Category Archive: FL VA home loan

Why VA Home Loan Use Continues to Increase

The home loan guarantee program overseen by the Office of Veterans Affairs (VA) was created in 1994 as part of the GI Bill. The reason for VA mortgages is that veterans don’t have an opportunity to build savings and establish credit while serving, which makes it difficult for them to get conventional mortgages. Since that time, the VA mortgage program has guaranteed over 22 million home loans, and that total is increasing steadily. In fact, VA purchase and refinance mortgages have increased from about 135,000 loans per year before the recession (2005/2006) to more than half a million loans each year in 2013 and 2014.1

Why are VA mortgages so popular?

Available only to eligible active-service military and veterans, VA mortgages have a number of advantages over other mortgage programs:

  1. Because the loans are guaranteed by the federal government, VA mortgage rates tend to be lower than those of conventional loans. That can save a borrower thousands over the life of the loan.
  2. No down payment is required as long as the purchase price of the home doesn’t exceed the appraised value. That makes it easier for qualified veterans to buy a home.
  3. No private mortgage is required on most VA loans, which saves borrowers even more money.
  4. Closing costs are strictly limited.
  5. Credit qualifications are more lenient than those for conventional loans.

How do you find a VA mortgage?

The VA doesn’t actually lend money to qualified veterans. Instead, it partially guarantees the VA mortgages and VA refinancings that are made by private mortgage lenders. Because of the guarantee, those private lenders can offer better terms for VA mortgages than for conventional loans. VA loans can be used to buy or build a primary residence (not a second or vacation home) or can be used to refinance existing mortgages. Moreover, you can use your VA mortgage entitlement over and over, as long as you pay off each loan. If you’re a veteran and are thinking about buying or building a home, call Embrace Home Loans at 407-733-6425. We can help you use your VA mortgage benefit to make your dream of home ownership a reality.

1 http://www.ruralhome.org/storage/documents/publications/rrreports/rrr-vethomeloanmortgage.pdf

Benefits for Veteran and Military Homebuyers

People who serve our country make many sacrifices. One benefit that they earn through their service is access to VA mortgages, which are home mortgages guaranteed by the Office of Veterans Affairs (VA). The VA loan program helps make buying homes more accessible to veterans and their families and offer many benefits including:

  • Flexible credit requirements
  • No down payment requirement
  • Lower interest rates
  • Limited closing costs
  • No mortgage insurance requirement

VA loans are available for people who have served 90 days of active duty during wartime, 181 days of active duty during peacetime, or at least six years in the National Guard or Reserves. One important point about VA mortgages is that military personnel who are currently deployed can still take advantage of the program now, rather than waiting until they are discharged.

VA mortgages do have some restrictions, but there are ways that active-duty personnel can address those restrictions. Since these loans are focused on getting VA borrowers into homes in which they’ll live full-time, you are required to live in the house you buy. But for active-duty military, a spouse and/or children may be able to fulfill the occupancy requirement.

Active-duty military members who receive a monthly basic allowance for housing (BAH) can use this money to qualify for a VA mortgage. In addition, active-duty personnel who have a VA loan and are facing financial stress can take advantage of the Servicemembers Civil Relief Act (SCRA) which protects active-duty military and their families from rising interest rates, foreclosure, eviction, income tax payments, and other unexpected challenges. Active-duty personnel can find out more about the SCRA from their local Armed Forces Legal Assistance office.

Military personnel who are currently deployed away from their families and aren’t available to manage the loan process can typically assign a specific power of attorney to a member of their family, allowing that person to sign loan documents and complete the loan process.

If you’re active-duty military who would like to find out more about getting a VA mortgage, contact Embrace Home Loans today at 407-733-6425. As a VA lender, we can help you with the process of getting a VA loan and put you and your family on the path to homeownership.

