VA Loan Updates

The rules of money have dramatically changed, yet we are still financing today’s home with yesterday’s mortgage. When I started in the mortgage industry 30 years ago you could only obtain a conventional mortgage or a government mortgage (FHA or VA). Both products were fixed rate mortgages and the majority of the loans were for 30 years.

If you are thinking of purchasing real estate for your home, investment or as a second home you owe it to your self to speak with a mortgage planner before you look at property and before you get your pre-approval. Consider a session with a mortgage planner as a important first step in the home buying or home financing process. After a session with a mortgage planner will be armed with knowledge and ready to shop for your real estate with peace of mind and financial confidence.

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When selecting a mortgage, there are many things to think about and wonder about. For anyone that is looking for a way to secure the best loan for their next or first home, they should weigh all of their options, carefully deciding what the right way to go is. With so many different types of mortgages out there, though, this can be relatively difficult for you to do. Take a moment, then, to find the best way to get your mortgage to fit within your life.

Here are some of the mortgage options that you have and you should carefully consider before purchasing your home.

New Timers: If this is your first home loan, you have the advantage in many ways. First of all, you may qualify for a government backed loan. The FHA loan is a commonly used loan that allows for the lenders to offer better interest rates and lower fees. It can help any new homeowner to actually secure the home that they want even when their credit is not that great. This federal government will help to back these loans for you, giving you more of an option in funding it. Also, there are many benefits offered to first time home buyers throughout the states from various cities. Find out if your city offers any benefits to moving here.

The Down Payment: When it comes to having a down payment or not, many of those that bought homes twenty or more years ago, did so with large down payments. Today, many people are buying them without any. Which is the right way to go? If you do not have the funds set aside for a down payment on your home, you should still consider purchasing one. If you do have the funds to put down on a home, do it. This can greatly reduce the amount of money that will need to be financed which means less interest payments on it as well. Carefully consider the amortization schedules that you can get before signing a mortgage to determine if it is a better choice all around.

VA Loans: If you have served in the armed forces of the US, you may qualify for a VA loan. These will allow an individual to secure a loan with federally backed funds. It can help to lower the cost of the home’s interest rate too. If you are applying for a mortgage with a home lender, make sure to tell them of this status as it can greatly help you.

With so many options, it pays to do your homework. The good news is that there are tools called loan calculators that you can use to help you to see what your monthly payment will be as well as how much your home will end up costing you with various options like these. Use them and see what the best solution for your needs is. This can be done easily and within seconds right on the web. Also, always ask your mortgage lender to inform you of any and all options that you may qualify for with your home loan.

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I have been assisting in the demobilization of reserve units that have been serving in Iraq and with every group, I get the same question about education benefits. Active-duty service members who established eligibility for education benefits under the Montgomery GI Bill have 10 years from discharge to use those benefits.Reservists who established eligibility from active-duty service and have been activated for federal service for at least 90 consecutive days have a new 10-year eligibility to use those benefits. There are no new benefits, only whatever remains from the 36 full-time months that were earned.

Q. I am retired from the military and I was just awarded 40 percent disability from the VA. Part of my rating (30 percent) was from combat. How do I apply for Combat Related Special Compensation and how will that be paid?

A. This office can assist you in filing for CRSC. Bring a copy of your retirement DD214 and your VA award letter. If you received a Purple Heart, the orders for that award will help.

The VA will pay you for the 40 percent disability.

Currently, 40 percent compensation for a veteran with one dependent is $539 per month, tax-free. That amount will be subtracted from your retired pay. Your CRSC would be paid by the service and currently be $377 per month, also tax-free.

The bottom line is that you will be getting $916 per month tax-free and pay taxes only on your remaining retired pay.

Q. My service-connected disability became more severe, and the VA increased my compensation. I applied for VA Disability Insurance and was denied. Can you explain?

A. When a veteran receives a disability rating, there is a two-year window to apply for disability insurance. The description of the program is in the VA award letter that establishes compensation.

An increase of a previously rated condition does not establish a new two-year window for application. Also, the veteran must be in otherwise good health except for service-connected disabilities.

You would have to have a compensable rating for a new condition to be able to receive disability insurance.

