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Private Military Companies Explored (Infographic)

Wednesday, February 8th, 2012

Private military companies (PMC) often provide military and security services to governments seeking additional support for their military or police forces. While many people immediately think of mercenaries fighting the battle on the front lines, that doesn’t really cover it. PMC involve both contractors and mercenaries. While mercenaries take part in the armed conflict, contractors provide logistics support, private security, and a variety of other services such as cooks for cooking, and carpenters for building. The infographic below provides a breakdown of the kinds of services offered by PMC and a whole bunch of other details we hope you find interesting. Please share this with your friends if you like! Thanks.

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Private Military Companies Explored
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Which Loan is Safer? VA hybrid loan or 30 year fixed

Wednesday, March 2nd, 2011

If you have not yet realized, we at Low VA Rates are experts in the VA hybrid loan.  We pioneered this loan type for the military years before the rest of the industry started to catch on.  Back in 2008, we issued this press release notifying everyone of the benefits of the VA hybrid arm loan.

We are now leading the way in educating Veterans and Military not just on the simple basics about the VA hybrid arm mortgage, but more so on the integral moving parts of the VA hybrid loan.  There are so many misconceptions that are keeping our men and women of the military both active and Veterans from using this amazing loan tool to accomplish so many great things.

This video will attack one of the most popular fears or misconceptions about the VA hybrid loan and that is that most people think that a 30 year fixed rate mortgage is a safer loan than a VA hybrid mortgage.  This is normally not true and as you will see in the video above, we are doing all we can to educate people on how the VA hybrid loan is actually much safer than the 30 year fixed rate loan.

Some of the common beliefs are:

30 yr fixed rates are better for paying off your mortgage in the long run

30 yr fixed rates are better for those wanting to live in the home forever

30 yr fixed rates make budgeting for retirement easier.

The above thoughts, though common are very untrue.  This video will explain why:

VA hybrid loans are better for paying off your house fast

VA hybrid loans are safer for retirement and budgeting

VA hybrid loans are better for people who want to live in their home forever.

We hope you find this video helpful!

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VA Loans are stronger than ever

Thursday, February 17th, 2011

FHA and HUD have recently released new mortgagee letters to their lenders outlining more changes to FHA loans.  In short these changes once again prove why VA loans are so much better than FHA loans and why all Military home owners or buyers should use their VA home loan benefits and the VA loan when buying or refinancing a home.

It is getting more and more difficult and expensive for civilians to buy homes.  FHA will soon increase the monthly mortgage insurance premiums you must pay every month if you have a FHA loan and there is also talk that the down payment will soon be raised to 5% from the current 3.5% requirement.  FHA now wants higher FICO scores than in years past and frankly because FHA is going bankrupt, they are trying with all their might to make irrational changes in hopes that things get better for them.  In my opinion FHA is on the road to failure.

Now lets talk about VA loans!  VA loans require NO MONEY DOWN, VA loans have absolutely NO monthly mortgage insurance payments and are much cheaper than FHA loans.  There is a recent study that shows that VA loans are performing at a much better rate than FHA loans.  This basically means less people are defaulting and foreclosing on VA loans than on FHA loans.  Why is this?  From my experience Veterans are harder working, more reliable and more willing to make the extra sacrifices needed during tough times to ensure their payments are made.  A Veteran will do all they can to “not walk away.”

I will tell you that nothing irritates me more than hearing someone who has served in the military tell me that their realtor or agent told them to go FHA or conventional.  9 times out of 10 the VA loan is by far the best option and will have saved the home owner way more money over the life of the loan and of course up front than a FHA loan.  Normally it is nothing more than ignorance on the part of the real estate agent.  If you are an agent and are reading this and have ever told an eligible Veteran not to use a VA loan, please chime in and let me know why!

