Take Advantage of Today’s VA Loan Rates

For years, the VA loan has been the best mortgage option on the market for active military members and veterans. It is backed by the federal government and offers reduced interest rates. In fact, VA rates are so low that some people are skeptical of its validity, suspecting that the offer is “too good to be true.” However, by understanding and taking advantage of VA home loan rates, veteran buyers can save thousands of dollars. Find out how to get the most out of the VA loan that you earned!

Today’s VA Rates: What are the Benefits?

VA Loan Interest Rates

Since the VA loan is guaranteed by the Department of Veterans Affairs and is, therefore, protected against loss, mortgage lenders have the ability to make interest rates lower for applicants. Historically, the interest rate on a VA mortgage beats the market rates by 3/8 of a percentage point or more. Although this may not sound like a significant decrease, even an interest rate difference of 3/8 of a percent point can save a homebuyer thousands of dollars. VA loan rates also routinely beat the interest rates offered for FHA or conventional loans.

But that’s not all – besides consistently offering better rates than other types of home loans, today’s VA loan rates are now lower than they have been in years.  Whether you compare these rates with other home loan types or with historical VA rates, today’s VA loan rates trump the competition on all accounts.

Type of VA Loan: Which One is Right for You?

With access to lower interest, it is even more important to choose a mortgage loan that fits your situation. There are three types of loans that are most frequently employed when buying a house: fixed-rate, adjustable-rate, and hybrid.

A fixed-rate mortgage is a home loan with an interest rate that remains the same throughout the life of the loan. The homebuyer must pay equal monthly payments until the loan is completely paid off. Fixed-rate home loans typically last for either 10 years, 15 years, 20 years, or (the most common choice) 30 years.

An adjustable-rate loan is a home mortgage loan with an interest rate that changes from year to year. However, the interest at the beginning of its term is usually lower than the rate for a fixed-rate’s term.

Hybrid loans have aspects of both the fixed-rate and adjustable-rate mortgages. Depending on which hybrid you go with, the loan is fixed for a period of 3 to 10 years, after which the interest rates begin to adjust, and payments are amortized based on the term’s balance. (More about the advantages here.)

Many homebuyers are drawn to the 30-year fixed rate, seeing it as the only option that provides long-term certainty. Kinds of VA Loans and Getting the Best Interest RateHowever, it is important to recognize that, because the home loan is perpetually at the same high interest rate, this mortgage loan typically will cost the homebuyer a lot of money over time. Since most of the payments with the 30-year fixed-rate loan go towards paying off interest instead of simply paying the principal, homebuyers spend thousands of dollars more than they would have spent using another kind of loan. Therefore, with the lower interest rates offered by the VA, it is often better to consider using an adjustable-rate loan or hybrid loan. And of course, even if you do lock into a great rate now, don’t forget the benefits of to refinancing when interest rates fall.

VA Loan Interest Rates: Where Can You Find a Low Rate?

When dealing with costs for purchasing and refinancing your home, the best option is to seek advice from your VA specialist. Interest rates fluctuate daily depending on the market, and part of a VA loan officer’s job is to watch the interest rate landscape and predict whether interest rates are rising or dropping. A VA loan specialist can advise you on whether or not refinancing your mortgage loan can save you money. Call a VA loan officer today and find out more about how you can save money with our low VA loan interest rates.

Historically Never a Better Time for a VA Home Loan

Let me take you back 60 years—that would have been 1963. In 1963 interest rates for a 30-year fixed home loan dropped below 6 percent. For approximately 40 years—between 1965 and 2005—interest rates stayed above that 6 percent mark, often several points above that mark.

There is no way to know if history will repeat itself, but it is a fair question to ask: if we were to go another 40 years before interest rates returned to the present historic lows, where would YOU be and would you be in a better position to take advantage of that opportunity?

There is no time like the present!

You have many different loan options right now for a VA home mortgage. You can get a fixed loan, an adjustable rate mortgage (ARM), or a refinance—all at historic lows. Just how good is the current VA interest rate? As I said earlier: you may not have a better opportunity for a veteran mortgage loan in your lifetime.

The timing is absolutely wonderful for a VA loan. I’d like to offer some advice, because almost everyone needs a lender to get into a home and everything in the lending industry is about risk assessment.

