5 Things You didn't Know about VA Loans
Did you know that there are currently over 21 million veterans in the United States? America’s Veterans served for our country and we owe it to them to offer this earned VA benefit program. When it comes to benefits, it’s one that’s greatly deserved. I should know, I am a veteran. I have used my VA home loan benefit as a veteran borrower and have originated VA loans for eligible VA borrowers. Now as a Mortgage Wholesale Account Executive, I work for one of the nation’s largest VA loan servicers who extensively supports our country’s veteran community.
No Down Payment Required
With post-collapse home prices back on the rise, and housing inventory in some parts of the country still below healthy real estate market levels, saving for a down payment for the purchase of a home can be a bit daunting. This is especially true for VA eligible borrowers who may have been recently discharged from the military. With about 90% of VA homebuyers purchasing homes with nothing down, the VA homebuyer put themselves in a position to purchase sooner rather than later. The benefit to the Originator? A closed loan now!
No Mortgage Insurance
Unlike FHA mortgages and high LTV agency products, VA loans do not have a mortgage insurance premium. While VA loans do have a VA “Funding Fee,” this is usually added to the loan amount upfront (only). VA eligible borrowers who have a service-connected disability are exempt from the funding fee. Do the math! In most cases, if you comparatively calculate a VA loan PITI against a comparable FHA and FNMA/FHLMC loan, the resulting full payment amount of the VA loan may surprise you.
Limits on Closing Costs
Closing costs payable by the veteran are limited by regulation to a specific list of items. These fee items are called “allowable fees” and are determined as reasonable and customary by each local VA office. All other costs in the transaction are considered non-allowable and may generally be paid by a seller, the lender via a lender credit, a Realtor or any other party. A few lenders, as is the case with Quicken Loans Mortgage Services, the lender pays the non-allowable charges without a corresponding rate adjustment.
Closing costs cannot be financed in the loan except on certain refinancing loans.
More Lenient Credit Requirements.
While credit profile standards are a significant factor among all of the available mortgage products, VA lending generally offers a slightly relaxed set of credit score limits. VA lenders are typically looking for a FICO score of approximately 620, generally around 100 points lower than what buyers will need for typical conventional financing. Moreover, while access to mortgage credit is thawing somewhat, it’s still tough for many veterans and military families to build the credit profile necessary for conventional financing. For those would-be buyers, the program continues to fulfill its original mission and is quickly becoming the “go-to” mortgage option of choice for our Veterans.
So, gone are the days when only those Originators who happened to do business in a community that had a military base nearby were the only ones who became experts in VA mortgage lending. With America’s nearly three decades of military engagement in the global theater, our Military Service Members are serving their country and the moving back home to Hometown, USA all over the country giving all Originators an opportunity to serve them.
So, let’s do just that, lets become a VA lending expert in support of our Military Veterans.
The Federal National Mortgage Association (FNMA), more commonly known as Fannie Mae, is a government-sponsored enterprise (GSE) that was founded during the Great Depression. The goal of the agency was to expand the secondary mortgage market through the use of mortgage-backed securities (MBS).
The agency allows lenders to reinvest the money they acquired by lending it to others. This effectively multiplies the number of credible lenders in the mortgage market. Clients are now free from relying too heavily on locally-based savings and loans associations, also known as thrifts.
Studying for Service
Being a lender in today’s confusing financial landscape is a task that can prove too much for most people. This is the reason every member of our team spent years studying and learning both the theories and practice of financial lending and management. We will take all of the stress of the process away from our clients, so they can focus on managing what to do with the funds once acquired.
Our goal, as a Fannie Mae multifamily correspondent lender, is to ensure that the loans get approval rapidly and efficiently. We do this by ensuring that all the loan requirements are met.
The People Who Need It
Our team specializes in providing multifamily loans, which means that we support borrowers and investors who need financing for projects that provide housing for middle income American families. These projects include apartment complexes and student housing, as well as hospitals and senior care centers.
We have made it our mission to expedite the approval process as efficiently and conveniently as possible for our clients. These projects should be first to get funding and should be kept moving as often as possible. As a Fannie Mae multifamily correspondent lender, we want all qualified borrowers of Utah to have access to services that can give them the assurance that their projects will move forward.
We take our work seriously, as we understand that there are people who depend on such projects to get the funding it needs. Every member of our team will do everything in their power to ensure that the loan gets funded in the soonest possible time..