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Benefits of a VA streamline refinance

Tuesday, November 9th, 2010

The VA Streamline refinance home loan is without a doubt the best mortgage refinance loan on the market. No other refinance loan program is as simple and easy to qualify for and there are so many unique benefits that come along with it. Although, In order to do a VA Streamline refinance, your current loan must be a VA home loan.

One of the biggest benefits of the VA Streamline refinance is that you do not have to go through credit qualification.  There is absolutely no need for lenders to pull your credit history and look at your scores. However, your existing mortgage must be current and you cannot have had any more than one thirty- day late mortgage payment within the last 12 months. In order to do a VA Streamline refinance, your current loan must be a VA home loan.

Another benefit is that the regular underwriting process does not apply. Your lender is not going to check to see how much money you make. So you do not need to send in bank statements, W2’s, paychecks, etc. Since you have been making your mortgage payments, they know that you have the means to keep it up. Along with this, lenders are not going to be calling your employer to make sure that you are still working with them before considering giving you a loan. With a VA Streamline refinance a income verification is no issue to you at all, since they will not be doing that.

VA Streamline refinances in most cases can allow you to arrange your refinance to be completed with absolutely no out of pocket expenses. All of the closing costs and pre-paid can be rolled into the new loan amount and on top of that there is no appraisal required. As you can see there are so many unique benefits of a VA Streamline refinance as listed above, if it sounds like this is for you, take advantage of this amazing opportunity.

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Veterans and Military home owners need to refinance now and not wait

Friday, November 5th, 2010

The Federal Reserve Wednesday announced its latest effort to spur economic growth: a plan to purchase up to $600 billion of government bonds through June 2011.  The Fed, as it is called, is trying to lower interest rates, in the hopes that doing so will loosen the supply of credit and spur more economic activity. The central bank’s main tool for reducing rates is to slash the short-term overnight lending rate that banks charge to one another, the so-called Federal Funds rate. Bring short-term rates down, and long-term rates tend to follow. In normal times, that’s as far as the Fed usually goes. In the past three years, the Fed has reduced the Fed Funds target rate 10 times, from 5.25 percent to between zero and .25 percent. It’s been at that extremely low level since the fall of 2008. This is one of the reasons we have seen such amazing rates during the last couple years and why they have remained low.

BUT- that does not mean that VA interest rates will go lower.  In fact, if anything they have reached levels that they can’t break through going lower, with inflation and such.

Investors love to repeat the mantra: Don’t fight the Fed.   Also with as much firepower as the central bank possesses, the Fed isn’t the only dominant economic power in the world. And interest rates can be impacted by all sorts of factors. If China’s central bank cuts back sharply on its purchases of U.S. government bonds, which they could do at anytime, interest rates will rise. Investors’ attitudes about the pace of growth, or inflation, play an important role in determining market interest rates also.  And where we have seen rates low for such a long time, more of the same seems unlikely.

Moreover, what does the Fed believe it will gain by adding more and more government bonds to it balance sheet?   That is the question isn’t it?  There are a couple of risks. First, low interest rates and the expansion of the Fed’s balance sheet tend to weaken the dollar. But the second — and larger — risk is that it won’t work. Interest rates are already exceedingly low, and it’s unclear how “lowering” them a bit more will induce companies and individuals to change their behavior significantly.  In the current situation, Fed Chairman Bernanke is cranking up the volume while the political system is sitting on its hands. Imagine a two-engine jet trying to fly with only one engine working.  We need to really see both entities policies working in tandem to reap the maximum effect.

So where does this all leave us?  What it means is don’t expect rates to be any better tomorrow then they are today.  Now is the time to take advantage of the lowest rates in nearly 65 years.  It is time to realize that if foreign powers decide to exercise their options and Wall Street/investors attitudes are still in the doldrums, and then later could very well be worse than now.  As 2010 comes to an end there are also likely changes to loan programs for 2011 that could also jeopardize refinances next year that you could “get away with” this year.

Eric Jorgensen is an experienced VA loan officer and can help you with all of your VA mortgage needs.