Four Myths About VA Mortgages

Home mortgages guaranteed through the Department of Veterans Affairs, better known as VA mortgages, are one of the best ways for qualified veterans and military families to finance the purchase of a home. In fact, more than 630,000 veterans took advantage of the VA loan program in 2015, and another 415,000 have already used their loan benefit as of May of this year.1 With a program this popular, it’s hard to understand why some eligible veterans might not apply for a VA mortgage. Let’s look at some VA loan myths that might keep veterans from using their loan benefits:

VA loans are more expensive: In fact, nothing could be further from the truth. VA mortgages were designed to help veterans purchase homes. The fact that VA loans are guaranteed helps keep their interest rates low. According to the September 2016 Ellie Mae Origination Insight Report2, the average 30-year rate for a VA loan was 3.52 percent in September, compared to 3.73 percent for FHA loans and 3.81 percent for conventional loans.

VA loans are slow: Again, this simply isn’t accurate. VA loans that closed in September took an average of 51 days, compare to 49 days for FHA loans and 48 days for conventional loans, according to Ellie Mae. In fact, Embrace Home Loans is known to close VA loans in under 30 days

VA loans are risky: This myth stems from the fact that VA loans don’t require a down payment. In fact, VA loans have the lowest foreclosure rate of any mortgage, according to the Mortgage Bankers Association.3 As of the first quarter of 2016, only 1.24 percent of VA loans were in foreclosure. In contrast, 2.41 percent of FHA loans and 1.63 percent of conventional loans were in foreclosure.

VA loans require perfect credit: Again, VA loans are intended to help veterans, so they have much more flexible credit guidelines. Ellie Mae says the average FICO score for a VA loan to purchase a home in September of this year was 708, and many lenders will accept scores as low as 620.

Separate fact from fiction

At Embrace Home Loans, we’re experts in VA mortgage lending. We can help you understand your VA mortgage benefit, and we’ll work with you to get the financing you need for your new home. Call us today at 407-733-6425 and get the facts about VA mortgage loans.

1 http://www.benefits.va.gov/HOMELOANS/documents/docs/2016_newsletter.pdf

2 http://www.elliemae.com/origination-insight-reports/Ellie_Mae_OIR_SEPTEMBER2016.pdf

3 https://www.mba.org/2016-press-releases/may/foreclosures-continue-to-decrease-delinquencies-flat

Four Ways to Tell if a VA Loan is Right for You

Mortgage loans guaranteed by the Department of Veterans Affairs (VA), or VA mortgages, offer a number of incredible benefits including no down payment, no mortgage insurance, flexible underwriting, and limits on closing costs and fees. Other mortgage options typically can’t match these benefits. If you’re a Florida home buyer, how can you tell if a VA loan is right for you?

You’re eligible: For starters, you have to be eligible. Typically, that means you’ve served in the military for 90 consecutive days during war, 181 consecutive days during peacetime, or at least six years in the National Guard or Reserves. There are some other beneficiaries, like surviving spouses or cadets at different military academies, so you should double-check if you think you might be eligible. You’ll need to get a Certificate of Eligibility (COE) from the VA, but lenders will often help you get the COE.

You plan to live in the home you buy: The VA loan program is for people who plan to live in the homes they buy full-time. You can’t use VA loans to buy investment property or vacation homes. However, in some cases, your spouse may be able to fulfill this requirement.

You don’t want to make a down payment: The main benefit of a VA loan is buying a home without a down payment. You also won’t have to pay mortgage insurance. If you want, you can certainly make a down payment. But it’s not required.

You don’t want a fixer-upper: VA loans require safe and structurally-sound houses, and there is an appraisal process to verify that the home you’re buying meets the minimum property requirements. So, you can’t buy a fixer-upper property with a VA mortgage.

Learn more about VA loans

If you fit the profile outlined about, give Embrace Home Loans a call at 407-733-6425. We’re experts in VA mortgage lending, and we’ve helped veterans in Florida determine their eligibility and obtain VA loans. We’d be happy to answer your questions and work with you to get the financing you need for your home.

