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VA Streamlines Do Not Require An Appraisal Of Home Value

Friday, April 22nd, 2011

Effective April 18, 2011!!!!

With interest rates still very low, many home owners are refinancing their mortgages to get lower finance rates. They face a tons of paperwork and documentation. The process can last a while, need a new appraisal and generally be a pain in the neck. Of special concern is the appraisal as so many home owner’s properties have seen values reduced to a number lower than their mortgage. A 1% reduction can save you $100 to $600 per month with no out-of-pocket expenses.

Fortunately, under the VA Streamline Program, Veteran’s Administration mortgage borrowers can refinance their property without an appraisal. Countless number of veterans and active duty military members are fortunate to take part in the United States Department of Veteran’s Affairs Streamlines Mortgage Financing program. The program is sometimes called IRRRL, an acronym for Interest Rate Reduction Refinancing Loan.

The VA Streamlines is truly an express loan:

No appraisal needed
No income or employment verification required
No credit report required
There is no need for a termite inspection
Loans close quickly

However, though the Veteran’s Administration backs the loan and doesn’t require any of the above items, you must shop for lenders as some require appraisals and credit reports.

Your existing Veteran’s Administration loan must be paid on time for the past 12 months and current when you apply for refinancing. Additionally, you may only refinance an existing Veteran’s Administration loan with this program.

Veteran’s cannot refinance for a higher amount that the refinanced mortgage, in other words no cash back to the borrower. The exception to this is the borrower may add up to $6,000 for energy efficiency improvements and add any loan origination costs too. Be careful though, as this will raise your monthly payment than a straight refinancing. In addition, some lenders may want you to look at a 15 year term for the Streamline as it will save you tens of thousands of dollars in interest. But, the monthly payment will be much higher as you are repaying much more principle than if you write a thirty year repayment plan refinancing. Make sure you can afford the payments as your home is at stake.

The occupancy requirement for a Veteran’s Administration Streamline is different from your original Veteran’s Administration mortgage loan. For the original loan you had to certify that you would be occupying the home, for an IRRR loan you are only required to certify that at one time you lived at the property.

An additional feature of Veteran’ Affair Streamline refinancing is that you may up to skip two payments over the life of the loan – they are put at the back-end of your loan.

There is no better refinancing program available than the VA Streamlines program. With little paperwork, no out of cost expenses as you can roll closing costs into the loan and the potential to significantly cut your monthly mortgage payment this is loan that you should explore at once. It could save you a bundle of money.

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Posted in Home Values, VA Credit Score Info, VA Refinance, VA Streamline Refinance, underwriting, va interest rates | No Comments »

VA Loans for Military Veterans are taking too long to underwrite and get approved!

Thursday, September 16th, 2010

Most of the year 2010 has been easy sailing for most of the approved VA lenders at LowVARates.com.  The mortgage industry had purged out most of the bad apples (Lenders that were doing bad loans) and left standing are generally strong and stable banks and mortgage companies.

Last year in a press release dated 1-28-09 (Mortgage Industry Faces Huge Bottleneck), LowVARates tried to educate and explain to all military and veteran home owners and buyers that the amount of time needed to process, underwrite and approve VA loans would be substantially longer than normal.

Due to recent drops in VA mortgage rates that have hit historically low levels, the mortgage industry is now facing similar issues to those in early 2009.  One approved VA lender, Flagship Financial Group branch 403 has said the following recently, “In the last 2 weeks we have seen our big lenders like Wells Fargo, Freedom Mortgage and Met Life all drastically slow down in the amount of time it is taking them to get our VA loans approved.”  It is tough because the home owner normally does not normally want to hear excuses and just wants the loan to get done quickly!”  “In all honesty our hands are tied.” said Nate Burt, Loan Officer.

All Veterans and military home owners should understand that patience is needed at times like this.  We looked into the published VA underwriting turn times from some lenders and they have almost tripled from where they were just a month ago.  It is important that loan officers educate and communicate with their clients so as to make sure everyone’s expectations and set correctly.