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How VA loans can put money in your pocket

Wednesday, November 3rd, 2010

Have you recently looked into your wallet and noticed there is less money in there? No not because your teenagers are cleaning you out but because the economy and times in general are just tougher. Well because of this situation and the current market for homes and interest rates, it may be the time you have waited for to refinance, using the VA’s VA Streamline IRRRL loan. IRRRL stands for Interest Rate Reduction Refinance Loan. This is not a new program; the VA has offered it for years and years. Because interest rates are so low right now, many people are finally getting around to it and in some cases taking advantage of the program again from just a couple years ago.

Let’s look at the program.

The VA allows for current VA mortgage holders in good standing, those who have been current on their payments for 12 months, and those who have had the loan for less than 12 months can still qualify, just have to meet qualifications that include that the refinance is beneficial to the borrower.

Commonly having a second mortgage or home equity line of credit (HELOC) make the process more difficult but not necessarily impossible. You see because these liens are subordinate to the current first mortgage- the VA loan- the lien holder on the 2nd or HELOC has to agree to remain in a second lien position when the VA loan is refinanced. This is called subordination. Most companies agree to subordinate to the new VA first mortgage.

Ok so let’s continue to look at how the refinance can put cash in your pocket. As part of the refinance process the current VA loan servicer, the company that the payments are made to now, will be paid off. When that loan is paid off, the interest that is due on a payoff is included. So commonly, there are two months in which the veteran/homeowner will not have to make payments, they are simply deferred. That frees up two months worth of current house payments, in some cases like with larger loans that could free up $5000 or more.

Next, as part of that payoff to the current servicer, they are no longer able or required to pay out escrows, tax and insurance payments, on the loan. So they will return whatever is left in the escrow account when the higher refinanced loan is paid off. The new loan includes those prepaid taxes and insurance built into the loan so when the new payment comes due, there are already taxes and insurance built into the account for when they are due later that year.

So let me give you an example with actual numbers. I have a client where the current monthly payment on their 6.25% loan is $1956. They will not have to make that payment for the next two months, since the interest is included in the payoff, so $1956 x 2= $3912. Then the escrows refund is $4623. So $3912 + $4623=$8535 cash in their pocket from the VA streamline rate reduction refinance.

You can see how easy it is to put money in your pocket from taking advantage of the VA refinance program. Oh yeah don’t forget this example above, not only are they putting $8535 in their pocket but they are also lowering their monthly payment by $276 a month

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Time to buy a home with a VA loan

Monday, October 25th, 2010

With mortgage rates near 65 year lows, it could be the best time in the past decade or so to buy a home.  There is plenty of “stock” available in nearly every market and in some markets, like FL, AZ, CA and a few others, prices have come down from near top of the market “values” compared to just a few years ago.

The “bad” news, well it has become somewhat more difficult to qualify for a home loan. The good news however, is that there are less hoops then you might think on VA Loans still.  So for those that do qualify for a VA loan and there are MANY that do, it is still the best option for a purchase or a refinance.

Let’s talk about a few of the hoops, and see how easy they really are to get through.

1.  Income qualifying-  The VA has simplified the debt ratios and allows some of the highest DTI, Debt to Income, ratios in the industry.  I recently had an approval on a 54% DTI, that is 13% higher than current conventional guidelines.

2.  Appraisals- it has to be done by a VA certified appraiser.  This is a great benefit to the buyer.  The VA has more strict guidelines that protect the veteran/active duty buyer from getting into a home that isn’t safe, hasn’t been maintained well or doesn’t adhere to current “livable” standards.

3.  Seller Concessions- the VA offers up to 6% seller paid concessions on purchase transactions.  So if you were buying a $280,000 home, the seller could offer $16,800 in concessions to make the deal work.  That is obviously a HUGE amount of concessions and I haven’t seen the need for that much but hey it’s available and an option if it really came to that.   In addition, almost all purchases currently have some sort of seller concessions to help pay for closing costs.  It is just the way the market has moved with all the volatility in the real estate market.  Sellers are willing to give concessions away so they can sell the house at all, in this kind of market.

