Mortgage for Combat Veterans

The Mortgage for the Combat Soldier or Veteran

Combat Soldier

If you are serving or have served in a combat position in the armed forces, you face unique challenges when you exit the military that non-combat positions don’t face. Because you are facing those challenges, you want buying a home to be as simple and painless as possible. We’ll talk about general guidelines to make your home loan application and closing process easier, and we’ll also talk about some options that may be available to specifically help combat veterans.

 

The Basic Process Explained

The first step in having a smooth application and closing is to know all the steps that are going to be required. The first thing you want to do is pre-qualify for a loan. This involves calling a home loan company and saying, “I want to pre-qualify for a home loan.” The receptionist will connect you with a loan officer who will walk you through the process. You can do this with just one lender, but it can be helpful and enlightening to do this with at least three lenders. There are also online companies that will facilitate a search for the lenders in your area that will offer you the best terms, but these companies usually charge a fee. In order to pre-qualify, you’ll have to answer a number of questions about your work history, your income and the income of your spouse (if applicable), and your debt. Only a certain level of verification will be done, since the purpose of pre-qualifying is to tell you what you could qualify for if all your information is accurate.

 

After you pre-qualify, you’ll be given a maximum amount that you could be qualified for from that lender, and you’ll probably also be given an idea of the interest rate and closing costs associated with that loan. The next step is to find a house. You can do this by opening a web browser, going to google.com, and typing “houses for sale in zip code #####”, using the zip code that you would like to live in. If you’re wanting to look in more than one zip code, just choose one, because the websites that allow you to browse homes will all let you search surrounding zip codes as well. If you already have a home in mind, compare its sale price with the amount you are able to qualify for. If the home is just a little bit too expensive, consider contacting the seller or getting a real estate agent to do so and see if they can drop the price a bit for a pre-qualified buyer. Once you’ve selected the house you want, you (and/or your agent) will need to work with the seller to draw up the sales contract. At this same time, you will also need to begin the application process with your loan officer. If neither you nor the seller have real estate agents, most loan officers will be willing to provide legally sound documentation that protects both of you. The loan officer will walk you through the process of applying for the loan, and either your agent or your loan officer will explain how the documents that both you and the seller need to sign work.

 

You’ll be expected to provide a great deal of financial documents such as bank statements, W2’s from previous tax years, recent pay stubs, and credit card statements. If you have an auto loan, you’ll need to provide a recent statement from that as well. If you have those things on hand the process shouldn’t be too bad.

 

The Special Options Available to Disabled Veterans

Combat veterans have a higher chance of being disabled, and the VA has two programs that are designed to help disabled veterans obtain housing that gives them freedom and mobility. The Specially Adapted Housing Grant (SAH) “helps veterans with certain service-connected disabilities live independently in a barrier-free environment.” The SAH grant can be used to construct a specially-adapted home on a new plot of land or on a plot of land that is already owned if it is suitable, as well as to remodel an existing home if suitable changes can be made, or even to pay down unpaid principal on a home that’s already been adapted without the use of a grant. The amount of money available through SAH varies, but you can learn more on the VA website.

 

The Special Housing Adaptation (SHA) grant operates on a somewhat smaller scale and is intended to adapt existing homes of veterans or family members of veterans with whom the veteran lives to help accommodate the veteran’s disability. These grants are only available to veterans with permanent and total service-connected disability such as the loss of limb, severe burns, blindness, or other serious injuries. If you think you might be eligible for SAH or SHA, definitely work with your local VA office to apply.

 

