A Testament to VA's Success

VA is the Way

Loan programs are varied in their individual benefits, but for veterans there is a clear choice that stands out among the others – the VA loan.  The VA loan offers the best rate, the highest loan to value, and lower fees than other loan programs on a veteran’s primary residence.  We’ve had the benefit of working with many veterans over the years and derive a lot of satisfaction from getting them in homes.

The Servicemen's Readjustment Act, passed by the United States Congress in 1944 created the VA loan as a benefit for all of the veterans that were returning home from World War II.  The VA is actually a guarantor of the VA loan – not the actual lender.  VA backs the veteran to allow qualified lenders to issue a low interest rate/high loan to value loan.  A testament to VA’s success – over the history of the program, 18 million VA home loans have been insured by the government.

VA is true 100% financing.  Currently in Sacramento, El Dorado, and Placer Counties, VA allows 100% financing up to $474,950.   If a borrower is buying above $517,500, then VA will allow 75% for the difference over this amount.  As an example of a $600,000 purchase, VA will allow 100% up to $517,500 and 75% of $82,500, for a down payment of $20,625 – that’s only 3.4% down!  No other financing option can match a down payment that low.  

 VA has a lot more flexibility with credit than most other loans.  They have shorter wait times after foreclosure and short sale than conventional loans.  They allow for lower FICO scores and higher debt to income ratios.   VA has a unique qualifying method.   In addition to a standard debt to income analysis, VA requires that the veteran and their family have a certain amount of money left over each month to pay for expenses.  This is one of the reasons that VA loans have one of the lowest foreclosure rates. 

Another great benefit to VA is that there is no mortgage insurance, saving the veteran a lot of money over the life of the loan.  There is a funding fee, but some veterans are exempt.  Just ask us. 

VA requires that the home the veteran is purchasing is of sound condition with no dry rot or termites.  They require a clear pest report before they will loan on the property. 

Veterans eligible for VA will have 90 consecutive days of active service during wartime, or have served 181 days of active service during peacetime, or 6+ years of service in the National Guard or Reserves.  Also, if you are a spouse of a service member who has died in the line of duty or as a result of a service-related disability , you may qualify for a VA loan eligibility.   To start the process, you’ll need your Certificate of Eligibility.   There are a few ways to obtain the C of E, but the easiest way is to call us and have us access the VA portal for you.  The Easterbrook Team makes the Loan Process Easy.

Check Out 1948!

What was the most popular phrase the year that you were born?  Interesting that many words that are part of our lexicon were "hip" back in the day.  In 1948, the newly formed Fannie Mae was all the buzz.  Check out the list 

Check it out: CLICK HERE!

The Easterbrook Team "We Make the Loan Process Easy"

9168506050 

Keep Her On Your Radar!

Economist to Watch

Have you heard of Diane Swonk? No, we hadn’t either.  Watch her here take on a British commentator over Brexit and how it relates to the US economy.

  CLICK HERE and jump to minute 1:35

Ms. Swonk is really a very interesting person.  She is dyslexic, which she says is to her credit. Among being self-aware and an economist, she has a net worth of over $2 Billion – all the more reason to check her out.  

Breaking News: Federal Reserve Assessment

The Federal Reserve upgraded its assessment of the U.S. economy today, but decided to skip another interest rate increase for now.

In a widely expected move, the central bank's policymaking Federal Open Market Committee voted unanimously to keep the target range for its benchmark rate at 1.75 percent to 2 percent.

However, the committee is widely expected to approve an increase at the September meeting, and a tweak in the language from the post-meeting statement could be a nod toward more monetary policy normalization.

The statement said the labor market has "continued to strengthen," language consistent with the June meeting.

