How to Refinance Your VA Home Loan

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refinancing va loanVA loan is an alternative for men and woman who have served in the military. Qualifying spouses of military personnel can also use these loans. Refinancing can help those who have fallen on hard times. Refinancing is where you can rewrite your loan and throw out the other. It usually lowers the interest term and rate, which lowers the monthly amount you need to pay. If you or your spouse was military personnel, you have three options to refinance your home loan. Each of them can help you based on your individual needs.

Streamline Refinance Program

This program will benefit a veteran who already has a loan with the VA. The Streamline Refinance program allows you to reduce your monthly payment or lower the terms of your original loan. The advantages of this program include limited amounts of documentation, no credit checks and no appraisal. However, some lenders may still need you to verify all of these things before refinancing your loan. Another great advantage to this program is the fact that you will be paying a lower funding fee. For this loan, it is usually around five percent. The Streamline Refinance program is the lowest stress refinancing program available.

 

VA Cash-Out Financing

This program is mostly for veterans who have equity in their property. Using this method to refinance could mean that you could get money back from refinancing your loan. Again, this depends on your lender; some do not allow you to do this. This program will still allow you to have lower payments or lower the terms of your original loan document. With the equity already in your property, this could substantially change the amount you have to pay or the duration in which you have to pay for your home loan.

Refinance Your Conventional Loan

This program is best for people who do not have VA loans. The VA considers this a ‘Cash-Out refinance’ but you are unlikely to get any money back when you refinance. However, your money will not go to waste. The equity in your house will make your payments or term of payments that much shorter. One of the biggest advantages is that lenders are more than likely to cover the entire cost of your home loan. Another advantage would be that they would decide the amount of your funding fee based on your eligibility. The fee for this loan is generally between 2.5 and 3.3 percent. You do not have to pay this out-of-pocket. Many lenders will add this to the back of your loan.

Once you have chosen your program, you then need to submit your documentation in order to apply for that particular program. Choosing a program is half of the challenge of refinancing your home loan. While some of the advantages of the program are lender specific, refinancing can help you save money and lower the term of your interest. It is very advantageous to look at all your loan options before deciding on a certain program to use. To ensure that you are getting the best program, it is best to discuss all of your options with your lender.

 


VA Jumbo Loans: Do I Need One For San Diego?

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va jumbo loans

San Diego VA Jumbo Loans

San Diego has one of the most appealing and varied climates in the world. Within an hour’s drive of almost anywhere in the county, you can snow ski, water ski, four-wheel, spelunk, deep sea fish or dive, visit the zoo, museums including the aerospace museum, shop or visit street fairs, visit Mexico, or almost anything else your imagination can conceive.

The combination of climate and activity level make San Diego one of the most popular places to live in the world. For those who have retired, who are just starting out, or who are tired of the cold and snow in other areas, San Diego is the destination of choice for many.

The abundance of activities and the mild climate, as well as its proximity to Mexico, also make it an ideal tourist mecca requiring an abundance of temporary housing. Add an assortment of military bases located in the county and it’s easy to see why housing is at a premium in San Diego. Many military personnel and veterans opt to remain in the area for all the above reasons and more.

Home prices in San Diego are higher than they have been in almost a decade, with the median home price reaching $489,000 at the start of the second quarter of this year. Prices have risen more than 6 percent in the past year and show no sign of stabilization or decline.

 

Although there are home bargains available, they are scarce and therefore snapped up quickly. Particularly in the urban areas, housing costs tend to be higher than in the outlying areas. The somewhat lower price of the outlying areas can be appealing, but the rush hour commute can take hours to complete, which should be thoroughly considered before purchasing a home in a suburban or outlying area.

The VA considers San Diego to be a high cost-of-living area so the maximum guaranteed amount of a regular VA loan is higher than in most other areas, but a veteran may still want to take advantage of the VA jumbo loan if he or she has the working capital available. A jumbo VA loan can enable a veteran to purchase a higher-end home with less money down than a conventional loan would require and at a much better rate.

Jumbo VA loans are not available in all areas. And, while the interest rate for a jumbo may be somewhat higher than for a regular VA loan, it should still be lower than a conventional loan. To calculate the down payment necessary for a jumbo VA loan, first determine the guarantee cap for the area. Next, subtract the difference between the home desired and the amount the VA will guarantee. Twenty-five percent of that difference is the amount that will be needed for a down payment.

For those veterans who can afford a down payment, a VA jumbo loan can enable them to purchase a better home in San Diego than they might otherwise be able to afford. Either way, purchasing a home in San Diego, although expensive, should be a sound investment that will retain its value over time and/or appreciate substantially.


Why Does the Appraisal Process Take So Long in San Diego?

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san diego va loan appraisal processWhen buying or selling a home, an appraisal is usually a necessary step of the process. In years past, appraisers would often perform inspections on multiple homes in a single day. Add another day to complete the report and the appraisal could be finished in a couple of days. However, times have changed and buyers and sellers who expect the real estate appraisal process to sail through without a hitch often get a surprise.

In San Diego, as well as the rest of the country, the real estate appraisal process changed drastically after the housing-bubble collapse and mortgage catastrophes of 2008-2009. Because of all the new rules and regulations, and tougher appraisal reviews from the lenders wanting additional information, the appraisal process often takes over a week. The appraisal process can take over a month for commercial properties.

How San Diego VA Loan Appraisal Process Works

The appraisal process has three components:

  • An appraiser will physically examine the home.
  • The appraiser will perform a “Comparable Market Analysis,” or a CMA, searching for recent sales of comparable properties in the immediate area of the subject property.

A report is created to justify the property’s value using the CMAs.

