Hope everyone got to celebrate July the 4th this week. You’re on the Real Estate Mortgage Shoppe program. I’m your host, Jo Garner, mortgage professional with Evolve Bank and Trust. We’re still celebrating the Independence Day this morning. Don and Holly Swogger of Homevestors will be talking about “Veteran Benefits, VA Mortgages and The West Tennessee Veterans Home Project.”
Our co-hosts today are Don and Holly Swogger of Homevestors. Holly is president of the Memphis Investor Group and she and Don are heading up the West Tennessee Veterans Home project. You guys have been on television, at Talk Shoppe and other places talking about the new project.
We definitely want to take care of our military veterans and their families. Today we want to talk about some veteran benefits and some advantages of being a vet when you need a mortgage to purchase a home.
Prices on homes have been increasing across the country and in parts of the Memphis area too. Mortgage rates have climbing at record breaking rates moving over a half point in the last five weeks. Yesterday the 30 yr fixed rate for a conventional loan went up like a shot out of a cannon hitting around 4.875% with no points. FHA and VA 30 yr fixed rates ended around 4.5% to 4.75% on the fixed rate 30 yr mortgage program. The 15 yr conventional fixed rate closed yesterday around 3.875% to 4%.
The reason for the rate surge is because of healthier economic reports like the employment report, payroll numbers, increasing housing prices and number of sales. When the Federal Reserve announced they would gradually quit buying mortgage-backed securities, it seemed like everyone suddenly wanted to pack up and leave the party too. This forced the bond yields up to attract more buyers, sending mortgage rates soaring higher too. Due to the economic data backing the rate surge, it looks at the moment unlikely rates will dip down very much for a while. Here’s the good news—historically speaking –rates are still great and there are plenty of opportunities to purchase a home in a market that is now improving. You could potentially walk into quite a bit of equity that could keep increasing creating for you some wealth.
If you know your comfort level on a maximum house payment and amount of money down you are comfortable paying, then you’re ready to talk to a mortgage officer to see what home price and terms you can afford. Don’t miss the boat. If the deal works for you today, do it today.
Eligible military veterans or their surviving spouses can buy a primary residence for zero down if the sellers agree to pay the buyer’s closing costs and taxes and insurance. Tennessee Housing Development Agency has a special program for Veterans to get them a lower than market rate. The program is called Home Of The Brave.
Nothing down is a great deal on other loans too and not just for veterans. Some loan programs that can help you get in for zero down or for very little down — USDA Rural Housing loans for homes in the less populated areas. The Tennessee Housing Development Agency Great Start down payment assistance program will sometimes allow homebuyers to get in for zero down if the seller is paying all of the closing cost and prepaid taxes and insurance.
If you’re a real estate investor and you want to buy a rental property without using your own money, call me directly off the air at 901 482 0354. That number again is (901) 482-0354 or catch my assistant Susan Belew and me on the blog www.mortgageloansblog.com We can help you find sources to use for the down payment to help you acquire more property without using your own funds.
There’s still some refinancing going on especially for people wanting to pull cash out to pay off other debts or invest in other areas. Call me and looks at scenarios. We can find out what works best you. If we don’t have the rate for you today, we can register you on our Rate Watch program and contact you when and if the rate comes back. That number again to reach me off the air is 901 482 0354. Or catch me on my blog www.mortgageloansblog.com
Today we are talking about “Veteran Benefits, VA Mortgages and Shelby County Veteran Home Project.” Holly and Don Swogger are in the studio around the coffee table this morning. Holly is a licensed realtor and also president of the Memphis Investors Group. Both Don and Holly own the Homevestor franchise in Memphis. More importantly they are spearheading the efforts to raise support to build a 144-bed West Tennessee Veterans Home so veterans and their families in this area can take advantage of having their loved ones nearby. Don and Holly, tell us about this awesome project.
Questions answered by Don and Holly Swogger:
1. The State Veterans Home is a non-profit effort and I know you guys are dedicating your time and resources to help make this happen for our vets. How did you get involved?
2. How are getting funds to build this facility? How much money do you need?
3. How can other people help you get the Veteran’s Home off the ground?
4. How will the West Tennessee Veteran’s Home benefit the surrounding community?
Questions answered by Jo Garner
1. What are the advantages of using Veteran Administration home loan as compared to other loans?
A. The biggest advantage of the VA loan over the FHA government loan is that the VA loan does not require the veteran to pay monthly mortgage insurance, saving them tens of thousands of dollars over the life of the loan.
Let’s compare two different home buying experiences:
GI Jane returns home from Afghanistan and is ready to buy a house, marry her sweetheart and start a family. The house price is $100,000. GI Jane uses the Veteran Loan with the sellers paying all of her costs. Her Principal and Interest payment on a 30 yr fixed rate 4.5% is $518/mo taxes and insurance is $250/mo . Since there is no mortgage insurance required, her total payment is about $768/mo. The VA loan is a 100% loan and since the seller paid the costs, GI Jane gets into the home for $zero down
Down the street on the same day, College-grad Carl is not a military veteran but is just getting into his career in Information Technology. He has a great future but not a lot of upfront money so he uses the government FHA loan. He also buys a house for $100,000 and the seller agrees to pay his costs also. BUT FHA requires a 3.5% down payment and Carl doesn’t qualify for down payment assistance. So his move in costs at closing is about $3,500. His payment is very different than GI Jane’s because there is monthly mortgage insurance for the life of the loan. The rate is the same 4.5% on the 30 yr fixed rate. His principal and interest payment is about $498/mo with taxes and insurance the same as Jane’s at about $250/mo but the monthly mortgage insurance is around $109/mo making his total payment $89/mo more than Jane’s
2. On the VA loan, what is the difference between the terms the first time someone uses their VA mortgage compared to using it again and again?