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VA guaranteed loans are for eligible Wisconsin and Illinois veterans for the purchase or refinance of a home which must be for their own personal occupancy. To get a loan, a veteran must apply to a lender. If the loan is approved, VA will guarantee a portion of it to the lender. This guaranty protects the lender against loss up to the amount guaranteed and allows a veteran to obtain favorable financing terms.

Lenders will generally limit VA loans to $417,000 This is because lenders sell VA loans in the secondary market, which currently places a $417,000 limit on the loans. For loans up to this amount, it is usually possible for qualified veterans to obtain no down payment financing.

A veteran’s basic entitlement is $36,000 (or up to $104,250 for certain loans over $144,000). Lenders will generally loan up to 4 times a veteran’s available entitlement without a down payment, provided the veteran is income and credit qualified and the property appraises for the asking price.

Wisconsin VA Loan Highlights:

* VA 3/1 Treasury ARM offers loans to veterans with:
* Affordable interest rates
* A fixed rate for the first 36 months

* Fixed rate loans also available and very competitive

* Various property types including: Owner-Occupied (1-4 unit) principal dwellings
and Single-family, owner-occupied units in Condos & PUDs

* No minimum loan amounts

* Up to 100% financing available on purchases (Federal only. State VA loans require 5%     down) subject to available entitlement

* Funding fees are required - please contact us for details

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If you are on active duty ( there are time constraints) or are retired military, the chances are good that you qualify for a VA loan. There are different types of housing loans, such as Conventional, FHA (Federal Housing Administration) and VA loans. It’s a good idea to research the different types of loans before you dive in. The basic aim of VA loans is to help veterans finance buying a house. The largest benefit of VA loans is you don’t need a down payment, and very little cash to move in. A more complete reference for processing VA loans is the Lender’s Handbook, VA Pamphlet 26-7, available on the Internet at www.va.gov The biggest advantage of using VA loans is that borrowers can finance the purchase of a home with no money down. This can be a great help when you consider all the expenses that are associated with buying and moving into a new home. One of the most common myths about VA loans is that once you use your VA loan you can never use it again. This is simply not true. If you have an existing VA loan, you must clear it to make yourself eligible for another VA loan. This is a common practice when you sell you house make sure that you clear the loan so that you are eligible for the next one. Another perk to VA Loans is the reduced closing costs, origination fees, and appraisal fees that lenders are allowed to charge. When an appraisal is done on a property, the lenders are bound by that amount. If for some reason you agree to pay more than the appraised amount, the additional money would have to come out of your own pocket. Why would anyone want to pay more than the appraised amount? An example might be something like this. You are talking to a seller and have agreed on a price pending a VA appraisal. The appraisal comes in five thousand below the agreed upon price. You still want the property and they want to sell it to you but not at the VA price. You compromise and agree to split the difference and pay them an additional twenty-five hundred dollars. That money would come out of you pocket. The only catch with VA loans is that you must be a military veteran to qualify. While, one of the biggest selling points for VA loans is that there are usually no down payments required. The funding fee for VA loans is waived for veterans who have a service connected disability of 10 % or more.. One of the greatest benefits of VA loans is the low interest rates. Getting the VA loans is completely devoid of hassles and legalities, which makes the loan more accessible.

VA loans are generally the best choice for veterans who are planning to purchase a new home or refinance an existing home mortgage. More than 29 million veterans and service personnel are eligible to receive VA loans. You may also want to visit the Veterans Administration web site http://www.va.gov Veterans can apply for pre-qualification online or check their eligibility for VA loans within minutes. VA FINANCING - A GOOD DEAL FOR VETERANS. Department of Veterans Affairs home loans — VA loans for short — are a popular option with home buyers. The Veterans Benefits Act, signed recently, has raised the VA loan limits to allow more Veterans and individuals on Active Duty to qualify for VA Loans. Veterans are allowed to refinance their existing mortgages from conventional or FHA loans to VA loans. But if you’re one of those veterans who thought they could never be approved for a loan on a home, VA loans can make it happen where nothing else could. This program helps veterans obtain mortgages by protecting the lender against loss. Check with your local Veterans Administration for details or go to VA Loan Tips.com.(http://www.valoantips.com)