There are 3 key elements to any mortgage transaction.

  • Credit. Your credit score and history are the driving factor in this market. You can find out more about your credit (and even download a free credit report) at any of the “Big Three” credit bureaus’ websites:
    • Experian
    • Equifax
    • TransUnion
  • Debt to Income (DTI). This ratio determines how much of a payment you can afford under lending guidelines. The baseline for DTI is usually around 41%. (Calculate the money you spend on house maintenance, tax, insurance premiums, car loans, credit card bills, educational loans, etc. Then, calculate the amount you earn every month. Finally, calculate your debt-to-income ratio by dividing the first number by the second number.)
  • Loan to Value (LTV). This ratio determines how much you borrow against the value of the property. VA loan requirements allow for LTV & CLTV on purchases and IRRRL’s to 100%. The LTV & CLTV on cash-out refinances are allowed up to 90% of appraised value.

Additional Guidelines

A VA mortgage loan requires a certificate of eligibility (COE).  Getting help to apply for your COE (and get your other questions answered) is really pretty simple.

  • Credit Score. The VA insures VA loans and does not require a minimum FICO score. All lenders have their own requirements in addition to those of the VA. Most lenders today require the minimum mid-score in a tri-merge report to be at 620 or better. The credit report must clearly support an applicant’s ability to meet financial obligations in a timely, responsible manner. Lowvarates.com specializes in working with those below that tri-merge number.
  • Established Trade Lines. VA loan requirements allow for both traditional and alternative credit trade lines. However, most lenders require that you must have at least two lines of credit that you have maintained for at least two years.

Late Payments

VA loan requirements does not allow for more than one debt payments being more than 30 days late if the incidents have occurred within the last 12 months. This includes more than one late payment on a single account. In addition, individual lenders may have restrictions on late payments made in the last 12 months. No mortgage late payments made in the last 12 months are allowed on purchase and refinance of VA loan. And only a 1×30 mortgage late payment is allowed on a VA streamline (IRRRL).

Collections

VA loan requirements specify that most collection accounts outstanding must be paid, no matter what their age as long as they are currently delinquent and/or due and payable. Isolated collection accounts do not necessarily have to be paid off as a condition for loan approval. For example: a credit report may show numerous satisfactory accounts and one or two unpaid medical (or other) collections. In such instances, while it would be preferable to have collections paid, it would not necessarily be a requirement for loan approval.

Bankruptcies

Chapter 7 must be discharged for at least 2 years with no late payments since the date of discharge. Applicants who filed for Chapter 13 and have satisfactorily made at least 12 months of payments, and the Trustee or the Bankruptcy Judge approves of the new credit, the lender may give favorable consideration.

Liens

VA loan requirements will not allow for any delinquent federal debt such as student loans or tax liens or other government debt, no matter what their age as long as they are currently delinquent or due.

Foreclosures

VA loan requirements state that an applicant may be eligible if there was no loss of security on a foreclosure or a satisfied judgment that was completed more than 12 months prior to the date of the application. However, if there was loss of security due to a foreclosure, the applicant is ineligible for a VA loan within 36 months after foreclosure.

Child Support

VA loan requirements state that child support in arrears must be brought current. If a payment schedule has been established with the Court for the past due amount and a history of satisfactory payments is provided, the applicant will not be required to pay the past due amount in full. Both the payment for the past due child support and the regular court ordered support payment will be included in the applicant’s income to total debt ratio.

If you are paying court ordered child support, it is considered a liability payment (even though it may not show up on your credit report or your pay stubs as wage garnishment); it counts against your debt ratio (DTI). Receiving court ordered child support is considered a source of income.

Down Payment

VA loan requirements for a home purchase do not have a minimum down payment. The VA loan is one of the very few loans that can be financed to 100% with $0 down payment.

If you think about it for a minute, the current lending climate is one of the truly unique opportunities of our times. It won’t take long to contact lowvarates.com and get your questions answered as you start the ball rolling toward home ownership.

Get Started With Your VA Loan Today

US Credit Rating Downgraded

How does the downgrading of the US credit rating affect VA interest rates?

 

Over the weekend, S&P, one of three main credit rating agencies, decided to downgrade the United States to an AA+ rating from an AAA for the first time in almost 80 yrs.  Many potential home buyers or people looking or thinking about refinancing may wonder what this means for them.  We will address specifically Veterans and VA rates today, but the post can be applied to anyone.