You Don’t Have to, but Should You: Down Payment & VA Loans

Qualified veterans are eligible for mortgages that are guaranteed by the Department of Veterans Affairs (VA), and these VA mortgages can be a very good deal. One of the most attractive benefits is the fact that VA mortgages don’t require borrowers to make a down payment. However, if you’re an eligible veteran and you’ve got the funds for a down payment, should you make one?

Benefits of a down payment

There are reasons for veterans to make a down payment for their VA mortgages:

  • Lower funding fee. VA mortgages have a funding fee, which helps finance the VA mortgage program. The fee can be financed with the mortgage. The fee for an eligible first-time homebuyer is 2.15 percent of the loan amount if he or she makes no down payment, and it’s 3.3 percent for non-first-time VA homebuyers. With a 5 percent down payment, the fee drops to 1.5 percent, and a 10 percent down payment lowers it to 1.25 percent.
  • Lower monthly payment. Of course, a down payment means your monthly payment will be lower because you’re not borrowing as much money.
  • More home equity. A down payment means you’ve got more equity in your home, which can improve your financial picture. For example, it can make it easier to sell the home if you need to move.

Keeping your cash

Even if you do have cash available, you might find better uses for it than making a down payment. For example, you can save it for emergencies, use it to renovate your new home, or pay off higher-interest rate debts, like credit cards. If you’re thinking about a VA mortgage, contact Embrace Home Loans at 407-733-6425. We’ll work with you to help you decide whether or not a down payment is right for you.

VA Streamline Mortgages in Florida are on the Rise

Eligible veterans and active military members in Florida can take advantage of the Department of Veterans Affairs (VA) Interest Rate Reduction Refinance Loans (IRRRLs) to lower their interest rates and mortgage payments on their VA mortgages. Increasing numbers of Florida veterans are doing so. In fact, IRRRLs in Florida increased by a whopping 83.5 percent from 2014 to 2015, with 10,582 loans issued in 2014 and 19,419 loans issued in 2015.

The current low-interest rate is fueling this dramatic increase in VA refinance loans, but there are other reasons that eligible veterans and military personnel are rushing to refinance their home mortgages. VA refinance mortgages are called “streamline” loans because many of the traditional refinancing documentation isn’t required. That makes the VA IRRRL a fast and efficient option for VA mortgage refinancing.

VA Streamline Refinance Advantages

A VA IRRRL doesn’t require a property appraisal like many other mortgages do. And VA lenders aren’t required to get credit reports, set minimum credit scores, or verify income or savings. However, many VA lenders have internal policies for credit scores, some as low as 580 and credit reports to verify mortgage payment history only. The good news is that these requirements are typically much more lenient than those for other mortgages.

Other advantages include the fact that VA refinances allow the borrower to close the refinance loan without any out-of-pocket costs since the VA allows origination fees, VA funding fees, closing costs, and other costs to be rolled into the new refinance loan.

Benefiting You

The main rule that VA streamline refinance loans must follow is that the new loan must benefit the veteran. Obviously, lower interest rates and mortgage payments do benefit the veteran, but there are other benefits that veterans can pursue, including converting from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, or getting cash (up to $6,000) for energy-efficient improvements to the home. If you’ve got a VA mortgage in Brevard County or elsewhere in Florida, Embrace Home Loans can work with you on a VA streamline refinance. Call us today at 407-733-6425.

Top 4 Myths About VA Loans

Mortgage loans guaranteed by the Department of Veterans Affairs (VA) are usually referred to as VA mortgages or VA loans. These loans aren’t actually issued by the VA but are offered by qualified lenders to eligible veterans, active service members, and some family members. These loans are a significant benefit to eligible borrowers in Florida and other states, and they offer many advantages, including no down payment, no private mortgage insurance, very competitive interest rates, and less stringent qualification standards.