Top 5 Benefits of a VA Loan

Rating the Top Five Benefits of a VA LoanBenefits of the VA Home Loan

  1. The number one benefit of a VA loan is the ability to take advantage of lower interest rates with ease when they become available. Seriously how easy can it be? You have a pulse; sure we can do a refinance for you. Okay, I’m being facetious, but no appraisal, no income or asset verification. You don’t have to provide us with tax returns, W-2’s, pay stubs, bank statements…none of that! Are you current with your VA loan? Check. Do you have more than one or two 30 day late payments on your mortgage? “I’ve been late before”? Fine, was it 30 days past due or did you just go 15 days over and get assessed a late fee? Check
  2. Okay, so how much do I have to bring to closing to do this refinance? Nothing, nada, zero, zilch! As a matter of fact, this Streamline Refinance is going to put money in your pocket. Free money? NO! It’s kind of like doing small but useful cash out refinance. You will skip 2 payments and get an escrow balance refund. Why? Because interest is paid in arrears on mortgage loans my friend. When you make a payment to your mortgage company on July 1st, that is for all of the interest due from June. When we go to pay off your loan the bank is going to ask us for more than just the principal balance, they are going to want their interest up and thru the day we fund your new loan. You also have prepaid interest on the new loan for the days of interest left in the month in which you close. Thus, the 2 skipped payments. What is this escrow refund? Well, my friend, you have been paying into this account each and every month. This is for your taxes and insurance, and every VA loan has to have an escrow account to pay these bills when they come due. We have to recreate this escrow account for the new loan. We will verify with your insurance company and the title company will send us a tax cert to make sure we are escrowing for the proper amounts. If your current lender has everything right and taxes haven’t changed you should receive an escrow refund of almost the exact same amount.
  3. There must be a ton of paperwork involved? Not at all! We will send you a short 2-3 page loan application to get started. You will provide 3 or 4 other items to register and lock your loan and you will be closing within 3 to 4 weeks. What items do you say? Pretty easy stuff, like a copy of mortgage statement, proof of Homeowners Insurance, a copy of all borrowers’ drivers’ licenses and ss cards if not shown on the dl. The hardest thing to find may be the Mortgage NOTE, but I will send you a sample copy of what one looks like. You will find this document in the papers from your last closing. Easy, Peasy, Lemon squeezy!
  4. Did you know that VA loans are assumable? No, is that a good thing? Seriously, that is a great thing! What does it mean? Well, when you go to sell your home or acquire someone else’s home you/they can assume the mortgage. This means you/they agree to make all future payments on the mortgage as if you/they had taken it out initially. So if interest rates go up, this is a huge advantage to sweeten the deal, because they can assume your loan rather than paying current market prices/interest rates. This can save the buyer hundreds maybe thousands of dollars. The buyer should be willing to split that benefit with the seller. So if interest rates rise, the value of your home just went up!
  5. Finally, the fifth sweetest benefit of a VA loan is that you can borrower up to 100% of the home’s value without having to pay monthly mortgage insurance. With Conventional and FHA loans, you have to pay monthly mortgage insurance unless you have at least 20% down. Thru the VA, you have a one-time VA funding fee of 2.15% for the first property and 3.3% for each subsequent property unless you receive VA related disability. If you receive at least a 10% service related disability the VA funding fee is waived.

So to recap…

1) It ‘s super easy to qualify for a refinance.

2) Nothing out of pocket, cash in your pocket.

3) Less paperwork to refinance.

4) VA loans are assumable.

5) You can borrow more with lower cost.

Daemon Wathen

Hopefully, this helps you understand the huge benefit a VA loan can provide. Thank you for your service.

 

Daemon Wathen is a seasoned loan officer of 7 plus years.

“I really enjoy working with Veterans that have given so much for this great country and for me. I strive to educate our clients about the variety of loan products we have to offer and let them choose the loan that suits them best. I strive to build a relationship with each borrower I serve, so they will  feel comfortable in referring friends and family of the military. My hobbies include Golf, Sports Watching, and spending time with my 3 kids and wife.”

VA Loans – How to Request an Appraisal

 

Deciphering the VA Lender’s Handbook Chapter 10 Part 2

 

Below is a chart provided by the Handbook that numbers and explains the basic steps of requesting a VA appraisal. This information is generally meant for lenders, but is important for anyone planning on requesting an appraisal to know. These are the basic steps, so more details on these steps will be provided in more articles on the VA Appraisal. The Chart:

Steps  
1 Ensure that the property is eligible for appraisal and all other appraisal requests can be satisfied. Contact the VA office of jurisdiction for the property if there are:

  • questions about the property’s eligibility, or
  • if the property is not eligible for appraisal but is already the security for a VA loan

Note: Every property eligible for the Lender Appraisal Processing Program (LAPP) should be processed under LAPP. If a LAPP lender fails to process an eligible property under LAPP, the request for VA guaranty must include a detailed explanation.

2 Access TAS, and provide all necessary information about the case.
TAS will:

  • Assign
    • a case number (in liquidation cases, this will be the existing VA loan number for the property, as provided by the requester)
    • an appraiser (since VA is required by law to select the fee appraiser on a rotational basis from a panel maintained by VA), and
    • an inspector, if appropriate, and
  • issue a complete VA Form 26-1805-1, VA Request for Determination of Reasonable Value, which includes the above information

Note: LAPP lenders and loan holders/servicers who wish to have the appraisal report e-mailed to them must provide an e-mail address in Item 5 of the appraisal request.