Over the weekend, many market analysts and gurus were trying to guess and predict what would happen to interest rates in response to the credit downgrade.  If you were to read a book on the economy or bet on the most likely outcome, you would have predicted, just like the pros, that interest rates would be higher today.  Here is how you look at why that would happen.  Suppose you were lending someone money who had perfect credit and no likelihood of not being able to pay you back, it was almost guaranteed you would get your money back plus the interest.  You would probably give them a very low and stable interest rate in return for them not being a risk to you or your money.  Now suppose that you had a very good reason to believe that the once perfect credit person you were lending money to, would perhaps not be able to pay you or would maybe miss some payments here or there?  Would you want to keep lending them money at the same interest rate or even the same large amounts?  Most likely no!

Well, this is how countries, investors, and institutions that were buying US treasuries were expected to react this morning.  One would think they would all start taking money back from the US and this would in turn put the US in a tough position and would ultimately increase interest rates.  However, interestingly enough money poured into US treasuries today and drove VA interest rates lower!

One thing that is worth noting however is that VA mortgage lenders did not pass on a lot of the gains interest rates had today, but instead are in essence sitting on the sidelines to see what happens tomorrow.  Normally with as big of a rate rally as we had today interest rates on VA loans would have gotten better than they have, but VA mortgage lenders are waiting to see what tomorrow brings.  The Federal Reserve has their FOMC meeting on interest rates tomorrow too!

Here is to lower VA interest going forward.

VA Streamline: Rock Bottom Interest Rates

Save Military Personnel Possibly Hundreds Monthly

Many Americans are trying to save money any way they can. Cutting costs by stretching their dollar on food, clothing and medicine helps. But, being able to reduce large expenses on a monthly basis, would be the most help. A lot of people have refinanced their homes. Now, with the VA interest rates hitting close to or being at rock bottom, active or inactive servicemen and women who currently have a VA loan, can save big money every month. They can refinance their existing VA loans under the VA Streamline Refinance Program.

A 620 FICO Score or Home Appraisal No Longer Needed

If you have already tried to refinance under this loan program and failed, it would most likely benefit you to try to refinance again. As of April 18, 2011, the rules have changed for refinancing with the VA Streamline Refinance Program. Previous failed attempts might not be a problem for you now. This loan addresses the difficulties with your current VA loan being more than what your home is worth.

Some VA interest rates are as low as 2.75 percent with an APR of 2.45 percent. These rates are historically at low amounts. In many cases, hundreds of dollars can be saved each month on your mortgage payment.

Quick and Easy Loan Approval

The VA Streamline Refinance Program is designed for active and inactive military personnel to take advantage of the very low-interest rates. It was set up to make it easy and quick. Also, there are some places that will pre-approve you in just 60 seconds.

Other qualifying features that this loan has are:

Your existing VA loan has to be up to date on its monthly payments. You can not be behind.

There cannot be more than one-30-day late mortgage payment made on your existing VA loan within the last 12 months.

Employment and income verification will probably be needed.

A refund of your existing escrow account can be made to you.

You cannot receive any cash back funds from the refinance.

After the loan is approved, you can skip up to two monthly payments.

American military personnel and their families can widely benefit from the VA Streamline refinance of their existing VA loan, especially since the VA interest rates are very low. It will just save a lot of money each month for them. They can use the financial boost to help get caught up on other important bills. Families can stop skimping on their food, clothing and medicine expenses. Reducing monthly mortgage expenses will ease the money crunch that seems to be never ending.

VA Streamline With No Appraisal

There are different kinds of loans that will enable a homeowner to lower their interest rate. By lowering their interest rate, they’ll also be able to lower their monthly payment. Veterans get a benefit that others don’t. That’s the VA streamline loan, also known as the Interest Rate Reduction Refinancing Loan. Best of all, it’s possible to get a VA streamline with no appraisal.

VA loan holders used to be able to refinance their homes with VA streamline loans very easily. Appraisals weren’t done and credit histories weren’t pulled. But that all changed when the housing market crashed. As the economy suffered, so did real estate. VA streamline loans were impossible to get if someone was upside down in their mortgage or who had a low FICO or credit score.

