VA Loans: Are They Assumable?

VA Loans: Are They Assumable?Members of the military, their family members, and veterans have access to a unique mortgage option called a VA loan. This can be a strong option because it provides borrowers with an opportunity to purchase a house for less than 20 percent down. While not everyone is eligible for a VA loan, there are a lot of people who are wondering, are VA loans assumable? There are a few key points to keep in mind.

What Is An Assumable Loan?

An assumable loan means that the buyer is essentially going to take over the mortgage held by the seller. Essentially, this means that the buyer is going to take over the remaining balance of the loan as well as the interest rate attached to that loan. The buyer will have to compensate the seller for any equity the seller has already accumulated. This means either providing the seller with cash for his or her equity or taking out a second mortgage to cover the difference. The biggest advantage of assuming a loan is that you may be able to secure a lower interest rate than you would in the current market. 

Who Can Assume A VA Loan?

The great news is that a VA mortgage loan is assumable. Even though a VA loan is only available to retired service members, active service members, and members of their immediate families, anyone the lender qualifies to take over the loan can assume it. In general, this means that the buyer needs to have a credit score of at least 580 and a debt-to-income ratio of 45 percent. The buyer and seller must also have at least 12 months without any missed payments. Finally, the person assuming the loan must also occupy the property and the buyer must be willing to take over the terms of the original loan.

Should I Assume A VA Loan?

Assuming a VA loan could be right for you because you can access a lower interest rate and potentially save thousands of dollars on closing costs and expenses if you do not have to take out a second mortgage. On the other hand, this also means that you might need to put more money down to compensate the seller for his or her equity. 

 

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Should you buy right now?

What’s your financial THEORY?

The most common question I get asked no matter what the market is doing is “Should I buy right now?” The answer isn’t simple. Most of my responses to this are either questions or lawyer speak. What are you trying to accomplish. What are your short term and long term goals. How do your reserves look? Do you think we are headed into a recession? What is your threshold for risk? What is your financial theory?

The list can go on and on and on. Am I able to provide you with some insight to what the markets are doing and what are some possible short term outcomes with rates and financial industries? Absolutely. But as you’ve heard 100 times, I don’t have a crystal ball and the best I can do is give you some insight to what has historically happened in the past. The fact of the matter is it is going to come down to your financial theory. How do you manage your budget? Are you willing to make some sacrifices? Do you think that we are headed towards a recession and do you believe that recession will slow inflation which will in turn slow and/or reduce interest rates.

The simplest answer is do your homework, ask a ton of questions and don’t rely on one source for your information to make this kind of decision. You should be talking to financial people, you should be reading the news on all sides of the table. You should try to get your hands on historical data to show you trends of what happens in this economic scene. There isn’t a simple answer and rarely is there an answer that is perfectly clear. Go in with your eyes wide open, recognize the possible pitfalls and make sure you have a safety net. There’s always areas in the market for opportunity but you have to find them and do the work.

This is my favorite part of what I do, call me and let’s discuss!

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How Do You Actually Write The Check To Buy A House?

How Do You Actually Write The Check To Buy A House?After you have found the right house to meet your needs, you need to make the down payment to complete the transaction. Can you show up at the closing table with a suitcase full of cash? Of course, that would be a bit suspect, so that is not actually how it happens. What do you need to do to actually hand over the funds to buy the house? 

The Down Payment Is Verified Beforehand

First, understand that the down payment is usually verified before you agree to the deal. Your real estate agent will work with you and the seller’s agent to ensure that you actually have the funds needed to buy the house. For example, you might need to send screenshots of your bank balance or investment portfolio as proof that you have the money. Your agent will work with you to ensure your confidential information remains so.

The Funds Are Typically Given Using A Wire Transfer

When it is time for you to complete the actual transaction, the real estate attorney will handle just about everything. The attorney will be responsible for collecting the money from the sale and ensuring that everyone gets the money they are owed. The attorney will provide you with the account information for where you need to wire the money. Prior to the closing date, you need to go to the bank and work with one of their experts to ensure the money is in your account and wired to the correct account destination.

The Real Estate Agent Will Confirm The Process Is Done

It is best not to wait until the last minute to wire the money into the account. Try to do this process ahead of time, and make sure either the attorney or your real estate agent says that the process has been completed. You do not want to run the risk of missing your closing date. If you have questions about the process, make sure you give the attorney’s office plenty of time to respond to you.