3 The same day as the assignment is made e-mail, fax or mail the TAS-generated VA Form 26-1805-1, and any other required documentation, to the appraiser assigned.
For liquidation appraisals, include the name and telephone number of the current or last known occupant. If the property is vacant, aso include the keys to the property, or sufficient information to enable the appraiser to gain access to the property; for example, the name and telephone number of a local person to contact.
If appraised as “Proposed or Under Construction.”

  • ensure that the construction exhibits meet the requirements
  • mark the case number assigned on the outside of each set of the construction exhibits
  • include a set of the construction exhibits with the appraiser’s VA Form 26-1805-1. This will be considered the VA file copy, and
  • send the inspector, if assigned, a copy of VA Form 26-1805-1 and a set of the construction exhibits.

If the veteran is acting as the general contractor in building a home for his or her own occupancy, include:

  • any construction exhibits needed for appraisal purposes, and
  • the veteran’s written agreement to pay for any special VA fee inspections that may be needed to ensure that the work meets VA Minimum Property Requirements for existing (not proposed) construction.

Ordering a VA Home Appraisal

Now, the above steps assume that TAS is available for use, which is true in most cases. However, if TAS is unavailable, you can still submit a request for an appraisal. Complete step 1 in the chart above as normal, then, instead of getting on TAS, fill out VA Form 26-1805, VA Request for Determination of Reasonable Value. VA Form 26-1805 needs to be typed and completely filled out in order for the request to be processed. There are only three exceptions for this:

  • properties already listed on a valid VA Form 26-1843a, Master Certificate of Reasonable Value
  • loans for alterations, improvements or repairs of $3,500 or less, or
  • partial release of the security for a VA-guaranteed loan

 

If the property is being appraised under LAPP, the put “LAP” as the prefix for the case number and write “LENDER APPRAISAL PROCESSING PROGRAM” under the lender’s name.

 

That is the basic process for requesting a VA appraisal. As you can tell, it’s somewhat complicated, but can be done by parties other than the lender if necessary. There are more specific instructions, but they have to do with an appraisal for a property to be liquidated, which means that it isn’t something borrowers will ever really deal with. If you are looking for more information on this, feel free to check out the text of the Handbook on the VA’s website.

 

5 of the Best Benefits for VA Loans

There are many reasons why if you qualify you should get a VA loan. Here is a quick list of the best benefits for getting a VA loan for your home.

 

  1. No money down required. That’s great news if you are looking for a home because often saving up for a down payment can take years and by renting you will lose money during those years you wait to buy the right home.
  2. Regulations on fees. This means the government has placed a cap on the fees submitted by a lender and you won’t be paying as much out of pocket, unlike other loans.
  3. The government is backing your loan. They are the lender and able to work with you on what you can pay. This means that you don’t have a private lender and again fees that you pay along with interest rates are regulated to be reasonable.
  4. Resale allows the loan transfer. The VA allows for transferring of the loan to another buyer that wouldn’t otherwise be eligible for a VA loan. This is very attractive to potential buyers and could help you resell faster.
  5. Less stringent underwriting standards. About 80% of VA loan qualifiers wouldn’t qualify for a conventional loan otherwise and wouldn’t be able to afford a home. The VA loan provides an easier way to qualify and purchase a home with affordable interest rates and payments.

 

To see if you may qualify for a VA loan click here

© 2020 Low VA Rates, LLC™. All Rights Reserved. Low VA Rates, LLC ™ is not affiliated with any U.S. Government Agency nor do we represent any of them. Corporate Address: 384 South 400 West Suite 100, Lindon, UT 84042, 801-341-7000. VA ID 979752000 FHA ID 00206 Alaska Mortgage Broker/Lender License No. AK-1109426; Arizona Mortgage Banker License #0926340; California DBO Finance Lenders Law License #603L038; Licensed by the Delaware State Banking Commission License #018115; Georgia Residential Mortgage Licensee License #40217; Illinois Residential Mortgage License #MB.6761021; Licensed by the New Jersey Department of Banking and Insurance, Ohio Mortgage Loan Act Certificate of Registration #SM.501937.000; Oregon Mortgage Lending License # ML-5266; Rhode Island Licensed Mortgage Lender License #20143026LL; Texas License LOCATED at 201 S Lakeline Blvd., Ste 901, Cedar Park, TX 78613; EAH061020 NMLS ID# 1109426 Consumer NMLS Access www.nmlsconsumeraccess.org. Click on these links to access our Privacy Policy and our Licensing Information. Consumer's total finance charges may be higher over the life of the loan. Consumer NMLS Access - NMLS #1109426.

*Annual savings calculator based on 2015 monthly average savings extrapolated year-to-date.