To summarize, The basic aim of VA loans is to help veterans finance buying a house. On the other side of the coin, one potential downside to a VA loans is the guarantee amount. The guaranteed amount is higher than ever so the guaranteed amount should not be a problem. The largest benefit of VA loans is you don’t need a down payment, and very little cash to move in. The main source of information about processing VA loans is contained in VA Pamphlet 26-7, VA Lender’s Handbook. One of the most common myths about VA loans is that once you use your VA loan you can never use it again. As we said earlier, this is not true, you just have to clear the previous one. Another perk to VA loans is the reduced closing costs, origination fees, and appraisal fees that lenders are allowed to charge. The funding fee for VA loans is waived for veterans who have a service. Connected disability of 10 % or more. Getting the VA Loan is completely devoid of hassles and legalities, which makes the loan more accessible. If you are a veteran, this is one of the best deals there is. This and the GI Bill for education, but that’s a different story for another day.
http://www.valoantips.com

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Mortgage foreclosure can occur if homeowners, who have taken a VA, conventional loan, or an FHA insured loan, default on the mortgage payments. Foreclosure can lead to the lender gaining possession of a borrower’s home. If the value of the home is less than the mortgage amount, the homeowner may have to pay the balance amount to the lender under a deficiency judgment. Foreclosures have a negative impact on the credit score of a home owner.

In order to avoid foreclosure, there are several things that a homeowner can do. These include communicating to the lender one’s inability in making payments as soon as possible and requesting assistance. If necessary, homeowners should back their communication with relevant financial figures such as expenses and income from various sources. They should not abandon their premises or they may not qualify for the assistance.

There are several housing counseling agencies approved by the U.S Department of Housing and Urban Development; they offer up-to-date information on the various programs initiated by government and private organizations that are designed to help homeowners facing the prospects of foreclosure. Housing counseling agencies, which also provide credit counseling services, provide their services at no cost.

In order to avoid forbearance, homeowners can try and apply for Special Forbearance. This may lead to a revision of the repayment schedule and in some cases the payment may either be revised or suspended. A rise in expenditure and a fall in the monthly income may enable homeowners to qualify for a new monthly plan. Similarly, mortgage modification may result in extension of the period of repayment and may open up refinancing options. Homeowners who have undergone a financial crisis stand to benefit from mortgage modification as they can chart out a more manageable repayment plan.

Homeowners can also take recourse to a deed-in-lieu of foreclosure. This entails voluntarily handing over the property to the lender. Such a deed does not hurt a homeowner’s credit rating as much as a foreclosure. A homeowner, who is a defaulter on payments, and does not qualify for other alternatives, has not been able to sell the house, and is not in default with respect to other mortgages, qualifies for a deed-in-lieu of foreclosure.

A homeowner’s qualification for any of the above mentioned alternatives is determined by the lender. However, homeowners should be aware of solutions that are not genuine. It is highly advisable to take the help of housing counseling agencies in such matters. Homeowners in financial difficulties are liable to fall prey to scams such as equity skimming in which a homeowner is tricked into signing the deed of the property to another person. There are several counseling agencies that are not genuine and often charge homeowners for services that can be done for free. It is imperative that homeowners check the background of the counseling agency before deciding to go with a particular firm.

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Washington, DC (HNN) - On the eve of Veterans Day and just days following an election battle cry for better representation, Rep. Nick Rahall, D-WV, called for the new Congressional Leadership to act quickly on the New GI Bill of Rights for the 21st Century, which Democrats have introduced in Congress.

“The American people have sent a strong signal to our government that they want, and our servicemen and women deserve, a clearer vision for our future abroad and at home,” Rahall said on Thursday, Nov. 9. “Democrats stand ready to move forward with Republicans on providing all the support our veterans and military retirees have earned.”

In 1944, Congress enacted the original GI Bill of Rights, to honor the Greatest Generation-providing returning troops with educational benefits, loans to buy a home, and medical assistance. And in each major military conflict since, the sacrifices of service members and veterans have been recognized through an improved GI bill.

“With our veteran population growing every day, it is important that we have a new GI bill that meets the needs of our new veterans returning from Iraq and Afghanistan, while continuing to honor the heroes that came before them,” Rahall said.

The New GI Bill is a comprehensive package of benefits that would be provided to troops, veterans and their families. It would provide veterans with the benefits they deserve like affordable health care, education and job training, strengthen our support for our men and women in uniform and improve benefits for our National Guard/Reservists.

