, the spouse at home can get a break from the kids and do errands, get together with friends or just have some time to herself.

Organize a returning veterans fellowship. When the deployments end, those coming home from combat need to be in fellowship with others who understand the special adjustment issues they will be facing. Often the military member doesn’t want to share all the details of combat with the spouse to protect her from those images. Organize a simple gathering for veterans to benefit from being with others who understand exactly what they’re going through.

Honor the troops. Watch the calendar and honor the troops around Memorial Day, Independence Day, and Veteran’s Day with special breakfasts for them or at least a mention from the pulpit. Show military members and their families (veterans included) that they are special.

Take personal initiative
No time to get a group together for an organized military ministry? No problem. Choose from this arsenal of ideas to personally support the military spouse at home.

Create some coupons. Instead of simply telling a military spouse you’re willing to help, give him/her some specific ideas of what you can offer. Either give a list of your services or create a coupon booklet for free babysitting, a coffee date, financial counseling, running errands, an hour or two of housework, etc. It’s much easier for military spouses to cash in on your offer to help if she knows exactly what you can do for her.

Surprise her. Make an ordinary day special by dropping off a basket of favorite foods, a great book, or new magazine and/or a movie rental you know the military spouse or kids have been wanting to see.

Fix what’s broken. Find out what’s broken and fix it—or help tide the family over until a professional can make the repair. If her computer is down, let him/her use yours to email her spouse. If the car stopped running, offer to give (or arrange) rides.

Get your hands dirty. For every season, there are jobs to be done outside. Pitch in when you can to mow the lawn, pull weeds, clean out gutters, shovel snow, or wash windows.

Bring a meal. Providing a ready-to-eat (or ready-to-cook) dinner means one less thing an already stressed military spouse would have to think about. If you don’t have time for a full dinner, a homemade loaf of bread, muffins, or cookies would still be great.

Make a call. Every so often, make a quick phone call to see how the family is getting along. Keep it brief, and leave a message if there’s no answer. Let them know you are there to support them.

Be there. Visiting is a great mood lifter, but ask first before showing up unannounced.

Be consistent. Mark your calendars to send a small note or email or phone call on a regular basis—not just right after the spouse deploys. And don’t expect a response each time. Support that spouse regardless of if she thanks you for every thoughtful gesture of yours.

Pray. Pray for the one serving our country overseas, but also pray for those serving at home—the spouse and children. Pray for the entire family even after the spouse returns home, too! That re-entry adjustment period is often just as stressful as deployment.

Supporting the spouse on the home front allows him/her to support the deployed spouse and children in a way that only she can. And knowing that his family is supported back home will allow the deployed spouse to better focus on his mission. When you minister to the military spouses and children, you are supporting the troops as well.

***

Jocelyn Green, a former military wife, is the award-winning author of Faith Deployed: Daily Encouragement for Military Wives [J1] (Moody Publishers 2008) and Battlefields & Blessings: Stories of Faith and Courage from the War in Iraq & Afghanistan [J2] (AMG Publishers 2009). Visit the Web site at www.faithdeployed.com for resources and encouragement. Join the Faith Deployed Facebook group at www.facebook.com/faithdeployed .


[J1]http://www.amazon.com/Faith-Deployed-Daily-Encouragement-Military/dp/0802452507/ref=sr_1_1?ie=UTF8&s=books&qid=1282543670&sr=8-1

[J2]http://www.amazon.com/Battlefields-Blessings-Afghanistan-Stories-Courage/dp/0899570410/ref=sr_1_2?s=books&ie=UTF8&qid=1282543704&sr=1-2

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Soldiers & Post Traumatic Stress Disorder (PTSD) Infographic

August 26th, 2010 by admin

Post Traumatic Stress Disorder (PTSD) is a serious disorder that many soldiers returning from Iraq and Afghanistan are dealing with.  PTSD is an anxiety disorder that can occur after you have been through a traumatic event.  After the event, you may feel scared, confused, or angry.  All people with PTSD have lived through a traumatic event that caused them to fear for their lives, see horrible things, or feel helpless.  Strong emotions caused by the event create changes in the brain that may result in PTSD.

The topic of PTSD has been receiving a lot of attention lately so we wanted to see who is feeling the affects of it within the U.S. Military and provide more definition.  Hopefully this graphic below helps.  Please share it and pass it along.

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Post Traumatic Stress Disorder Among U.S. Soldiers

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Veteran should refinance VA loans now

August 20th, 2010 by Eric Kandell

Why Refinance Now?

In general  VA Loan rates are  lower than that of a conventional loan. Many people, seeing the economy the way that it is start to shop and wonder if the rates are going to keep dropping. The question has been asked various times if now is the best time to refinance. After having been in the business for many years and having dealt with only VA Loans, I would say yes, now is the time to refinance a VA loan.