Effective April 18th of 2011, it’s entirely possible to get a VA streamline with no appraisal. So, what does that mean? It means that a person can easily qualify for one of these loans which could lower their interest rate by 1% or even more. Depending on what the house is valued at, a 1% decrease can mean hundreds of dollars in savings every month.

VA Streamline Loan Benefits

There are many reasons to get a VA streamline loan. There are many benefits, too. Let’s take a look at some of the main ones.

– No out of pocket money – closing costs and other fees can be rolled into the total amount that’s being refinanced

– Low-interest rates – Enjoy rates that are lower than what the rest of the American population can get because of being a veteran

– Locked in rates – It’s not a variable rate, which means you’re locked into the low rate no matter what

After serving your country, you deserve some great benefits as a Veteran. Being a veteran entitles you to the VA streamline loan. As long as your mortgage was done with a VA loan, you’ll meet the qualifications. Without having a home appraisal or credit check, means that you’re more likely to qualify for the loan.

A VA streamline loan with no appraisal is a best case scenario when deciding to refinance your home. Many companies offer low rates, but they aren’t as low as what you can get with a VA streamline. After all, they’re designed to reward veterans. Taking advantage of this kind of opportunity will ensure that you are rewarded with a great rate that surpasses what many people in America are getting. Plus, refinancing is a much better option of getting out of a tough financial situation than bankruptcy or foreclosure.

Getting a VA streamline is much easier since April 18th. Low VA rates are just a click away. You’ll be able to fill out the application and get a response quickly. When there’s no dependency on credit checks and appraisals, you’ll be able to get a response quicker than ever. You’ll then be able to start saving money once your rate goes down.

VA Streamline Rates Fall To 4.25%

The housing market is very weak. As a result, people are defaulting on their mortgages and filing bankruptcy. All of these actions result in the economy weakening. So, what’s the federal government doing about it? They’re starting with their veterans by offering a VA streamline mortgage that can save you hundreds of dollars every single month.

If you are a veteran and have a mortgage that’s financed through a VA loan, then you can qualify for this loan. Think of the possibilities – a mortgage designed just for you, all because you’ve served your country. It’s a great benefit that you should take advantage of.

As long as your current interest rate is higher than 5%, then you stand to save a significant amount of money. Regardless of whether your current interest rate is fixed or variable, the streamline mortgage loan can be the answer you’re looking for.

The streamline mortgage is also referred to as interest rate reduction refinancing loan. The difference between this loan and the other refinancing loans that are on the market is that this is designed for veterans. Other loan companies may be able to offer a great interest rate, but it could be temporary. As soon as the market turns around, that rate that was saving you money could skyrocket, leaving you powerless to do anything about it. The VA streamline mortgage, however, is a permanent, low rate. This means that you’re locked into the low VA rate – currently as low as 4.25%.

An interest rate reduction of only 1% is enough to save you hundreds of dollars. For every 1% that you reduce your current interest rate by, you can save anywhere from $100 and $600, all dependent on the amount your loan is for. This amount of money can dramatically affect your cash flow and personal finances. Think of what you can do with a couple hundred dollars a month – you can pay off other debt, go on vacation, or create a comfort zone from your bills.

The VA streamline mortgage loan is something you can’t afford not to do. There is no out of pocket expense because pre-paid and closing costs can be rolled into the new loan amount. Other companies require you to pay that up front. The process is easy and it’s simple to qualify for. Getting the loan could change the way you’re living, all because you took advantage of the benefits that are given to you because of being a veteran.

All across America, people are struggling. The interest rate reduction loan is an opportunity to get you and the rest of the economy, back on track.

Veteran Home Owners Need to Refinance

The Federal Reserve Wednesday announced its latest effort to spur economic growth: a plan to purchase up to $600 billion of government bonds through June 2011.  The Fed, as it is called, is trying to lower interest rates, in the hopes that doing so will loosen the supply of credit and spur more economic activity. The central bank’s main tool for reducing rates is to slash the short-term overnight lending rate that banks charge to one another, the so-called Federal Funds rate. Bring short-term rates down, and long-term rates tend to follow. In normal times, that’s as far as the Fed usually goes. In the past three years, the Fed has reduced the Fed Funds target rate 10 times, from 5.25 percent to between zero and .25 percent. It’s been at that extremely low level since the fall of 2008. This is one of the reasons we have seen such amazing rates during the last couple years and why they have remained low.