The Loan – What to Expect

Don’t Worry, We’ve Got This

Whether online, on the phone, or in person, when you first apply for a home loan and submit your loan application, the Easterbrook Team will provide you with a list of items needed to complete your loan file. Your credit report will be run at this time. In a completed loan application, there is information provided by you and information provided by third parties. Your paperwork will include items such as your pay check stubs covering a 30 day period and your last year’s W2 forms. If you’re self-employed, you can expect to provide the last two years of both personal and business returns along with a year-to-date profit and loss statement. Once you submit all of your documentation to accompany your loan application, it can get a little quiet on your end. But that doesn’t mean nothing’s happening. Far from it.

The lender then proceeds to order necessary third party documentation. There are multiple service providers that help complete the loan application so the loan file can be submitted to the underwriter who ultimately approves the loan. Your appraisal is ordered. Title insurance is needed so a title insurance policy is ordered, and so on. You will be provided an estimate of who all these other people are and what they’re going to charge for their services. Once completed, the file goes to underwriting.

The underwriter will review the application and determine whether or not the documents and the application submitted conform to the guidelines included with the selected loan program. Once the loan meets these guidelines, loan documents are prepared and sent to your settlement agent. But sometimes, in fact most times, there will be “loan conditions.”

There are two types of loan conditions, a “prior to document” condition and “prior to funding” condition. A “prior to doc” condition means the underwriter needs something else before loan documents can be ordered. This stops the loan process. But it’s not something to be afraid of. It doesn’t mean there’s something wrong and you can’t close on your home, but it’s more likely the file is missing something important. Maybe there’s an old lien on the property that hasn’t been released or maybe the underwriter wants to see one more comparable sale in the appraisal.

A prior to funding condition means the loan papers can still be delivered to the title settlement agent but the lender won’t deliver the funds for the mortgage until this condition is fulfilled. For example, credit documents within a loan must be no older than 30 days. That means a pay check stub submitted might be more than 30 days old and you need to provide a copy of your latest.

All this paperwork and communication may seem daunting, but on the Easterbrook Team we do it every day.  Don’t worry, we’ve got this.  And as our slogan says, “We Make the Loan Process Easy”. 

Conventional 3% Down Payment & No Monthly Mortgage Insurance?

Yes! We have an exciting new conventional loan product called the Freddie Mac VLIP Mortgage (Very Low Income Purchaser).   On a VLIP Mortgage, qualified borrowers will receive a credit of 2% to be applied toward Lender Paid Mortgage Insurance LPMI.  LPMI means that the borrow will have no monthly mortgage insurance!  This is a special loan for home buyers with qualifying income less than or equal to 50% of the area median income.  Rates are excellent, 620 minimum FICO.  Call the Easterbrook Team for Details at (916) 850-6050.

Reverse Mortgages

Reverse Mortgages

As we have said many times on The Easterbrook Team, having a home is your best investment vehicle.  In retirement, having a home opens up additional options that renting retirees can only dream of.  A reverse mortgage is a unique loan for 62 year and older home owners that works just the opposite of a traditional “forward” mortgage.  Instead of paying your monthly mortgage payment from your savings, it is paid for with the equity in your home.

Reverse mortgages generally are not used for vacations or other “fun” things. The truth is that most borrowers use their loans for immediate or pressing financial needs, such as paying off their existing mortgage or other debts. Or they may consider these loans to supplement their monthly income, so they can afford to continue living in their own home longer.

Homeowners that take advantage of a reverse mortgage can obtain a single disbursement option, a fixed monthly cash option, a line of credit option, or a combination of all three, depending upon the borrower’s equity and age.

If you know of someone considering the reverse option, have them call us  at (916) 850-6050 to provide them with options.  We’d love to help them and be part of the solution to their retirement plans.

We have the official reverse mortgage consumer booklets approved by HUD!

The National Council on Aging is a respected leader and trusted partner to help people aged 60+ meet the challenges of aging.  This booklet will help you understand the benefits and challenges of this funding option.  Stop by our office to pick up a copy or you can email us for a PDF copy. 

Inquire today to start your reverse mortgage!