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Posted in Loan Processing, Press, VA Loan News, press release, underwriting, va interest rates | No Comments »

Eligibility and benefits of VA loans

Tuesday, September 7th, 2010

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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Posted in VA Interests, VA Loan, VA Purchase, VA Refinance, VA Streamline Refinance, underwriting, va interest rates | 1 Comment »

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

Monday, August 9th, 2010

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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    Posted in Home Values, VA Loan, VA Refinance, VA Streamline Refinance, underwriting, va interest rates | No Comments »

    VA Streamlines and Bankruptcies

    Friday, July 16th, 2010

    Does a BK have any effect on a VA streamline refinance? This is a question that gets asked by Veterans almost every day. The simple answer is YES! The requirements or guidelines are much different than if you were trying to purchase a home. I might add that it also depends on if the Bankruptcy was a chapter 7 or  chapter 13.

    The difference between a BK 7 and 13 is this – Chapter 7 involves a complete liquidation of debts listed in the bankruptcy whereas the Chapter 13 involves debt restructuring by paying a trustee every month who in turns pays the debts listed on the bankruptcy.

    Here is what the VA says on a streamline refinance bankruptcy – “Although no underwriting is required, approval of new credit may be required by the trustee in a chapter 13 BK” This is always the case. If a Veteran is paying on a chapter 13 BK they must get special permission from the courts and trustee to refinance their VA loan. Things are different for a Chapter 7. Most lenders will do a streamline refinance just as long as the Chapter 7 bankruptcy is discharged.

    Remember though that the rules of late payments and minimum credit scores are still applicable. A Veteran cannot have any 30 day late payments on the mortgage within the last 12 months and must have a credit score of at least 620. If a Chapter 7 has just been discharged chances are the credit score is not going to be 620 and thus making them ineligible for the streamline refinance. Please understand that the credit score requirement IS NOT VA! This is a lender overlay.

    If this information has been helpful or you have additional questions please contact me at 1-888-657-2848 ext 222.

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    Posted in VA Credit Score Info, VA Loan, VA Streamline Refinance, underwriting | No Comments »

    VA Loan Videos Can Help Military and Veteran Home Owners Learn More About VA Loans

    Friday, May 28th, 2010

    LowVARates has put a lot of time and energy as of late to solidify their place in the online universe as a leader in online videos about VA loans.  Statistics show that online video sites like YouTube are the future of the online search arena and this is a main reason why Google has purchased YouTube.  Think about it.  If you needed information on how to get a VA loan with no closing costs, would you rather read pages and pages of content or watch a video?

    We have all sorts of VA Loan videos on our site to help prospective VA home buyers and existing VA loan holders alike.  In addition to the videos on our site we invite you to follow us on YouTube by clicking here.

    Here  is a list of some of our Top Videos and we feel they will be of great worth as you try to become more educated in the field of VA home mortgage loans.

    No Cost VA Loans

    Insider Secrets to the VA Streamline

    How to payoff debt with a VA Hybrid Streamline

    Understanding the VA Hybrid

    Why a VA Loan to Purchase a Home

    Using their VA home loan benefits to buy or refinance your home is something more and more eligible military families and veterans are doing.  It is the goal of LowVARates to make using these VA home loan benefits a reality for all of those that are eligible.

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    Posted in Loan Processing, VA Loan, underwriting | 1 Comment »

    Veterans VA Loan Benefits Update-Lending Standards Have Been Loosened on VA Loans

    Wednesday, March 24th, 2010

     

    Veterans who currently have a VA home loanneed to be advised that in February of 2009 some of the VA approved lenders at LowVARates have loosened or lowered their lending standards making it much easier to qualify for VA loans. 

    Veterans that have applied for loans in the past may for one reason or the other been told they could not qualify, however with these recent changes it may now be possible to take advantage of the historically low VA loan interest rates that are still available.

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    Posted in VA Loan, underwriting, va interest rates | No Comments »

    Tips from a VA mortgage expert.

    Wednesday, March 10th, 2010

    Statistics show that only 25% of all eligible VA home buyers actually utilize their hard-earned veteran loan benefits. I have dedicated my entire professional career to assisting veterans use and understand these VA benefits as they pertain to buying or refinancing a home mortgage. Life is full of difficulties and even things we may feel are unfair, and if I can play a role in making something less difficult for our Nation’s veterans then I will do all I can to assist!

    I have put a lot of thought and effort into this article and hope that all those that come across it feel that it has made the VA home loan process much easier to navigate from start to finish because truthfully, the VA home loan is a very simple and straight forward tool that can make home ownership a reality for hundreds of thousands of eligible veterans and active military.

    Step 1 is getting your preapproval letter.