BUT- that does not mean that VA interest rates will go lower.  In fact, if anything they have reached levels that they can’t break through going lower, with inflation and such.

Investors love to repeat the mantra: Don’t fight the Fed.   Also with as much firepower as the central bank possesses, the Fed isn’t the only dominant economic power in the world. And interest rates can be impacted by all sorts of factors. If China’s central bank cuts back sharply on its purchases of U.S. government bonds, which they could do at any time, interest rates will rise. Investors’ attitudes about the pace of growth, or inflation, play an important role in determining market interest rates also.  And where we have seen rates low for such a long time, more of the same seems unlikely.

Moreover, what does the Fed believe it will gain by adding more and more government bonds to it balance sheet?   That is the question isn’t it?  There are a couple of risks. First, low-interest rates and the expansion of the Fed’s balance sheet tend to weaken the dollar. But the second and larger risk is that the dollar will not weaken. Interest rates are already exceedingly low, and it’s unclear how “lowering” them a bit more will induce companies and individuals to change their behavior significantly.  In the current situation, Fed Chairman Bernanke is cranking up the volume while the political system is sitting on its hands. Imagine a two-engine jet trying to fly with only one engine working.  We need to really see both entities policies working in tandem to reap the maximum effect.

So where does this all leave us?  We’re left with rates that are no better tomorrow than they are today.  Now is the time to take advantage of the lowest rates in nearly 65 years.  It is time to realize that if foreign powers decide to exercise their options and Wall Street/investors attitudes are still in the doldrums, and then later could very well be worse than now.  As 2010 comes to an end there are also likely changes to loan programs for 2011 that could also jeopardize refinances next year that you could “get away with” this year.

Eric Jorgensen is an experienced VA loan officer and can help you with all of your VA mortgage needs.

VA Streamline Interest Rates Hit an all Time Low

If you have a VA loan with an interest rate that is higher than 4.75% fixed rate you really need to keep reading.

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For years, industry experts have told homeowners to quit sitting on the fence and to pull the refinance trigger. This has not been flawed or incorrect guidance from our real estate industry experts. The truth is nobody could have seen interest rates going any lower than they have been in recent past. The chart above shows that we have been sitting at historical lows for the past few years.

Now if you are one of those few that for some odd reason did not refinance at the behest of your family, friends, and financial advisors then please stop the insanity now and take advantage of these extremely low interest rates.

If you did refinance in the past there is still hope for you too! Rates are currently so extremely low that we have clients that have refinanced in 2003, again in 2007 and now again in 2010! If it makes sense to refinance then do it. There are no limitations to hold you back on taking advantage of the program.

If you are an active or retired military service member and have a VA loan on your home now then please consider the VA streamline refinance. These are some of the easiest loans there are for the borrower. Some of the many benefits of this streamline refinance are:

· No appraisal needed

· No income or employment documentation needed

· Fast processing times

· No mortgage payment needed for the next two months

· Save hundreds every month on your monthly payment

This loan can save you so much money, and the best part is, with Low VA Rates the process is virtually done for you! We try to get it done fast and easy with as little work as possible on your end. This means a stress-free process for you and more time to spend on the things you love, instead of worrying about your loan process.

Call Now and speak to an experienced VA loan agent. There is no obligation, it is pain-free and we commit that it will take no more than 2 minutes to see how much you can save.

How Credit Cards Affect Your Credit Score

Credit cards can affect your credit score in both positive and negative ways.  What follows are a few of the ways they can impact your credit score.  As you may be aware VA loans and VA interest rates are also affected by your credit score.

Officially closing a credit card account will lower your credit score because it (1) might reduce the length of your credit history, which accounts for 15% of your credit score, and it (2) lowers the total amount of credit you have available, which will raise your debt to available credit ratio.

To illustrate this, assume that one person has two credit cards each with a $5,000 credit limit.  This person habitually carries a $2,500 balance on one credit card.  With two credit cards, this person’s debt to available credit ratio is $10,000/$2,500 [total credit available/total debt].  This means that this person only uses 25% of his overall available credit, which is good.  If he closes one credit card, his ratio is now $5,000/$2,500, which will lower his overall credit score since he is now using 50% of his available credit.


