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VA Home Buyers Education Seminar This seminar is designed to provide you education and knowledge on how to invest in yourselves and put equity into your.

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Presentation on theme: "VA Home Buyers Education Seminar This seminar is designed to provide you education and knowledge on how to invest in yourselves and put equity into your."— Presentation transcript:

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2 VA Home Buyers Education Seminar This seminar is designed to provide you education and knowledge on how to invest in yourselves and put equity into your future and above all, just to have a lot of fun today. VA Military Mortgage

3 First, we believe every military service member and spouse, whether active duty, veteran, or reservist should be aware of their entitlement to a VA home loan. Furthermore, interested service members should have access to a knowledgeable VA loan officer and specialist to educate them and guide them through the VA home loan process. VA M ilitary Mortgage Mission Statement

4 GI Bill of Rights of 1944 The VA loan began in 1944 through the original Servicemen’s Readjustment Act, also known as the GI Bill of Rights. The GI Bill was signed into law by President Franklin D. Roosevelt and provided veterans with a federally guaranteed home with no down payment. This feature was designed to provide housing and assistance for veterans and their families and the dream of home ownership became a reality for millions of veterans and active duty soldiers.

5 VA Guaranteed Loans These loans are made by private lenders, such as banks, credit unions, or mortgage companies to eligible veterans and active duty soldiers for the purchase of a home, which must be for their own personal occupancy.

6 Service Eligibility If you are now on active duty, you are eligible after having served on continuous active status for at least 90 days. Peacetime requirements are 181 days. The guarantee means that the lender is protected if you fail to repay the loan. The guarantee replaces the protection the lender normally receives by requiring a down payment. Maximum loan amount of $417,000.00

7 Prepayment Options Right to prepay WITHOUT penalty (lenders may require that any partial prepayments be in the amount of at least 1 monthly installment of principal or $100, whichever is less).

8 No Foreign Properties The property must be located in the United States, its territories, or possessions. The latter consist of Puerto Rico, Guam, Virgin Islands, American Samoa, and Northern Mariana Islands.

9 Certificate of Eligibility VA determines your eligibility. Requests for a VA Certificate of Eligibility (COE) requires you must complete VA Form It can be pulled online with a VA preferred lender while on active duty or with DD214 after discharge.

10 Funding Fee A VA funding fee of 2.15% of the loan amount (2.75% for reservists) is payable at the time of closing. The VA funding fee for 2 nd, 3 rd, etc. is 3.35% This fee will be included in the loan and paid from the loan proceeds.

11 Credit Requirements The VA loan underwriter will analyze a borrowers credit in order to determine approval. VA Home Loan approval is not completely driven by credit score but focuses on the borrower’s timely payments and credit history over the past 12 months.

12 No or Limited Credit History? If the borrower and/or co-borrower have limited or no credit history (as determined by a credit report) then satisfactory payment history must be established, usually on 3 trade lines. Trade-lines include: utilities, telephone bills, and rental history.

13 Rent Vs. Own $100, Payment & Investment Considerations VA M ilitary Mortgage

14 Favorable Way “Buying” Buying vs. Renting Average Monthly Payment Savings $ Total Gain Over 5 Years $32,881.04

15 Payment Considerations RentOwn Initial Rent Payment $ Renter’s Insurance $30.00 Mortgage Payment $ Property Taxes $ Home Owner’s Insurance $25.00 Before Tax Monthly Payments $930.00$ Annual Home Maintenance $500.00

16 Payment Considerations Continued RentOwn Total Payment Over 5 Years $60,296.28$56, Total Tax Savings Over 5 Years $14, Average After Tax Monthly Payment $1,004.94$712.91

17 Investment Considerations Home Selling Price After 5 Years $121, Minus Loans Balance ($93,610.81) Minus Costs to Sell ($7,229.92) Minus Down Payment & Initial Closing Costs With Unearned Interest ($5,395.40) Investment Gain of Buying vs. Renting $15, Total Payment Savings of Buying vs. Renting $17, Combined Gain of Buying vs. Renting $32,881.04

18 Veteran’s Administrations Programs Texas Veterans Land Board VA Purchase Program VA Cash-Out Refinance Program VA IRRRL Loan Program VA M ilitary Mortgage

19 VA Purchase Program 100 % financing up to the conforming loan limit* No Monthly MI No front ratio Up to 41% back & end ratio on a manual underwrite No minimum credit score More leniency on derogatory credit Seller contributions allowed up to 4% Owner occupied property only * Loan amount must include the Funding Fee and veteran must have sufficient entitlement

20 VA IRRRL Loan Program Used to pay off the existing VA loan plus any allowable closing costs Must decrease the interest rate and P&I unless going ARM to fixed or decreasing the term No appraisal required

21 My Community 100% 100% Financing No Prepayment penalty Minimum 575 credit score Reduced Monthly MI with homebuyers class 30 year fixed rate Step below VA

22 Texas Veterans Land Board Housing Assistance How the Housing Assistance Program Works VA Military Mortgage

23 How the Housing Assistance Program Works The Veterans Housing Association Program (VHAP) provides financing up to $325,000 toward the purchase of a home to qualified Texas veterans. Loans for $45,000 or less are originated through the Texas Veterans Land Board’s (TVLB) direct loan program.

24 How the Housing Assistance Program Works There is no maximum sales price with the VHAP; however, the TVLB can only loan up to $325k towards the purchase. The VHAP must be originated in conjunction with Federal Housing Administration (FHA), Veterans Administration (VA), or conventional financing. Loans over $45k must be originated by a participating lender.

25 How the Housing Assistance Program Works The VHAP is not a refinancing program. If you have an existing loan on your home, you cannot use the VHAP to lower your interest rate, nor can the VHAP be used as a down payment on a home. It can only be used as a first lien on your primary residence. The term of the loan can be 15, 20, 25 or 30 years.

26 How the Housing Assistance Program Works VHAP loans typically require an escrow account to be set up for taxes and insurance. Cosigners and guarantors may be accepted on the veteran’s behalf if the veteran has sufficient income to qualify for at least 60% of the monthly payments on the mortgage loan, including taxes and insurance.

27 How the Housing Assistance Program Works Two married, eligible veterans may have only one active VHAP loan at one time All TVLB loans are subject to credit approval

28 Additional Interest Rate Discounts 15 Year Term.250% Veterans With Disability.350% Qualified Service Era1.06%

29 VA Military Mortgage Presents: Good Credit Happens

30 How It Works Studies show that most credit reports have inaccuracies that may affect your credit score. It's your right to demand the most accurate credit reports possible, and to benefit from the improved credit score which results from correction. If your credit reports are not corrected and restored, any misinformation on your accounts can cause you to pay higher interest rates on everything from credit cards to home mortgages or vehicle loans.

31 Prove it or Remove it ! Helping clients use the laws to improve their credit is a core Good Credit Happens service. Any negative accounts on your credit reports that you do not recognize or are inaccurate should be disputed and removed. The removal of such information can increase your credit score significantly.

32 What We Do That said deciphering and choosing what information should be challenged could be difficult and not immediately obvious. Each "negative" on a credit report interacts with and may consist of multiple accounts and details and cleaning up the details can mean the difference between sub-prime credit and an accurate, optimized credit profile and an increase in the scores.


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