While VA loans are very advantageous to home buyers, some people may shy away from using VA mortgages. Frequently, it’s because of some myths about VA loans, which simply aren’t true:

  • VA loans are slower. Wrong. VA loans can frequently close faster than conventional mortgages. In general, though, closing times for VA loans are comparable to conventional mortgages.
  • VA buyers can’t afford expensive homes. Not true. VA borrowers can buy homes up to $417,000, which is the same conforming limit set by government entities Fannie Mae and Freddie Mac, with no down payment. For more expensive homes that are priced over the conforming limit, VA borrowers can make a down payment and obtain a VA jumbo loan.
  • VA loans are hard to get. In fact, as noted above, the income, credit and asset qualification requirements are more flexible for VA loans than conventional mortgages.
  • VA appraisals are complicated. VA loans aren’t intended for “fixer-uppers,” and the VA appraisal process is designed to weed out homes that aren’t safe or structurally sound. If the home is in good condition, the VA appraisal isn’t very different from conventional appraisals.

VA mortgages are one of the best mortgage options available today, and anyone who is eligible should consider the VA lending program. At Embrace Home Loans, we’re experts in VA lending in Brevard County and in the state of Florida, and we’ll be happy to the advantages of VA loans with you. Call us at 407-733-6425 for more information.

VA Loans and a Surviving Spouse

Mortgage loans guaranteed by the Department of Veterans Affairs (VA) are very beneficial to eligible servicemembers and veterans in Florida and other states. Florida VA mortgage loans offer highly competitive rates, no down payment, and no private mortgage insurance. One lesser-known benefit, however, is that the surviving spouse of a deceased eligible veteran can also use VA loan program.

For the surviving spouse to qualify, the deceased service person must have:

  • Died in the line of duty
  • Passed away from a service-related injury or disability
  • Been missing in action or a prisoner of war for 90 days
  • Have died from any cause after having been a totally disabled veteran for 10 years

In addition, surviving spouses are exempt from VA funding fees. This fee is based on a percentage of the loan amount, and it’s used to support the VA loan program, so this exemption could save the surviving spouse thousands of dollars over the life of the mortgage.

Most spouses can’t qualify if they’ve remarried, but those who remarried after the age of 57 and after December 16, 2003, may qualify. In fact, thousands of surviving spouses qualify each year for the VA mortgage loan. In 2014, 2,369 spouses qualified, and in 2015, the VA guaranteed mortgages for 3,116 spouses.

Surviving spouses may also qualify for streamlined mortgage refinancing through the VA. The streamline refinance option can lower the interest rate and the payments for existing VA loans. In addition, income verification is usually not required. The VA streamline refinance option can be very helpful for surviving spouses since income could be a problem if the service person has passed away. To qualify, the spouse must have been married to the eligible veteran at the time of death and be named on the original VA loan.

If the spouse is not on the original loan, he or she may still be able to use a VA cash-out loan to tap into the home’s equity. If you’re the surviving spouse of an eligible veteran and you’re interested in a Florida VA mortgage loan, call Embrace Home Loans today at 407-733-6425. We help veterans and surviving spouses get VA mortgages in Brevard County and across Florida. We can review your mortgage options and help you decide what might be right for you.

Buying a Condominium with a VA Loan

There are a lot of good reasons to buy a condo in Florida. You may not want to maintain a yard, for example. And condos frequently come with a range of amenities, like pools, gymnasiums, or proximity to the beach. Or you may prefer to be closer to work, and condos are often located closer to cities than single-family homes.

So, it’s no wonder that some veterans who are eligible for a VA mortgage may want to purchase a condo. If you’re an eligible veteran interested in shopping for a condominium in Florida, here are some things you should know:

  • The condo must be approved. The Department of Veterans Affairs has an approval process for condos, and the homeowner’s association (HOA) of the condominium needs to submit an application and pay a fee. That means you probably shouldn’t spend any time looking at condominiums that aren’t on the approved list. If you do want to purchase a condo that isn’t already approved, you’ll need to work with your real estate agent, loan officer, and the condo’s HOA to get it approved.
  • You can search for approved condos. The VA maintains a searchable database of condominiums on its website. You can search by condo name or ID, the regional VA office that registered the condo, or its city/county and state.
  • The condo must meet VA standards. To be approved by the VA, the condominium must meet certain requirements:
    • At least 50 percent of the units must be occupied by owners, not renters.
    • Less than 15 percent of the owners can be behind on their HOA dues.
    • If the condo is new or recently converted from apartments, at least 75 percent of the units must be sold.