Determine Your Budget With The Help Of Your Real Estate Agent

This process is important for making sure you can afford the house you want. Work with your real estate agent to ensure you have the necessary funds for the down payment.

 

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What’s Ahead For Mortgage Rates This Week – January 17, 2023

What's Ahead For Mortgage Rates This Week - January 17, 2023

Last week’s financial reporting was dominated by readings on inflation. Weekly reports on mortgage rates and jobless claims were also released and Treasury Secretary Janet Yellen cautioned lawmakers that the debt ceiling must be raised or eliminated.

Inflation slows in December

Month-to-month inflation slowed by -0.1 percent in December and matched analysts’ expectations. This was the first slowing of inflation since the pandemic and the highest inflation reading since inflation reached its highest level in 40 years. Inflation rose by 0.1 percent in November. Year-over-year inflation rose by 6.5 percent, which matched expectations, and fell short of the November reading of 7.1 percent inflation.

Consumer prices fell for the sixth consecutive month in December. Core inflation, which excludes volatile food and fuel sectors, rose by 0.3 percent in December and matched analysts’ expectations. Slowing inflation is expected, but the  Federal Reserve has signaled its intention to continue raising its target interest rate range.

The University of Michigan projected that inflation will rise by 4.00 percent year-over-year in January as compared to December’s reading of 4.4 percent and the 40-year peak rate of  9.1 percent posted last summer.

Treasury Secretary: U.S. debt limit is looming

Treasury Secretary Janet Yellen announced that the U.S. debt ceiling is approaching and encouraged lawmakers to either raise or eliminate the debt ceiling to avoid the U.S. defaulting on its obligations. Ms. Yellen wrote in a letter to U.S. lawmakers, “While Treasury is not currently able to estimate how long extraordinary measures will enable us to continue to pay the government’s obligations, it’s unlikely that cash and extraordinary measures would be exhausted before early June.”

Ms. Yellen emphasized that increasing or removing the debt ceiling would not result in additional spending, but would allow the government to continue financing existing obligations made by lawmakers and Presidents of both parties. Secretary Yellen cautioned that failure to address the debt ceiling would “cause irreparable harm to the U.S. economy, the livelihoods of all Americans, and global financial stability.”

Mortgage Rates, Jobless Claims

Freddie Mac reported lower mortgage rates last week as the average rate for 30-year fixed-rate mortgages fell by 15 basis points to 6.33 percent. The average rate for 15-year fixed-rate mortgages fell by 21 basis points to 5.52 percent.

205,000 new jobless claims were filed last week, which fell short of projections for 210,000 initial claims filed and the previous week’s reading of 206,000 first-time claims filed. 1.63 million continuing jobless claims were filed as compared to the previous week’s reading of 1.70 million ongoing claims filed.

What’s Ahead

This week’s scheduled economic reports include readings from the National Association of Home Builders on housing markets, readings on housing starts, and building permits issued.

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Have you unplugged yet?

Are there benefits to setting limits for Electronics in your house?

Recently my wife and I noticed a frustrating pattern of what can only be called addiction in our boys when it comes to electronics. This means video games, television, phone apps, internet and social media. We started to notice that the boys had a lower tolerance for attention span, shorter tempers and lacked a general ability to be creative especially when it came to boredom. The hardest part of this realization is that we realized it wasn’t just the boys. It was us too.

Enough was enough so we instituted a complete ban on most apps on their phones. This created a situation where if they wanted to search the web, play games or use youtube they had to ask. We also instituted a ban on TV and Electronics in the entire household until 7PM at night. It has been difficult to say the least to manage these guidelines in the home and at times it’s most difficult on myself. There are moments where you just want to relax and distract the mind with low brow entertainment.

This has been going on in our house for more than a month now and I have to say the results are nothing short of amazing. They aren’t all good all the time but it’s worth the effort. Our boys now have realized they have hobbies again, they have interests and they are pursuing them. We play board games, go on family walks and spend more time talking and cooking together. The hardest part came on Monday earlier this week. Our oldest went on a walk with me and explained that being at school has become difficult without the distraction of his phone because he’s the only one. I felt bad but in a lot of ways I felt justified and it only solidified my belief that where your mind goes shouldn’t be controlled or distracted so thoroughly by anyone or anything beyond your own interests. The most interesting part was he acknowledged that a lot of the kids at his school seemed like zombies because they were never not on their phones. He sees it too!!