3. Funding fee VA less than 5% down first timers 2.15%
4. 5% or more but less than 10% 1.5%
5. 10% or more 1.25%
6. Subsequent use
7. Less than 5% 3.30%
8. 5% or more but less than 10% 1.5%
9. 10 percent or more down 1.25%
The first time GI Jane used her VA eligibility to purchase a home, the upfront funding fee was only 2.15% of the base loan amount. She bought the house for $100,000 with nothing down so her funding fee added to the loan was $2,150. Let’s say she had just sold that house and is now buying a new house for $100,000. Now it’s the SECOND time she’s used her VA eligibility to buy a home. Her funding fee added to the base loan amount is 3.30% or $3,300. That’s $1,150 more on the funding fee for the $100,000 house.
1. How do veteran’s get their eligibility papers updated? What if they can’t find their VA papers?
Real Estate Tip of the Week
You may know someone who always waits until the last minute to do something –just to keep life exciting—may that’s YOU. When it comes to getting your mortgage closed right now, you don’t want to be wait until the boat is leaving dock to make your running leap to board.
In this rising mortgage rate environment, don’t miss the boat! It is urgent that you get your mortgage closed before your mortgage rate lock agreement expires. Here’s a tip to the wise: When the lender ask you for documentation, get it to them in 24 hours and not over 48 hours.
Right up front, go ahead and submit all pages of your tax returns so the lender can calculate into your income-to-debt ratios any losses from other businesses or unreimbursed employee expenses. If you own over 25% of a business, go ahead and turn in all pages of the business returns, including the K-1s. If there is income in there somewhere, I can find it.
If you are getting an appraisal on the property don’t delay the appraiser getting in to see the property. If you have credit issues to resolve, do it yesterday.
Common documents the lender will request up front are: Latest paystubs, W2s, ALL PAGES of latest bank statements and other asset account statements, legible copy of your drivers license and all pages of your latest tax returns.
Jo makes two announcements: Talk Shoppe offers free education and networking for anyone interested in real estate or business every Wednesday from 9A to 10A at DeVry University 6401 Poplar 6th floor across from International Paper. This Wednesday Attorney Wis Laughlin will be talking about “Revocable Living Trust—Freeing Your Family From The Cost And Care Of Probate” for more info about Talk Shoppe go to www.TalkShoppe.BIZ
Next Saturday on the Real Estate Mortgage Shoppe program Tom King of King and Vaughen Consulting will be talking about how to lower your real estate taxes the easy way right here on News Radio 600 WREC.
If you have suggestions on topics or ideas on how you can help us improve This show—The Real Estate Mortgage Shoppe right here on News Radio 600, let us know your ideas and suggestions. For this podcast and past podcasts go to www.mortgageloansblog.com
Transitional songs: “Come To America” Neil Diamond; “America: Why I Love Her” by John Wayne; “God Bless The USA” by Lee Greenwood.
Jo Garner’s Bio
www.MortgageLoansBlog.com www.MoneyShoppe.NET (901) 482 0354 jogarner@mindspring.com
Jo Garner is a mortgage officer with extensive knowledge in tailoring mortgages to her customers who are refinancing or purchasing homes all over the country. She offers conventional, FHA, VA or other loan programs for refinancing and purchases.
Jo can help you look at rent vs buy, when it makes sense to refinance, how to get the best deal on your home purchase financing.
Jo Garner has been in the real estate/financing business for over 20 years. She got her start in Portland, Maine where she first began her real estate career. She received her real estate education from the University of Southern Maine and was personally mentored in San Diego, California by Robert G. Allen, author of Nothing Down, Creating Wealth and The Challenge.
On moving back to West Tennessee in 1987, she went into business buying and selling discounted owner-financed notes secured on real estate. In 1990 Jo went to work for a residential mortgage company and has been a mortgage loan officer for over 17 years. Her goal is to offer excellent, affordable service to her customers, tailoring the loan programs to the specific needs of her clients.
In addition to her work in the mortgage field, Jo Garner is the primary sponsor and founder of Talk Shoppe in Memphis. www.TalkShoppe.BIZ She was also the editor of Power Shoppe, a free weekly ezine designed for real estate professionals and others indirectly connected to the real estate industry and currently publishes on her blog www.MortgageLoansBlog.com .
For real estate financing solutions, plug into the Real Estate Mortgage Shoppe program. You can find mortgage rates, FHA Streamline refinance with no out-of-pocket costs, refinancing options, home purchase loan programs, answers and real estate, money-saving tips and more.