It will also repeal unfair tax burdens like the Military Families Tax and the Disabled Veterans’ Tax, which forces veterans to pay $1 from their pension for every $1 of disability pay they receive.

“Our veterans, as our soldiers today, remain foremost in the thoughts and minds of West Virginians, and remain a top priority of the new Congressional majority,” Rahall said. “The soldier pledges to leave no man behind, and we will leave no veteran behind.”

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Question: President Bush declared Hawaii a disaster area due to the earthquake. What does this mean for my VA home loan if my residence is damaged?

Answer: You should contact your mortgage company as soon as possible regarding your loss. You are not excused from making your regular loan payments even if your home is not habitable. You should discuss forbearance or possible extension or modification of your loan with the mortgage company if you are unable to make your payments on time. File insurance claims as soon as possible. However, do not make a hasty settlement on insurance. Attempt to get the city engineer’s office to make an inspection for structural damage, when the property is damaged but repairable. If a city engineer is not obtainable, an inspection by a licensed professional engineer should be obtained before agreeing to an insurance loss settlement. You need to begin the disaster application process by calling FEMA’s toll free number, (800) 621-3362. You must register with FEMA. You cannot obtain assistance for uninsured losses or damages to your home from the Small Business Administration or any other disaster recovery agency if you have not registered with FEMA. If you are receiving a monthly benefit check from VA or another source, and you will not be able to receive mail at your regular address, notify your local post office and VA of your change of address. You can contact the VA at (800) 827-1000. If you are experiencing difficulties, talk to a VA loan service representative by calling the same number. You can also visit the VA Web site at www.homeloans.va.gov

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NEW HAVEN — After being activated twice by the U.S. Army Reserve and serving in Iraq, John Deluz came home expecting to take advantage of the G.I. Bill as a student at Southern Connecticut State University.

But when Deluz decided to exercise his right to leave the Reserve, having fulfilled his minimum commitment of six years, he said his military superiors told him, “All of your education benefits cease as soon as you’re no longer on active (weekend) drilling.”

Meanwhile, Jack Mordente, SCSU’s director of veterans’ affairs, said he discovered that Deluz and thousands of others in his situation actually are entitled to have G.I. Bill benefits pay for their education.

Mordente studied a 2005 law enacting new G.I. Bill benefits that makes National Guard and Reserve members who return from war eligible for education payments similar to active duty troops.

Mordente, who is president of the National Association of Veterans Program Administrators, said he learned in May that many returning troops were getting wrong information about educational benefits to which they are entitled.

“My colleagues from other colleges around the country are reporting similar situations,” Mordente said.

Through discussions with Department of Veterans Affairs officials in Washington, Mordente said he confirmed these returning veterans could revert back to the original Reserve G.I. Bill. They can then use their remaining entitlement from that law for the number of months they were activated, plus four more months. Multiple periods of activation can be added together.

“State and unit-level military leaders and school veterans’ counselors don’t know the facts because the VA and the Department of Defense have not made the legal rights of these war veterans widely known,” Mordente said.

As a result of Mordente’s discovery, the VA changed its Web site to reflect correct information. But he maintained the Department of Defense has remained silent.

Keith Wilson, director of VA Education, said Monday that Mordente’s information was correct, which is why the Web site added the information.

“There’s probably never enough we can do to make people aware of the entire range of benefits they’re entitled to,” Wilson said. “We’re always trying to make people as aware as possible.” But he added, “We can do a better job of explaining in better detail.”

Wilson encouraged veterans to call 1-888-GI Bill 1 or visit the VA Web site: www.gibill.va.gov.

Bob Clark, assistant secretary of defense, deferred comment to the department’s office of public information spokesman, who did not return a call Monday.

Deluz, 25, of New Haven, said he was in the U.S. Army Reserve when he was activated in October 2001. He said he spent about a year stationed in this country.

Deluz was again activated in February 2003 and went to Kuwait and then Iraq. His obligation ended in December 2003.

But since he returned to SCSU, Deluz has paid about $4,000 per year in tuition and administration fees, with the state paying about $3,000 of that total. He has paid his own books and supplies costs, which he said the G.I. Bill should have covered, as well as tuition.

Now that Mordente has contacted Deluz and helped him with the detailed paperwork, Deluz said he should receive $10,000 or more in deferred compensation.