I’m not saying that our new reality is perfect or even that it’s right for you. Life isn’t easy, it’s not meant to be easy and where you spend your attention and your time shouldn’t be zoned out. Go dream, unplug and start doing! Don’t watch other people live their lives as a way to live yours! Are there benefits, yes. I think there are a lifetime of benefits that we have yet to even realize.

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In a Hurry to Buy a Home? Speed Your Mortgage Approval up by Following This Checklist

In a Hurry to Buy a Home? Speed Your Mortgage Approval up by Following This ChecklistHave you finally found your dream home after months of searching, only to discover that the seller has received other offers? Few circumstances can raise your stress level as much as finding yourself in a bidding war against another buyer. However, being unprepared by not having your finances in order can make the situation even worse. Let’s take a quick look at a few ways that you can speed up your mortgage approval if you are in a hurry to buy your next home.

Pull Your Credit Report ASAP

The first step you will want to do is check your credit report so you have an idea what your mortgage lender will be seeing. You can get a free copy from the major credit reporting agencies up to once per year, so take advantage. There are scams out there, so be sure to only request a report from a government-approved credit agency.

Get All Of Your Paperwork Ready Before You Go In

You will want to gather up as much financial documentation as you can before heading in to meet with your mortgage advisor. Pay stubs, tax forms, and bank statements are all going to be required to prove that you are accurately reporting your current financial situation. You will also want to be able to provide reasons for any substantial loans or other transactions that have taken place in the past couple of years.

Share It All And Keep No Secrets

If you want your mortgage approval to come back quickly, it’s best to be truthful and hold nothing back during the application process. If you lie or try to gloss over areas that you feel are a bit negative, it can end up delaying your approval. Be straight with your advisor and don’t keep any secrets from them.

Work With A Professional Team

Last but not least, if you want the fastest possible mortgage approval you will want to work with a professional team. An experienced mortgage advisor knows the ins-and-outs of the mortgage marketplace. They know which lenders will be able to process quickly and which tend to be on the slower side. If you try to borrow a mortgage from a bank or large lender, you are tied into their process which may not be as quick as you would like.

When you’re ready to buy a home, give us a call. Our mortgage team is happy to help you secure your financing, no matter how much of a hurry you might be in. We look forward to assisting you!

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We Need Your Help!

No one gets where they want to go ALONE

As we continue to shift our focus away from automated content and shift back to the type of content that is interesting, helpful and hopefully captivating it can be difficult to know all “the things”, as my wife would say. The plan with the blog moving forward is going to touch on daily things, mental ramblings and many other things that are not mortgage and/or real estate. We want to still provide valid and updated information to help you with all things mortgage and real estate. These items will be sprinkled into this blog but to ensure we are hitting on the items that are important to you, we are asking you tell us what you want to get more information on. What are things you want to learn, myths you want us to verify or dispell, products, programs, credit… tell us what you want to know so we can start to work towards a more viable blog that better suits the needs of the people we serve.

I know, everyone and every company is vying for your eyeballs and attention. We aren’t different but we want to do it in a way that is organic and gives you some semblance of control in the information we provide. It can be difficult, at times, to make sound decisions on the information we put in the world because we are in this industry. Help us by giving us your outside perspective and push us forward as we continue to grow and learn how to best help you.

Please send any topics, questions or anything else you want to see us write about even if it’s not mortgage or real estate related and we will put it on the calendar to get that out to you and the world! Thanks Everyone!

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House Poor: What It Means And How To Avoid It

House Poor: What It Means And How To Avoid ItThere is a good chance you have heard someone described as being house poor. What exactly does it mean? It is important to understand what it means to be house poor and how you can stay away from it.

House Poor Means Spending A Significant Chunk Of Your Income On Housing

Being house-poor means different things for different people. In general, it means spending a significant amount of your monthly income on recurring expenses related to your house. A few examples include your mortgage, the interest on your mortgage, your property taxes, and HOA expenses. Owning a house can be expensive, and it is important for you to budget carefully. In general, you could not spend more than one-third of your monthly pay on your rent or your mortgage. If you are spending significantly more than this recommendation, you might qualify as house-poor. 