Does this mean that one could open new credit card accounts just to improve his debt to available credit ratio?  Yes, one can, if he or she doesn’t already have too many open credit card accounts.  Too many credit card accounts can also lower one’s credit score.

On the other hand, having an open credit card that you never use can also negatively affect your credit score since, if you don’t use it occasionally, the credit card issuer might stop reporting your activity altogether.   Therefore, use your credit cards occasionally in order to help your credit score.

There is another way that credit card use can negatively affect your credit score, even if you pay off your credit card balances every month.  Suppose that you use your credit card to purchase gas, groceries, and everything else each month, always spending around $1,500 each month, but when the bill arrives, you pay the balance in full.  One would think you would get bonus points for staying out of debt and paying off the balance in full each month, but not when you consider how you look on paper. What is your credit card issuer reporting to your credit report each month — the total amount you owe at the time of the report and that you pay on time, not the fact that you pay your balance in full each month.  Therefore, on paper, it looks like you carry a $1,500 balance on your credit card and never pay it off.   Therefore, a good idea would be to have 2 or 3 credit cards and rotate them, using one for a few months, then using another, so that your credit card company can report a zero balance every few months to the three credit reporting agencies.

Note that in the months immediately preceding applying for any type of loan, particularly a mortgage loan, it would be a good idea if you paid off your credit cards in full and didn’t use them for awhile, giving your credit card issuer at least one month to report a zero balance to the credit reporting agencies.  The amount of debt being reported on your credit report is a very large factor in determining your credit score and the interest rate you will be granted, which could result in paying tens of thousands of dollars in additional finance charges on a mortgage loan.

How Credit Cards Affect a Veterans Credit Score

Credit scores can affect your credit score in both positive and negative ways.  What follows are a few of the ways they can impact a veteran’s credit score which will impact your VA home loan interest rate.

Officially closing a credit card account will lower your credit score because it (1) might reduce the length of your credit history, which accounts for 15% of your credit score, and it (2) lowers the total amount of credit you have available, which will raise your debt to available credit ratio.

To illustrate this, assume that one person has two credit cards each with a $5,000 credit limit.  This person habitually carries a $2,500 balance on one credit card.  With two credit cards, this person’s debt to available credit ratio is $10,000/$2,500 [total credit available/total debt].  This means that this person only uses 25% of his overall available credit, which is good.  If he closes one credit card, his ratio is now $5,000/$2,500, which will lower his overall credit score since he is now using 50% of his available credit.


Does this mean that one could open new credit card accounts just to improve his debt to available credit ratio?  Yes, one can, if he or she doesn’t already have too many open credit card accounts.  Too many credit card accounts can also lower one’s credit score.

On the other hand, having an open credit card that you never use can also negatively affect your credit score since, if you don’t use it occasionally, the credit card issuer might stop reporting your activity altogether.   Therefore, use your credit cards occasionally in order to help your credit score.

There is another way that credit card use can negatively affect your credit score, even if you pay off your credit card balances every month.  Suppose that you use your credit card to purchase gas, groceries, and everything else each month, always spending around $1,500 each month, but when the bill arrives, you pay the balance in full.  One would think you would get bonus points for staying out of debt and paying off the balance in full each month, but not when you consider how you look on paper. What is your credit card issuer reporting to your credit report each month — the total amount you owe at the time of the report and that you pay on time, not the fact that you pay your balance in full each month.  Therefore, on paper, it looks like you carry a $1,500 balance on your credit card and never pay it off.   Therefore, a good idea would be to have 2 or 3 credit cards and rotate them, using one for a few months, then using another, so that your credit card company can report a zero balance every few months to the three credit reporting agencies.

Note that in the months immediately preceding applying for any type of loan, particularly a mortgage loan, it would be a good idea if you paid off your credit cards in full and didn’t use them for awhile, giving your credit card issuer at least one month to report a zero balance to the credit reporting agencies.  The amount of debt being reported on your credit report is a very large factor in determining your credit score and the interest rate you will be granted, which could result in paying tens of thousands of dollars in additional finance charges on a mortgage loan.