The VA Streamline refinance is a very simple process and only takes us about 3-4 weeks to close. If you are wondering what a refinance at this time can do for you here is a list of four great things a VA Refinance can do for you:

Lower your monthly payment
The rates on a VA Loan are as low as ever depending on loan size and state we can get our Veterans or Active Military rates as low as 3%. Simply exchanging a higher interest rate for a lower one could reduce your monthly mortgage payment by hundreds of dollars. If you decide not to refinance the savings that you could have will just go into the banks pocket instead of your own.
Stabilize your mortgage rate
If you already have an adjustable rate mortgage and your initial interest rate period is about to end, you can refinance to a fixed-rate that may save you money over time. The interest rate on an adjustable-rate mortgage can keep climbing. A fixed-rate loan takes the guesswork out of budgeting, giving more peace of mind that your payment will never go up.
More cash in your pocket
You can get funds by doing a cash-out refinancing, where you can draw on your home’s equity by borrowing more than you currently owe. It can be cheaper than taking a home equity loan or second mortgage, which generally carry higher interest rates. With the VA Streamline refinance you are also able to defer 2 monthly payments after close, as well as receive the amount in your escrow account back.
Eliminate Debt
If you have enough equity in your home to cover your other debts, refinancing to get the cash may work to your advantage. With the money that you save from the 2 deferred payments you will also be able to payoff credit cards or other debt that has higher interest rates. You will be able to become debt free and save hundreds of dollars that you would of paid in interest otherwise.

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Veteran and Military Credit Blog

August 12th, 2010 by Eric Kandell

Checking for errors:

Creditors aren’t perfect, either

Other people make mistakes too. Even banks and credit – card payment processors. Considering that about 4.5 billion pieces of data are added to credit reports every month, it shouldn’t be a big surprise that incorrect information may show up on your credit report. And won’t even get into the unrelated problem of errors caused as a result of identity theft. There have been a number of conflicting studies on what percentage of reports contain errors and of those, how many were serious enough to affect either the terms under which credit was granted or if it was granted at all. So, you may have errors on your report or not. And they may be serious or not. But unless you are feeling really lucky, I strongly suggest you find out what’s in your report.

Still, credit –reporting agencies have a vested interest in the accuracy of the information they report. Remember: They sell it, and their reputations are on the line if their information is consistently inaccurate, If credit – reporting agencies consistently provide error – riddled data, those who grant credit won’t be as eager to pay money to get or use a bureau’s credit reports.

Getting a copy of your credit report gives you a chance to check for these errors and – better yet – get them corrected! You can have inaccurate information removed by one of two methods: contacting the credit bureau or contacting the creditor.

Contacting the credit bureau

If you notice incorrect information on your credit report, contact the credit bureau that reported the inaccurate information. VA Credit Solutions can assist you with Free Credit Repair too.  Each of the three major bureaus allows you to dispute information in your credit report on its Website, or you can call the bureau’s toll free number. If you make your dispute online, you’ll need to have a copy of your credit report available; there is information on the report that will allow the bureau to confirm your identity without a signature. If you opt to call the toll free number, you’re unlikely to get a live person on the other end – this stuff is heavily automated – but you’ll be told what information and documentation you need in order to submit a written request. After you properly notify the credit bureau, you can count on action.

Credit – reporting agencies are required by the Fair Credit Reporting Act to investigate any disputed listings. The credit bureau must verify the item in question with the creditor at no cost to you, the consumer. The law requires that the creditor respond and verify the entry within 30 days, or the information must be removed from your credit report, and the credit reporting agency has to notify you of the outcome. If information in the report has been changed or deleted, you also get a free copy of the revised report.

Contacting the creditor

Another way to remove inaccurate information from your credit report is out – lined under the Fair and Accurate Credit Transactions Act, passed in 2003 and rolled out in pieces through 2005. Under these new FACTA provisions, you can deal directly with the creditor who reported the negative information in the first place. Contact information is contained on your last billing statement from the creditor.

I strongly suggest you do everything in writing, return –receipt requested. After you dispute the information, the reporting creditor must look into the matter and cannot continue to report the negative information while it’s investigating your dispute.

For new delinquencies, FACTA now requires that you be notified if the negative information is reported to a credit bureau. That said, you may have to look closely to even see this new notice. Anyone who extends credit to you must send you a one-time notice either before or no later than 30 days after negative information – including late payments, missed payments, partial payments, or any other form of default- is furnished to a credit bureau. The notice may look something like this:

· Before negative information is reported: “We may report information about your account to credit bureaus. Late payments, missed payments, or other defaults on your account may be reflected in your credit report.”