How To Avoid Becoming House-Poor

Fortunately, there are several strategies you can follow if you want to avoid becoming house-poor. First, make sure you budget ahead of time. Understand exactly how much money you can spend on your home, and make every effort to stick to that number. Furthermore, before you purchase a house, make sure you get a home inspection completed. There are a lot of people who have their savings wiped out by unforeseen expenses. If you get an inspection before you buy a house, you can plan for those ahead of time. Finally, make sure you reduce your debt-to-income ratio before you buy a house. That way, you can qualify for the best home loan possible.

Do Not Spend More On Housing Than You Can Afford

In the end, it is critical for you to avoid spending more money on your house than you can afford. Remember that you should not spend more than one-third of your monthly pay on housing. If you do, your budget may be stretched thin and other areas, and you might have a difficult time covering other expenses. Do not hesitate to reach out to an expert who can help you find the right house for yourself and your family.

 

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House Poor: What It Means And How To Avoid It

House Poor: What It Means And How To Avoid ItThere is a good chance you have heard someone described as being house poor. What exactly does it mean? It is important to understand what it means to be house poor and how you can stay away from it.

House Poor Means Spending A Significant Chunk Of Your Income On Housing

Being house-poor means different things for different people. In general, it means spending a significant amount of your monthly income on recurring expenses related to your house. A few examples include your mortgage, the interest on your mortgage, your property taxes, and HOA expenses. Owning a house can be expensive, and it is important for you to budget carefully. In general, you could not spend more than one-third of your monthly pay on your rent or your mortgage. If you are spending significantly more than this recommendation, you might qualify as house-poor. 

How To Avoid Becoming House-Poor

Fortunately, there are several strategies you can follow if you want to avoid becoming house-poor. First, make sure you budget ahead of time. Understand exactly how much money you can spend on your home, and make every effort to stick to that number. Furthermore, before you purchase a house, make sure you get a home inspection completed. There are a lot of people who have their savings wiped out by unforeseen expenses. If you get an inspection before you buy a house, you can plan for those ahead of time. Finally, make sure you reduce your debt-to-income ratio before you buy a house. That way, you can qualify for the best home loan possible.

Do Not Spend More On Housing Than You Can Afford

In the end, it is critical for you to avoid spending more money on your house than you can afford. Remember that you should not spend more than one-third of your monthly pay on housing. If you do, your budget may be stretched thin and other areas, and you might have a difficult time covering other expenses. Do not hesitate to reach out to an expert who can help you find the right house for yourself and your family.

 

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Fear of Cancellation

How Much Risk is Too Much Risk?

It goes without saying that I don’t have the kind of popularity or market share to truly have a concern for cancellation of any sort of real scale. However, I can only imagine that I’m not alone in feeling like I have some things to say. I’m not looking to say them in a way for any reason other than feeling like a perspective based in consideration, curiosity and growth is no more dangerous than any other ideology.

I have for years wanted to write a book. The plan for the book is one of an extended term as it is going to take a long time to accomplish it with the type of truth and depth that I see for it. That idea has morphed and changed over time. No less than a year ago I wanted to finish the book and push it forward but have grown to realize that if it’s going to be what I need it to be I had to stop and allow it ferment and evolve through the life experiences that I’m pushing towards.

In the meantime with the new plan for the book I needed an outlet for these thoughts and feelings. I’m torn. I want this to be the place as it can serve multiple purposes. I can have an outlet to put thoughts into the world and it can, at minimum, provide a place to vent and release data in my brain to allow for new ones and evolutions of old ones. It can help me grow my business and help my family reach the goals we have for ourselves. I know to my core that my work is based on relationships and genuine relationships are not only easier but they are more fruitful. The problem exists though that there is anxiety over how I speak and how I think.

Is that going to cause issues for me in my work? If you’ve done business with me then you will disagree with that. Being myself has allowed for growth I could have never imagined. I want to write in the same way I speak and think. I’m not fearful of whether or not what I have to say is ethical or considerate or would actually be creating waves of negativity. However, our culture doesn’t exactly operate in this manner of common sense right now. Is the necessity of having a voice that is truly your own worth possibly risking a career and life that you’ve been working on… well, all your life? Hopefully that answer will come to light in working through this process.

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