Ways to Manage Debt with a VA Loan

We all know that our veterans are never paid enough for all the service they provide for our country. There is something wrong when the family of a service member comes home from a tour of duty and they have to deal with debt. With today’s struggling economy, it seems like everyone is looking of ways to save on their monthly expenses. But for our servicemen, like the rest of us, if you are an average homeowner your monthly mortgage payment is anywhere between twenty-five and forty percent of your monthly income. This needs to be the first place you look to lower your monthly output, and right now couldn’t be a better time to take advantage of historically low VA interest rates.

Home Equity

If you have any equity in your home you could use it to pay off high-interest credit cards or even car loans. Consolidating debt is a great way to get ahead on bills. It’s also a great way to stop having to spend your hard-earned money on re high revolving interest.

Save through Insurance

The second place that you should look to save money is in insurance. Shop around for car insurance, take a higher deductible, get rid of unused protection so you can reduce your monthly premiums. I would also recommend shopping for cheaper health insurance, and homeowners insurance.  Did you know that installing and having a monitored home security alarm in your home could save you 20% on your homeowners insurance costs?

Entertainment

It has been and always will be human nature to find a good source of entertainment. However, this entertainment can eat up your money faster than you can blink your left eye if you aren’t careful! Now, I am not trying to say stop everything. But, I would recommend next checking out just how much money you are spending and want you are spending it on. If you find something (and I almost guarantee you will) that you feel seems to be costing you a lot of money, perhaps you could live without it, or, at least look into a better deal. Here are a few tips:

 

  • Try cutting cable costs by switching companies, or cutting out the channels you don’t watch.
  • Try cutting food costs by staying in most nights instead of always going out. Try going out once a week or twice a month, then it feels like a special occasion and it can be even more fun! 
  • When you go shopping write lists and stick to them.

 

 

The trick is to budget, budget, budget! How much are you spending to go out every night?  Set a reasonable budget and limit yourself to those set amounts.

In 2009, Veterans Need to Take Advantage of the VA Hybrid Loan

Fed loses control of interest rates

On February 19, 2009 the US government signed into law the $787 Billion Economic Recovery Plan in an attempt to stabilize our faltering economy and more specifically our housing market.

One of the main focuses of this new law was to drive interest rates lower, even to levels that had never been seen before in our history of tracking mortgage rates.

This plan was working until just recently. About two weeks ago, the government seems to have lost control of the interest rate markets, and yields and rates on mortgages and treasuries have been rising faster than ever before.

Time will tell what tricks the Fed may be able to come up with next in an attempt to drive rates lower. However, I want all eligible veterans to be very aware of a brand new loan product available to veterans that will allow you to have a fixed rate and payment for a minimum of 5 years and that rate is currently around 3.5%!

Backing-up-interest-rates

Eligible veteran home owners can still get rates as low as 3.5%

As part of the Veterans Benefits Improvement Act of 2008, the President signed into law the VA Hybrid Arm. This loan brought much-needed relief to a struggling housing market; however, very few lenders are proficient enough in VA home loans to really understand why the President approved this loan for veterans.

Because of our extreme media pundits these days, when most homeowners hear the words adjustable, variable, or ARM, they immediately put their guards up. This is too bad, because the VA hybrid loan is nothing like the ARM loans talked about in the media, nor should it be feared. Rather,it has many advantages that should be embraced by veterans, just as it has been by our governing officials!

Why is a VA ARM safe, while conventional ARMS are not?

VA ARM CONVENTIONAL ARM
Backed by the VA/Govt Not backed by anyone
Cannot rise for 1st 5 years could rise in one year in some cases
Can only change 1 time a year max Can change up to 2 times a year
Has a 5% max increase Can go up over 5%
Can refinance out of at anytime May have a pre-pay penalty keeping you in the loan

As you can see, there is a lot of safety and security in the VA hybrid arm that does not exist on other adjustable type loans. Check out a press release on this topic. Pay close attention to the part about Low VA Rates offering free refinance options!

I work with loan officers that have been offering this loan (VA Hybrid) to veterans that were waiting to refinance, and then were caught off guard when rates skyrocketed. To talk to our hybrid loan specialists at Low VA Rates, free to call us at (866) 569-8272.

Here are some helpful videos:

Video #1 about the VA Hybrid Loan

Video #2 on the VA Hybrid

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