It seems like I have been telling people for the past 2 years or so that VA interest rates were not going to be going any lower.  There were many time that in that window of time that I was right, however overall rates, VA rates especially, have continued to go lower and stay low.  It is times like right now when I wish for many reasons I had the benefit and blessing of a VA loan.

I bought my home in 2007 and even put down 20% on the purchase of the home.  Bad news for me is not only is all that equity gone, but I am also stuck at 6.5% rate even though interest rates are at 4.25% for 30 years or 3.25% on the hybrid loan.  I could be saving literally $800 a month or more if I could streamline refinance but that is not available on a conventional loan.

What is so amazing about the VA mortgage streamline refinance is that you can refinance even if your home has no value or equity.  You could have bought your home in 2007 at 250,000 and now it is worth 175,000 but you can still streamline your VA loan.  Perhaps the downturn in the US economy has affected your credit rating or FICO score?  If this is the case, as bad as that can be, it does NOT disqualify you from the VA streamline program.

Some of the benefits of these extremely low VA rates today are:

• lots of savings monthly from streamlining
• easier to decide to streamline
• the streamline allows you to skip some mortgage payments if done correctly
• many many more.

If you have a VA mortgage please apply here or give us a call at 866-569-8272 so we can show you what the VA streamline can do for you.

While 100% financing is limited on VA Jumbo Loans, qualified veterans can still secure financing with smaller down payments and more flexible lending guidelines without having to carry mortgage insurance.

Most conventional jumbo loans require that the borrower bring at least 20% of the full purchase price to close.  By contrast, VA Jumbo loans generally require no more than 25% of the amount of the sales price over $417,000, or $625,000 in Alaska and Hawaii.

Let’s say a home sells for $700,000. Now subtract the maximum “zero down” VA loan amount of $417,000 and you get $283,000.  Simply take 25 percent of $283,000 and we determine that the down payment would be $70,750.  To sum up, for just over 10% down, qualified veteran borrowers can purchase VA homes in high cost counties with no mortgage insurance and with subsidized rate pricing.  By comparison, a conventional jumbo loan borrower would have to bring $140,000 to close and likely receive a much higher rate that a qualified veteran.

Currently however, in order to facilitate homeownership for qualified veteran borrowers in areas within the continental United States where the median home price exceeds the traditional $417,000 maximum (despite the recent home valuation trends of recent years), the Department of Veterans Affairs has extended loan guarantee benefits that allow for up to 100% financing.  Many of these “High Cost” areas are located in California or in high density, east coast states, like Maryland and Virginia.  To give one an example of the sorts of benefit loans available, consider the following counties loan limits, based on the 2010 updated figures.

• Los Angeles VA loan limit: $593,750
• San Diego VA loan limit: $437,500
• Alameda VA loan limit:$962,500
• San Francisco VA loan limit:962,500
• Orange County VA loan limit:$593,750
• Riverside County VA loan limit:$417,500
• Fresno County VA loan limit:$417,500
• San Bernardino County VA loan limit:$417,500
• Sacramento County VA loan limit:$418,750
• Santa Clara County VA loan limit:$633,750

While these areas have been designated as “High Cost” counties for the years 2009-2010, there is little indication as to the depth, extend or duration of how long these areas will be able to enjoy these benefits.  In fact, even despite what the VA has indicated they will currently guarantee, the extent to which lenders will honor or offer financing across these conditions exist on a case by case basis.  The best bet for any borrower looking to take advantage of these temporary benefits is to contact a VA approved loan officer who can navigate through the various opportunities available to you.

1. The qualification process for that of a VA loan is much easier than for one of a conventional loan. A VA loan is a specific type of loan available to  US Armed Service veterans, who have served at least 90 days during wartime or 181 days during peace time and were not “dishonorably discharged”. They may be a retired veteran or the spouse of a veteran who died in the war or due to service related wounds and have no re-married. There are many ways to qualify for a VA loan.
2. Credit standards are much less strict. Typically this is where many borrowers have trouble with their loans. The VA looks for a clear 12 month credit history. Also, credit scores do not affect the rate of the loan.
3. There is no down payment required. This payment could be used for many other things, such as savings, paying off other debts, possibly a payment on the home later, or maybe a family trip! If the borrower chooses, they can make a down payment, but just keep in mind that it is not a requirement!
4. The amount that the VA allows the veteran to qualify for is generally quite a bit larger than that of a conventional loan, while also having lower interest rates. (Rates follow the market, but can become even lower if the veteran does opt to make the optional down payment.) A veteran can get a home for $0 money down and up to $1 million! Most states in the United States have a loan limit of $417,000, as chosen by lenders; however, in some states the max goes up to $625,500. Specific lenders in any state will allow higher loan amounts to fund, up to a maximum of $1,000,000.
5. The government limits the amount that can be charged in closing costs, origination fees, and appraisal fees. There are also no mortgage premiums required. Lenders are prohibited from requiring one. This is because of the guarantee put on the loan.

Veterans should take advantage of the VA loan if they can qualify for this option. Another perk to the veteran is if they have any kind of service disability. They can look into getting their funding fees waived as well. There are so many benefits to the VA streamline that it would be hard to not look into it. It is definitely one to take into consideration when buying a home.

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.

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.

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.

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!

It was then reported home sales hit a low in January, making a new record, which goes to show it will be hard to improve our fragile economy even with the government’s assistance. It fell 11.2% in January, which is the third consecutive month it has dropped, even though Economist was predicting an increase. Not only that, but unemployment is at 9.7%, foreclosure of homes are still at record highs, and it is extremely hard for businesses and individuals to get loans.         

It also was reported that as an effort to increase the economy’s situation, that a bill was passed to help produce more jobs. Not only that, but legislation is planning to help businesses by giving tax breaks to those who choose to help our economy by hiring more employees.

Ben Bernanke promised that the Fed would keep the interest rates as low as possible (near zero) for an “extended period.”  Some think that this “extended period” will last a few months. There will come a time when this will have to reverse once the economy is on more solid ground. The timing is tricky, as waiting too long can cause problems such as inflation, whereas raising rates too soon can disrupt the improvement that will be made.  Bernanke also urged the Congress to act on restoring the nation’s financial structure to avoid events that, in Dec 2007, put us in a recession.

Due to Chairman Ben Bernanke’s speech on February 24, 2010, the Tuesday drop of 101 points was raised on the Dow Jones on Wednesday (the day he gave his speech) by 100 points. This has been great news to the mortgage market! These lowered rates will continue to improve our economy. Our economy is recovering, but since it is still very weak and fragile, the lowered rates need to stay low.

Veterans please keep in mind that interest rates on VA home loans are normally .25%-.50% lower on VA loan than loans made to civilians.