· After negative information is reported: “We have told a credit bureau about a late payment, missed payment, or other default on your account. This information may be reflected in your credit report.”

The notice is not a substitute for your own close monitoring of your credit reports, bank accounts, and credit-card statements.

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Military VA Loan Holders Have Never Had an Opportunity in History Like They do Now

August 9th, 2010 by Eric Kandell

I began doing VA streamline loans for military home owner in the fall of 1997.  At this time, I was attending college and simply wanted a part-time job that I can feel good about and it would also allow me to make a reasonable income.  A friend of mine, was working at a mortgage company that focused their efforts on veterans and a special type of loan for these military homeowners.  My first day of work I was given a sheet of paper full of phone numbers and was asked to start dialing as many veteran homeowners as possible.  Basically, at this time VA interest rates have recently come off of some of their highest levels in years and the mortgage industry was very under regulated and here I was at a company that was offering streamline refinances to almost anybody with a VA loan and a heart beat.  See a great video here on this subject!

Fast forward now almost 15 years later and I am still doing home loans for nation’s finest; military homeowners.  Today however, our mortgage industry is being regulated to the extreme and banks are making it more and more difficult for those of you with VA loans to take advantage of these historic interest rates.  I am not passing all the blame onto banks.  As someone who has worked in the mortgage industry for the past 15 years I realize the industry needed overhaul, regulation, and change.  However, as is typical we have now seen a knee-jerk reaction and over correction making it very difficult for some of the most deserving borrowers to take advantage of these historically low interest rates.

Since my beginning in 1997 I have participated in 4 or 5 what we like to call “refi booms.”  A refi boom is a time where almost anyone with a loan is looking to refinance and almost everyone can benefit from that refinance.  The situation we currently have in front of us here in the United States is one that I would have bet my entire career against.  For years there have been home owners not taking advantage of low interest rates during our refi booms and their rationale or reasoning at that time was that they knew interest rates would go lower.  I thought they were all crazy and to be quite honest some even ignorant.

I had conversation after conversation with military families that told me they were not interested in saving $200 a month for one reason or the other.  As a loan officer nothing frustrated me more than hearing someone that did not think it was worth their time, some costs and some energy to save $200 or more a month, not to mention hundreds of thousands over the long haul.

Some of the most common reasons I would hear as to why a VA loan holder would not want to streamline refinance are:

  • The closing costs hurt my equity
  • I’m not saving enough
  • I think rates will go lower
  • I don’t want to start over on a new 30 year loan
  • and the list would go on an one

I am here today to tell you that if you are a veteran or military home owner and you have an interest rate at 4.75% fixed or higher or any type of adjustable rate or hybrid arm, THAT YOU NEED TO REFINANCE NOW!

You may be saying, “Eric you are admitting in this post that you were wrong before and that those that waited to refinance were right.”  THIS IS NOT WHAT I AM SAYING. Those families that refinanced along the way have saved way more money by taking advantage all the way along the drop.  It is the families that waited that may at this time be just S.O.L.

Those families that waited do not have access to the same easy VA streamline loans that they could have had years ago.  Just two years ago your home’s value (appraisal) was not needed, you did not have to have a FICO or credit score looked at, you did not have to be employed, and this list goes on and on.  So for the many families that waited, congratulations YOU WERE RIGHT, rates have gone lower, but for those same families that can NOT TAKE ADVANTAGE now I am sorry.

As a VA mortgage insider I am here to tell you at the rate that VA loans are changing, it is a matter of time and very little time until there are no longer VA streamline loans available.  I think this is a tragedy to our military, but it is the world we live in today.

Who cares if rates may be going even lower?  All of the reasons NOT TO DO A VA Streamline in the past are now gone.  Let’s revisit them:

  • The closing costs hurt my equity
  • I’m not saving enough
  • I think rates will go lower
  • I don’t want to start over on a new 30 year loan
  • The closing costs hurt my equity.

    NO CLOSING COST VA LOANS are the majority of the loans we are doing now.  Seriously NO COST LOANS.  (see video here).  Do you really have any equity left anyway?

    I’m not saving enough.

    We are in what some tend to compare to the Great Depression #2 and if a couple hundred bucks a month is not worth it to you now, then it will never be.  I also want to remind you that when you do a VA streamline loan you get to postpone two mortgage payments and get a cash refund of your current escrow balance, thus putting immediate money in your pockets.

    I think rates will go lower

    You are just plane gambling and should mortgage your whole house and go to Vegas if you think this.  Suppose they do go lower, have you really lost by taking current rates that are the lowest they have been on record?

    I don’t want to start over on a new 30 year loan

    We have been offering 25 and 20 year loans at a pace never before seen.  Because rates have gone so low on VA loans, we see people taking a 25 or 20 year loan and still saving money each month!