Investing in a condo

While you’re the only person who can decide if a condo is right for you, there are some general guidelines. If you’re planning to stay in one place for several years, the money you would normally spend on rent could be invested in your own place. As already noted, perks like pools, gyms, and clubhouses can be very attractive. Of course, you should also be aware of resale value – generally speaking, condos are more popular in areas with large amounts of young professionals or in areas with large concentrations of retirees. If you think a condo is right for you, and you’d like to see how you can use your VA mortgage benefit to buy one, talk to the experts at Embrace Home Loans at 407-733-6425. We’ll work with you to finance a condo that’s just right for you.

The VA Funding Fee: What You Need to Know

Mortgage loans guaranteed by the Department of Veterans Affairs, commonly called VA loans, are one of the least expensive ways to finance a home purchase. Eligible military personnel can get loans at extremely attractive interest rates, with no required down payment, and they pay no mortgage insurance.

However, most qualifying veterans who take advantage of VA loans do pay one fee that other mortgages don’t include. Called the VA funding fee, this money is used to support the VA mortgage program. Even with this fee, a VA loan is an extremely economical way to buy a house.

What is the Fee?

The VA funding fee is calculated as a percentage of the amount of the loan. However, not every borrower will pay the same percentage. Funding fees for buying a home can range from nothing to 3.3 percent of the loan amount, and funding fees for refinancing can vary even more. The fee is determined by the loan purpose, the type of home purchased, the veteran’s military experience, and any down payment.

Of course, most people would like to pay no fee, but that option is only available to veterans who:

  • are receiving compensation for service-connected disabilities.
  • would be receiving compensation if they weren’t already getting paid for active duty or receiving retirement benefits.
  • are spouses of veterans who died while on duty or from a service-related disability.

Typically, if you are eligible for an exemption from the funding fee, that information will be noted on your Certificate of Eligibility (COE) from the VA.

How is the Fee Set?

Typically, most first time VA borrowers will pay a funding fee of 2.15 percent of the loan amount when buying a home with no down payment. With a 5 percent down payment, the first time borrower pays 1.5 percent. With a 10 percent down payment, the first time borrower pays a 1.25 percent funding fee.

Veterans who use their VA loan benefit more than once will pay the maximum fee of 3.3 percent unless they make a downpayment of at least five percent. With a down payment, their fees are the same as first time borrowers.

Members of the Reserves or National Guard pay higher fees. With no down payment, they will pay a 2.4 percent fee, with a five percent down payment they pay 1.75 percent, and with a 10 percent down payment, they pay a 1.5 percent fee.

Other funding fees include:

  • Cash-out refinances. Regular military veterans pay 2.15 percent the first time they use this option and 3.3 percent after that, while Reserves and National Guard pay 2.4 percent the first time and 3.3 percent thereafter.
  • VA streamline refinances. For all these loans, the funding fee is only 0.5 percent.
  • VA assumed loans. The fee for assuming a VA loan is also only 0.5 percent.
  • Manufactured homes. These have a funding fee of one percent, regardless of the type of veteran.
  • VA construction loans. These match the first time purchase loans for the types of veterans and down payment amounts

Paying the Fee

Veterans can pay all or part of the fee in cash, but most veterans roll it into their loan amount so they don’t need to come up with the cash at closing. Also, the seller can choose to pay the funding fee, along with some other closing costs, as long as the total of all fees paid by the seller doesn’t exceed four percent of the loan amount.

Find Out More

At Embrace Home Loans, we’re experts in VA lending. We’ll help you review your VA mortgage loan options and develop a loan that fits your budget and your housing needs. Call us today at 407-733-6425, and we can get started on helping you get into your new home.