Asked how he feels about what he went through, Deluz said, “I’m very disappointed. This is another example in which programs for veterans are not being given to them, or are reluctantly given. We gave our service freely.”

“When I joined (the Reserve), they said they’d pay for my college,” Deluz noted. “I got cheated out of the bargain.”

He said he has worked two jobs for 34 months, paying tuition and his expenses.

“I felt let down,” he said. “I felt unimportant. It’s like they said, ‘You did your service, now go away.’”

Rick Scavetta of North Branford, who had enlisted with the U.S. Army Reserve, then went on active duty with the U.S. Army in Afghanistan, said he believes veterans in Deluz’ situation often are “given false information” about educational benefit entitlements because, “It keeps a unit deployed; they keep drilling.”

Scavetta added, “If it’s happening to a few of us here, it’s probably happening to thousands across the country.”

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“Over Here: How the G.I. Bill Transformed the American Dream”

The last time Edward Humes wrote about the U.S. military, the year was 1989. Then a newspaper reporter at the Orange County Register in Southern California, Humes showed the link between fatal military helicopter crashes and faulty night-vision devices known by the Pentagon to operate poorly despite their huge pricetag.

Now, Humes has written a very different book involving the U.S. military, one more historical in nature, and largely upbeat.

“Over Here” is about the post-World War II G.I. Bill, one of the most remarkable social engineering efforts in U.S. history. It opens with a typical veteran, Allan Howerton, trying to find his place in American society after fighting the Nazis. Howerton, who had been hustling fast-food hamburgers in Rahway, N.J., before being sent to Europe, feels the crush of veterans returning to the United States by the hundreds of thousands.

Rather than allow this crush to crush his spirit, Howerton decided to enroll in college to earn a degree while sorting out his employment options. As he exits a crowded, creaky trolley car in an unfamiliar city, he sees a sign confirming he has reached his destination. University of Denver, the sign reads. Howerton enrolls for freshman classes — and his life, like the lives of millions of other veterans, is changed forever.

The G.I. Bill that helped World War II veterans readjust to civilian life after 1945 is one of the rare laws “everybody knows about.” But Humes’ expansive account of how the G.I. Bill changed American society in expected and unexpected ways demonstrates that what “everybody knows” is not even the half of it.

Officially called the Servicemen’s Readjustment Act, the law allowed millions of men and women to buy homes that would have been beyond their means; attend colleges by paying tuitions they could never have afforded; and receive increasingly expensive, sophisticated health care.

Instead of focusing on Congress, the White House, the Pentagon and the courts, Humes moves away from the institutional saga to emphasize how the G.I. Bill altered the lives of specific individuals — like Howerton at the University of Denver.

The human dramas scattered throughout the narrative are irresistible. Humes’ handful of real-life protagonists invent sophisticated weapons for use in the Cold War, populate suburbs in tract homes that alter the urban-rural equation, become beloved physicians and teachers and film directors — all because the G.I. Bill provided otherwise unimaginable opportunities.

Humes leavens the upbeat chapters with a case study of a female veteran who faces obstacles receiving the benefits legally due to her, and a black veteran who must overcome even greater obstacles placed there by power brokers who failed to learn the lesson that all are equal on the battlefield. Veterans returning from the Civil War, World War I, Korea, Vietnam and the Persian Gulf did not fare as well across the board; the historical context provided by Humes makes the success of the G.I. Bill all the more poignant on this Veteran’s Day week.

What about Howerton at the University of Denver? As Humes notes, Howerton’s college experience “was as much about healing as it was about learning, as much about getting over being a G.I. as it was about using the G.I. Bill.”

Of the 200 men in Howerton’s combat division, 42 died under fire. “When he came home and found his way to Denver, he considered himself blessed, hale and hearty. In truth, he would later realize, he was ‘torn up inside.’ It took time for that to change.”

Howerton became involved in political campaigns while earning a bachelor’s degree in international relations. He then worked for United Airlines; earned a master’s degree; found a job in Washington, D.C., with a federal bureaucracy; married; and fathered three children.

Some authors overstate the importance of their topics, but Humes provides ample evidence for statements such as this: “If the bill’s transformation of college in America from an elite bastion to a virtual entitlement proved revolutionary, its home-loan provisions were nothing short of radical.”

The book will provide nostalgia for the World War II generation, and a well-rounded education for readers born later.

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