    Dear VA home owners, please for the love of whatever you cherish, contact us now and at least look into the VA streamline loan.  I seriously have never been a part of an opportunity like we see now and am very weary that it will ever come around again!

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    History of the VA Loan

    August 3rd, 2010 by Eric Kandell

    A VA loan is a mortgage loan that is guaranteed by the US Departments of Veterans Affairs. The VA loan program assists Veterans who have served in the armed services become homeowners. The basic intention of the VA direct home loan program is to supply home financing to eligible veterans in areas where private financing is not generally available and to help veterans purchase properties with no down payment.

    The Current VA loan mortgage is a byproduct of the Servicemen’s Readjustment Act, more commonly called the GI Bill of Rights, which was passed by Congress in 1944. Harry W. Colmery, a World War I Veteran, wrote the first draft of the G.I. Bill. The G.I. Bill provided college or vocational education for returning World War II veterans, one year compensation for out of work veterans and also provided different loan types to Veterans to buy homes or start business. The G.I. bill provided low interest, zero down payment home loans for serviceman. The G.I. bill was created to prevent a repetition of the Bonus March of 1932, in which World War I Veterans marched on Washington DC demanding payments of their World War I bonuses. The Bonus March was dispersed by the army and the Veterans were not paid.

    The G.I. Bill is considered one o the most significant pieces of legislation ever passed by the U.S. Congress. The education benefits opened College education to the masses, in 1947, veterans made up almost half of the nation’s college students. It allowed millions of families to purchase their first homes and moved many families out of urban apartments and into suburban homes and resulted in the suburbanization of the American in the 1950’s and the postwar baby boom. Prior to the war suburbs tended to be the homes of the wealthy and upper class. The G.I. bill effectively created the American middle class that we know today.

    The Success of the 1944 G.I. bill prompted the government to offer similar measures to later generation of Veterans. The Veterans Adjustment Act of 1952 offered veterans of the Korean Conflict that served for more than 90 days, similar benefits that were offered through the G.I. Bill. These bills eventually lead to the Veterans Readjustment Benefits Act of 1966. Whereas the G.I. Bill of 1944 and 1952 compensated veterans of wartime service, the new bill extended benefits to Veterans who served in war and peace.

    Further acts were passed in Congress in following years. The Veterans Housing Act of 1970 removed all termination dates for applying for VA housing loan and also provided VA loans for mobile homes. The Veterans Housing Benefits Improvement Act of 1978 expanded and increased previous benefits given to Veterans. In 1992, the VA loan guarantee program was enlarged to include Reservists and National Guard personnel who served honorably for at least six years. In association with the VA’s program, the Servicemembers’ Civil Relief Act protects service members from financial woes on their home loan that may occur as a result of active duty commitments, freezing their interest rates at 6%. These acts have allowed Veterans through the years to buy homes when the might not have been able to on their own.

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    World Military Spending Compared (infographic)

    July 27th, 2010 by Eric Kandell

    The global economic crisis has had little impact on world military spending in 2009.  Nine of the top 10 spenders increased military spending in 2009.

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    Infographic comparing budgets and spending for military across the world.

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    Related: VA Loans for Military Vets.

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    True NO Cost VA Streamline Loans are Easier Than Ever

    July 22nd, 2010 by Eric Kandell

    image

    It is absolutely insane how low VA interest rates have gotten.  I have been doing VA streamline loans for the past 15 years and though YES it is tougher to do a VA streamline loan today than it was yesterday, VA interest rates are so low that I, an industry veteran would have bet the farm that they would never have gotten this low!  For years, in order to take advantage of the absolute LOWEST Rates possible, you would have to pay points and closing costs.  In essence this is not a bad thing, and we have posts that explain why paying closing costs actually makes sense.  However, due to some recent changes in the law and what VA lenders want, many VA loan officers cannot charge some of the fees that they used to be able to charge.

    If you have not refinanced before due to closing costs I promise you that you should contact a VA loan officer immediately or apply online at LowVARates immediately to take advantage of this unique situation you have.  Because VA interest rates can change daily I am always hesitant to quote rates but would like to give you a range of what VA loan officers that I know are quoting today:

    4.25% 30 yr fixed with little to no points

    4.5% with no Lender fees at all

    4.75 true NO COST loans.

    The VA hybrid rates are around 3.25%

    Please do yourself a favor and take advantage of the VA streamline loan which today is truly your diamond in the rough.  Our economy sucks, it really does and I know it will get better, but until then all military home owners with a VA loan should refinance now.

    If your current rate is at 4.75% or higher there is no reason to not take advantage of the no cost or no point VA refinance loan.

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