4.  100% financing- best of all no money down financing is still available.  Boy that is when I wish I had access to the VA’s loan program.  We had to bring an arm and a leg to close so as to avoid paying mortgage insurance- which also the VA doesn’t have on any of there loans.  On VA loans they charge a funding fee, which goes to guarantee the loan, unless you collect disability from the VA and then they waive the funding fee altogether.

5.  VA Rates- among the lowest in the country, the VA “specialized” for government loans only offer rates as low as 3.25% today.  The best I could get on my own loan was 3.875%.

I hope I have helped to inform and bring up to date what the current market is to allow VA eligible home buyers to buy a house right now.

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History of the VA Loan

Tuesday, August 3rd, 2010

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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Best Places in Arizona for Veterans to Live

Sunday, June 20th, 2010

Arizona is a very diverse state. It can range from warm weather in the desert to beautiful mountains and snow in the winter in some areas. Arizona is well known for a state to retire due the vast majority of the state being desert and warm. There are many great spots to live in depending on your preference. However, most popular cities for veterans to live in are Gilbert, Mesa, and Scottsdale.

Gilbert, AZ is one of the more popular places to live in. It has a population of only about 148,000 which deceives the number due to the fact of Gilbert being expanded over the last decade. There are many homes recently built in the last five to ten years. It is a warm climate that offers great amenities in the surround area and cities.

Because Gilbert has grown in the last ten years, veterans and homeowners that purchase there, usually get a home that is fairly new. This leaves for a great appraisal and smooth loan process with the VA Loan. There is usually nothing to be fixed or upgraded.

Due to the poor economy, house prices have come down quite a bit. This also allows a Veteran to get into a home cheaper than usual for a nice house. Many houses are built around big man mad lakes to enjoy in your back yard for a way to cool down during the warm months.

Another great destination for Veterans in Arizona has been Scottsdale. What attracts many people to Scottsdale is a variety of beautiful desert scenery. It has a population of 235,000 and is still growing. You can also find new homes fairly priced.

Another popular spot for Veterans is also is Mesa. This is the bigger of the cities that has grown vastly over the past decade. Many homes have been built over the last years and are fairly priced. Mesa is suburban and you will find all the amenities you need to live in today’s world. The population is 452,000.

There are many spots in Arizona that Veterans can enjoy to live. The weather is warm. The state offers prime golf courses, vast desert scenery, skiing in the winter months in some areas of the state, and of course the historic Grand Canyon. If you are looking for pine trees and mountains you can head north to Pine Top, Arizona. There you will find many cabins, beautiful forest and mountains. The climate stays a little cooler due to elevation compared to the rest of the state.

Arizona attracts many retired veterans. They find they get quite a bit of house for the price now days. Also many areas are fairly brand new.

So if you are looking to live in Arizona, these are some very nice areas to search for a house in. www.lowvarates.com offers all Veteran financing made simple. Please let us know how we can accommodate your next purchase in Arizona.

If you choose to move to Arizona then using an Arizona VA loan is your best option.

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JP Morgan Chase Bank Does NOT Help Veterans With VA Loans Like They Could

Tuesday, May 4th, 2010

The purpose of this article is not to trash on Chase or JP Morgan but I have got to tell you that when I see a Reuters headline “JP Morgan underwrites securities tied to VA loans” it makes me feel like the media is misleading our veteran home buyers yet again.

In the wake of the mortgage meltdown JP Morgan Chase exited the TPO or brokered loans portal and decided almost over night that they would not even honor locked in TPO loans for veterans.  I personally had to disappoint numerous military families with this bad news and quickly become the bad guy!

I think all vets, military families, etc should keep in mind that JP Morgan Chase did NOT have veterans and VA loans in their interest a couple of years ago when it was needed the most!

Sincerely,

A frustrated VA loan officer

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