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thegoinggreenboutiqueMany people who are eligible for Veteran's Affairs (VA) loans do not take advantage of them when they buy or refinance their homes. There are retired veterans who don't realize that mortgage refinancing to a VA loan from their conventional loan was even an option.
If you have a conventional mortgage, it may be to your advantage to refinance to a VA mortgage if you qualify. You can begin by running some numbers at HSH.com's refinance calculator to see what your potential savings will be. With the drop in property values over the past several years, borrowers who have little equity or negative equity can benefit from refinancing with VA loans because they do not have as many pricing adjustments for property type, FICO, LTV, etc. The VA also made changes in 2008 to assist a substantial number of veterans with subprime mortgages to refinance into a safer, more affordable, VA guaranteed loan.
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nikcnameMortgage fees are rising for all home loan borrowers in the US, including even those with good credit ratings. Fannie and Freedie are raising risk fees for the first time since 2009. To avoid a fee or get a discount, most borrowers will need a FICO score of 740 or better and down payments as high as 25% or more. While the risk fees are being charged directly to lenders, they are not expected to absorb these costs and instead pass them on to borrowers within days.
The increases will affect most loans with longer than 15-year terms starting in the March-April period. The fees amount to a few hundred dollars more on an average house price of $200000, but increase quickly from there as the credit score of the borrower decreases. Freddie and Fannie say the changes are intended to more accurately reflect changing risks in the housing market.
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woodleywonderworksMortgage rates are historically low right now, but are still not proving beneficial to several first-time home-buyers. Only those home-buyers who can pay 20% to 30% of a home's value upfront are benefiting from low mortgage rates. Those with an inability to pay even 10% as down payment are finding an additional 1% to 1.5% tacked onto their mortgage rates.
Center for Responsible Lending (CRL) views this getting back to the way mortgage rates were prepared before the economy crash down as a mistake and suggests that low down payment home loans must stay. CRL says that high down payment requirements will only materially shrink the mortgage market with minuscule increase in loan performance, whereas low down payment loans will help the nation's housing market and economy to recover from the earlier crash.
Presently, Nevada has the highest negative equity percentage with 65% of its borrowers owing more in mortgages than what their homes are worth. Arizona (51%), Florida (47%), Michigan (36%) and California (32%) follow pace.