    Getting a preapproval letter from your VA lender is one of the first steps that all veteran homeowners should take when trying to purchase a home. Before you go out and try to start buying a home you need to get a preapproval letter from your VA loan officer. The reason it is so important to have a preapproval letter in your possession is because sellers and real estate agents will not take you seriously until you have the preapproval letter. Once you have your preapproval letter you can start making offers on different home. Have you ever seen the movie Willy Wonka’s Chocolate factory? In this movie, those lucky holders of the golden ticket are granted access to Willy Wonka’s chocolate factory. I like to compare your preapproval letter to the golden ticket given to these lucky recipients in the movie. Without the golden ticket there is no entry into the chocolate factory; however once the golden ticket is presented the doors to this amazing chocolate factory are opened. Veterans, you will notice once you have received your preapproval letter you too will have many more doors opened to you. Realtors and sellers will be much more likely to take you seriously with your preapproval letter.

    What will you need to send to your mortgage representative to get your preapproval started?

    For a VA purchase loan you will need the following:

    · your last two year’s W-2 statements.

    · One month’s worth of pay stubs.

    · Form DD214 (not necessary but helpful)

    This information is needed on all applicants which is normally the veteran and his/her spouse.

    The reason we need your last two years W-2 statements is to verify how much money you make on average each year. The reason we will need eight months worth of pay stubs is to get an idea on average of how much money you are currently making with your current employer. In addition, to determining how much money you make your pay stubs also verify current employment. Your form DD 214 allows your VA lender to expedite ordering process of your certificate of eligibility. Approved direct lenders with the Department of Veterans Affairs have the ability to order your certificate of eligibility, which will determine if you can or cannot get a VA loan, over the internet directly from the VA. most veterans or active duty military who are applying for a home loan do not realize that the speed upon which they are getting approved is determined by how quickly they can get these necessary documents to their VA loan officer.

    What will the VA loan officer or VA lender do once they have your information as described above?

    Once your VA loan officer has the three items outlined above, he will plug all of your information such as employment, income, assets and liabilities if applicable into his loan origination software. Once your information is entered into the software a VA loan analysis must be run by an approved VA processor or loan officer. The VA loan analysis is a form which will indicate to the lender whether or not you can afford the home that you were trying to purchase. The VA loan analysis is a relatively simple calculation. The calculation is outlined below:

    (Monthly Income)- (proposed mortgage payment+insurance+taxes+utilities for that house+monthly credit card payments due) = RESIDUAL INCOME.

    What is residual income?

    Reschedule income is how much money you have left over to survive with after having paid all of your necessary obligations. The VA does not want someone to buy a home that is so expensive that home does not allow them to make all of the necessary payments on time. The VA has set up certain criteria for necessary residual income based on what part of the United States who have been, how larger family is, the age of your children and older variables. For example, the amount of residual income needed for a single person living in eastern Ohio will be lower than the residual income required for a family of six living in Northern California.

    The VA loan process from application to loan closing/funding.

    Once your VA loan officer has done your VA loan analysis and determine whether or not you can afford your home your loan will be submitted to an automated underwriting engine. The most common used automated underwriting engine is DU or desktop underwriter. Within moments of submitting your loan to the automated underwriting system, your loan officer will know whether or not you are eligible for the loan and at that point you will be denied or preapproved! As you are already aware if you are preapproved venue will be issued a preapproval letter so you may start making offers on different homes of your choice.

    Let’s now assume you have made offers on a bunch of different homes and decided to pursue the home of your choice. At this point in time you will need to be working with a real estate agent and you will need to execute a purchase contract or purchase agreement with the seller. After you have unexecuted purchase agreement you will return that purchase agreement to your loan officer and your loan process will now begin. Your loan process could take anywhere from about two weeks to five or six way depending on a couple different variables. Though it is very easy to blame your VA loan officer should things not go as quickly as you have intended, there is a lot that you can do to speed up the process. The following is a list of things involved in the loan process that may take time over the next 2 to 5 weeks:

    · Title insurance must be ordered and issued

    · An appraisal of the property must be done

    · Home owner’s insurance must be set up and put in place

    · Verbal and written verification of employment will be done on applicants

    · any adverse credit may need to be cleaned up or discussed

    · a VA underwriter needs to review all documents and issue final approval

    · closing needs to be scheduled

    though the list above may not appear complex or detailed, it is important to understand that in today’s tight economy with increased financial guidelines your loan approval and processing will take longer than it has in the past.

