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!
