financing

The basics – VA Home Loans | from homeloanninjas.com

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The VA home loan has helped many of our country’s Veterans achieve the American Dream that they have served to protect, and for that reason we absolutely LOVE IT! The qualifying factors and underwriting guidelines are just a little different than that of an FHA or Conventional home loan, though.

As we said in the video, current members of the Armed Forces, those who have been honorably discharged, National Guard/Reserve members with 6 years of service, as well as unmarried surviving spouses of Veterans qualify for the VA home loan. We have a lot of those folks in Oregon & Washington, and as a result many of the homes for sale here are amenable to VA financing.

Another reason to love the VA home loan is that there are built-in safeguards for our Veterans, such as a limit on the fees that can be charged directly to the Veteran, and property criteria designed to ensure that no major home repair expenses are incurred by the Veteran after buying the house.

Put these reasons together with the fact that there are no monthly mortgage insurance premiums, and you have a spectacular loan program that takes care of those who take care of us. Thanks to all of our Veterans out there, and if you have any questions about VA financing, or home loans in general, remember we are here to help! Visit our website, sign up for email or rss updates, or hit us up on Facebook or Twitter.

Thoughts on the New Mortgage Insurance Premium for FHA loans – by Jason Hillard | homeloanninjas.com

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(originally posted on October 2nd, 2010)

I have had this rolling around in my head for a few weeks now, and with the change in FHA mortgage insurance monthly premiums bearing down on us in a few days, I had to share my thoughts. We’ve been doing a lot of FHA loans in Oregon & Washington, as I’m sure is the case all around the country, and this change is going to affect a lot of people. (I apologize for the low quality of the video, I have successfully screwed my phone’s camera up!)

Again, everything that’s changing about the mortgage industry is done under the auspices of avoiding another meltdown, curbing foreclosures, and making the mortgage-backed security a good investment. So, if you have an insurance policy which is designed to avert the risk of a loan in default to the lender, why would you want the premium on that insurance policy to be collected over time?

From a simple risk-assessment perspective, it would seem that the more time you are exposed to loss, the greater the likelihood that it will happen. The fear is that homeowners will default on their loan payments, so why would you push more of the premium to the monthly payment side (rather than the upfront funding fee) if the reason for the policy is to protect the investor from people who default on those payments?

It seems like the reasonable position would be to get the premium covered from day one. This reminds me of when the downpayment requirement for FHA went from 3% all the way up to a whopping 3.5 per cent. Does that extra .5% really invest the homeowner so much more that it reduces their likelihood of default? I’m not saying their should be less “skin in the game”, but if that’s going to be your approach, why not really DO IT? Make the downpayment 5%, or make some portion of the upfront mortgage insurance on an FHA home loan payable from the borrower’s own funds?

It may just be that I am making the age-old mistake of applying logic to government policy, but I am thinking that the intended purpose isn’t really what we are being told.

You can read some related posts on FHA loans and mortgage insurance:

What is mortgage insurance?

We can do FHA down to 580 FICO, but should we?

Video: mortgage terminology – mortgage insurance

If you have any questions about FHA financing, mortgage insurance, or home loans in general, feel free to send us an email or comment on this post! And if you have any thoughts on why the monthly mortgage insurance premiums for FHA mortgages are increasing while the upfront funding fee is decreasing, we’d love to hear them!

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