    So what can you do to make sure you are well prepared to buy a home with a VA loan?

    As I mentioned in the very first paragraph I have spent my entire professional career working with veterans and active-duty military in getting approved for their hard earned VA home loan benefits. If you take anything away from this article it is that you should be educated and make sure you’re working with a legitimate VA approved lender, bank or mortgage company. Here at LowVARates.com we have taken the guessing game out of your hands. If you submit your loan inquiry for preapproval on our website you can rest assured that we will put your information into the hands of an approved VA lender in your area. Our website is designed to educate all those looking to find out more about their hard earned VA home loan benefits.

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    Posted in Loan Processing, VA Loan, VA Purchase, underwriting | 5 Comments »

    The New 2010 GFE

    Sunday, December 27th, 2009

     

    Well the time is upon us, 2010 is nearly here and with it we will see a myriad of changes in mortgage lending and the industry in general.  Most importantly of all these changes are imposed by nearly exclusively by “big brother”.  So only time will tell if they will indeed help the average consumer be more informed and help them to understand what fees they are paying for and whom them went to.  Right from the outset, let me say I don’t think the new GFE is easier to read and understand.  Furthermore, it is at least twice as long as it is now, and it  seems to me and many to be twice as hard to decipher.

    Now with that said let me outline just a few of the “highlights” of what the proposed “improvements” are going to require, thanks Federal Government for sticking your nose in yet another industry that doesn’t need it.  They take effect on January 1, 2010.

    The GFE provides the potential mortgage applicant with cost details associated with closing the loan.   GFEs have not been standardized and commonly they are different looking state to state and loan type to loan type.   For example in Texas on a VA loan it may not look identical to lets say a Conventional loan in California.  Even after 7 years in the mortgage industry some are still a jumbled mess.  Also GFEs have been just that, estimates, not an actual amount because it is nearly impossible to know what the actual charges and payoffs etc are going to be on a loan before the loan officer has the opportunity to see the “numbers”. 

    That seems to be a prevailing factor, that the new GFEs be accurate, or more so.  Normally I would say initial GFE’s have been off by 10-15%.  The new rules will create a standardized, three-page GFE and require that the itemized list of estimated fees and charges be accurate. This is supposed to make it easier for borrowers to understand what charges are involved in their proposed loans.  It will allow for a very small variance in the charges.

    These new rules also apply and attempt to standardize the HUD, commonly called the settlement statement.  The list of actual fees and charges the borrower has to pay. The new settlement statement or HUD also will be three pages long and will include a chart on the last page attempting to show the borrower to compare the estimate charges in the GFE with the actual charges paid. 

    Well that is the short of it, certainly there is more involved but you get the idea and I hope it will be beneficial to everyone.

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    Posted in General Veteran Information, Loan Processing, VA Loan, underwriting | 1 Comment »

    VA loans: A Call to action

    Monday, November 23rd, 2009

    In the quickly changing landscape of mortgages VA loans stand alone. The VA backed mortgage is very advantageous for those who are able to take advantage of it. Worries about appraisals for refinances? Gone. Worries about help making payments in hard times? Gone. Stress over a down payment for your first home? Gone.

    From the outset the VA has worked to make VA loans both affordable and smart. Many veterans may not have the requisite 15-20% for a down payment on a conventional loan. The home that they are buying may not fall within the guidelines for an FHA purchase. The VA mortgage fills this gap for America’s Veterans and allows a nice home to be purchased with 100% financing. Along with this purchase the VA has services available when times are tough and the mortgage payment is in jeopardy of not getting made. Perhaps the easiest of the programs is the streamline refinance, where without an appraisal the veteran can refinance the loan in to a lower rate or shorter term with no cash out of pocket for the refinance transaction.

    By using a VA loan veterans can ensure an increased level of stability, increased cash flow from lower payments, and access to the lowest rates at any given time through the VA streamline program and VA loans are the same whether you are in need of a Texas VA Loan or a California VA Loan.

    To help with your purchase or refinance transaction, contact LowVARates.com to see how you can get on the road to home ownership, and lower monthly payments.

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    Posted in Loan Processing, VA Loan, VA Purchase, VA Refinance, VA Streamline Refinance, underwriting | No Comments »

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