FHA Loan

If you served in our nation’s armed forces, and are considering the purchase of a home, costs just got cheaper last week.  On November 18, 2011, the Veterans Administration reduced the funding fee, which is the amount it charges veteran home buyers, to guaranty the mortgage.  VA home loans allow for no down payment and low down payment mortgages, with no privsate mortgage insurance (PMI).  Rather, the VA charges a one-time funding fee, and allows for that funding fee to be financed, to insure the loan.

First-time VA home loan users, purchasing with no money down, used to pay 2.15%; that was reduced to 1.4%.  Subsequent VA home loan users, purchasing with no money down will now pay 2.8%, down from 3.3%.

Some frequently asked questions:

Can you use your VA loan guaranty benefit more than once?

Of course you can.  The VA even allows for two outstanding loans (under certain circumstances) but generally, veterans can only have one VA loan outstanding.  A common misunderstanding is that a veteran can only use a VA loan once.  The benefit can be used as many times as the veteran wishes.

Can you still get a zero-down VA home loan, again?

Indeed you can.  The funding fee is higher and you generally can’t have more than one VA mortgage outstanding but you can qualify for a VA-insured, no money down home loan, again.

Can you lower the funding fee if you use a down payment?

Yes you can.  If veteran home buyers put 5% down, with a VA loan, the funding fee drops to .75% for active duty veterans (1.0% for reservists and guardsmen).  For a 10% down payment, the funding fee drops to .5% for active-duty veterans and .75% for reservists and guardsmen.

A full chart of the new VA funding fee schedule is available on Brian Brady’s Mortgage Rates Report.  Please direct any and all questions via telephone to (858)-777-9751

The rates are too high. They take too much time. My Realtor says that product sucks.

No, No and No. FHA 203K along with it’s conventional renovation cousins; Fannie Mae HomePath and HomeStyle are leading a renaissance in today’s mortgage and real estate market. Buyers (and the smart Realtors) are learning and appreciating the huge value these renovation loan products are adding to our foreclosure driven real estate market.

How are they doing it? What’s the big deal?

You’ll see. Follow along with these 10 simple ways Renovation Loans can help you (and your neighbors TOO)  benefit from the foreclosure driven real estate market!

1.) Opening the Pool of Potential Homes

Are you an FHA buyer? No doubt you are seeing homes listed as “CASH ONLY”  for the offer. With a FHA 203K Renovation Loan you can finance the purchase of a home that was previously only available to CASH buyers.

2.) Easier Neighborhood Selection

Want to live in that ONE particular NEIGHBORHOOD, but can’t AFFORD to live there AND get the house you want? You can NOW! Buy the cheapest house on the block, renovate it yourself (rather than paying an investor a 20% profit) and enjoy.

3.) Less Deferred Maintenance Post-Close

Stuff breaks, especially if that stuff was used when you bought it (I’m talking to you 15 year old HVAC). The average homeowner spends $7,000 – $20,000 in the 1st 18 months of ownership. Why? Because stuff breaks. Replace that tired AC & that water guzzling H2O heater UPFRONT as part of the loan and you can avoid the huge repair bills later.

4.) Maximize a Property’s Potential

Renovation Loans are based on AFTER REPAIR VALUE. Basing the loan on what the house will be worth once the renovations are complete allows for more room to RENOVATE and unleash the homes potential.

5.) Renovate GREEN, Save MONEY

If you are going to upgrade, repair and replace why not make the renovations as ENERGY EFFICIENT as possible? You’ll save MONEY every single month you own the home. GREEN / Energy Efficient homes also have a better resale value.

6.) Get a House in the right SCHOOL ZONE

For the parents out here getting their kids in the right school zone is one of, if not the, most important factor in their house hunt. With the ability to shop for fixer-upper and renovate it yourself you can AFFORD MORE home. The home price BARRIERS are lowered for some of the best and typically most expensive neighborhoods (hint, the ones with the best schools).

7.) Improve the WHOLE Neighborhood

When you RENOVATE a home it has an affect on not only that home, but the homes that surround that home. Come one, do your neighbors a favor already.

9.) Allows MORE Seller’s to SELL

Selling, but don’t have the money to fix your home up first? Small items can cause homes to NOT be eligible for traditional FHA financing.  That eliminates HUGE pools of potential buyers. Market the home with a RENOVATION LOAN and let the buyer do the repairs they way they want.

10.) Making the Mortgage Interest Tax Deduction Work for You

When you wrap your renovations up in your mortgage you increase your mortgage interest tax deduction. If you pay for the renovations later on a credit card not only do you NOT get any TAX BENEFIT, you also pay higher interest rates. Lower rates and a tax deduction sounds like a solid to me.

Those are just 10 of the myriad of ways renovation loans provide value. There are many, many more reasons why the savvy home buyer knows FHA 203K, Fannie Mae HomePath & HomeStyle Renovation loans are some of the BEST products on the market!

Wanna know more? Easy, visit our RENOVATION ADVISOR, spent 2 minutes completing the form and go have lunch (or dinner or afternoon snack). We’ll be with you shortly for a full consultation.