The appraisal process typically begins with the appraiser preforming both an exterior and interior inspection, looking at such things as the gross square footage, number of bedrooms and bathrooms, lot size, construction quality, current condition and location as well as amenities like a swimming pool, central AC, fireplaces and recent renovations. The appraiser assesses the buildings in the surrounding area, taking the same features into account. He or she will then confirm the tax data, zoning regulations and other sales in the area, typically getting this information from multiple sources such as public real estate records and Multiple Listing Services. After all of the data has been collected, the appraiser analyzes and adjusts all of the data to make what is called a “Highest & Best Value Analysis” of the property.

Two main issues responsible for slowing down the real-estate appraisal process from the years prior to the housing crisis are: the advent of appraisal-management companies and often seemingly never-ending requests for additional information.

Appraisal-Management Companies

Before the housing crisis, loan officers typically had a favorite go-to-appraiser they would use, but this is no longer the case. Lenders now work with appraisal-management companies to create a firewall between the appraiser and the loan officer who are no longer allowed to speak or have a connection with one another. This was done to, theoretically, eliminate any type of favoritism.

Requests for Traditional Information

Due to the new rules of the “Dodd-Frank Wall Street Reform and Consumer-Protection Act,” loan underwriters are now demanding more information during the appraisal process. While Dodd-Frank was passed to reduce the risks in the financial system, it created additional burdens. Rob Johnson, VP of mortgage company San Diego Funding in California, believes the increase in appraisal reviews is the result of new lender-specific requirements imposed because of the past problems with certain loans. For example, the lender might insist on greater scrutiny of an appraisal if the borrower has a less-than-perfect credit score, a high level of debt relative to income or if the property had been foreclosed and then flipped by an investor.


Why You Need A San Diego VA Loan Specialist

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va loan specialistIf you are a qualifying active duty, military veteran or a surviving military spouse, you may be eligible for a VA loan. There are many great advantages to getting a VA loan as opposed to getting a conventional loan. Most active members of the military, veterans and surviving spouses qualify for VA loans. However, navigating through the process of applying for a loan can be difficult to do on your own. A VA loan specialist knows the process and can assist in providing all the information you’ll need on your path to home ownership. Here are some things a VA loan specialist can help you with:

No Down Payments

As with many traditional loans there usually is a down payment required. A VA loan doesn’t always require a down payment. A San Diego VA Loan Specialist can help you to see if you qualify for this feature.

Credit

Most conventional loans do require a minimum credit score of at least 620 to qualify for a loan. However, a VA loan does not require a minimum credit score to qualify.

Insurance

Another advantage of a VA loan is that it doesn’t require mortgage insurance. With conventional loans, insurance is usually required with a down payment that is typically less than 20 percent.

Fees

There will always be a fee when applying for a loan, whether a conventional or VA loan. However, with a VA loan the fees with a low down payment are considerably lower.

Late Payments

Sometimes people may have trouble making their payments. So, if you find that you are struggling to make payments on your loan, a VA loan specialist can help assist you. The VA will negotiate with their lenders for you on your behalf. They can help borrowers with repayments, modifications to your loan or reach some agreement to avoid foreclosure.

Reusable

As long as you pay off your loans, a VA loan is, in fact, reusable. You can use your entitlement over and over again. Your San Diego VA loan specialist can assist you with all of this.

Bankruptcy or Foreclosure?

As with traditional loans, you need to wait at least two years before you can apply for another loan after filing for bankruptcy. With a VA loan you may apply after only 12 months. Even if a veteran or active duty member has a previous bankruptcy or foreclosure with the VA, they are still eligible to apply with the VA.

Contact A VA Loan Specialist

Opening the door to owning a home and saving you time and money are only two reasons you need the help of a VA loan specialist. The Department of Veteran Affairs has made the dream of home ownership a reality for its service members and their families with great programs available. If you are ready to experience all of the benefits and features of a VA loan, contact a VA loan specialist to see whether or not you qualify. They will provide all of the necessary information, and answer any questions you may have, in order to assist you on your journey to owning a home.


How Much of A VA Loan Can I Get in San Diego?

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san diego va loanOne of the best financing instruments for purchasing a home in the San Diego area is a Veterans Administration loan. There are four different ways you can qualify for a VA loan:

  • Served 90 consecutive days of active service during wartime.
  • Served 181 days of active service during peacetime.
  • If you have more than 6 years of service in the National Guard or Reserves.
  • You are the spouse of a service member who has died in the line of duty or as a result of a service-related disability.

If you qualify, here are some of the benefits of securing a VA Home loan:

  1. No Down Payment Required

With the VA Loan, qualified borrowers can finance 100 percent of the home’s value without putting down a single dollar.

  1. No Private Mortgage Insurance Required

Unlike conventional bank loans where the buyer puts down less than 20%, VA loans do not require insurance payments (PMI) to be added to the mortgage payment each month.

  1. Better Interest Rates

VA loans are guaranteed by the Federal Government. Banks, therefore, have less risk and can offer slightly lower interest rates than on conventional loans.

Securing A VA Loan in the San Diego Area

Houses in San Diego are expensive. The area remains a hot spot in the national real estate market with an average listing price for homes of $599,000 and an average selling price of $475,000.

The latest maximum VA loan limit is $580,750. That places the loan limit below the average listing price for homes in the San Diego area but above the average selling price.

Real estate transactions can be tricky for anyone, especially for first-time buyers or buyers trying to secure a VA loan for the first time. Because of this, it is strongly recommended that buyers secure the services of a qualified VA loan expert.

Before you start shopping for that expert, however, you should check your income level to see if you qualify for a home loan of any kind. Current figures show that to secure a home mortgage of $554,300, the buyer needs a yearly income of $104,486.

 
The need for that level of income can be reduced by purchasing a home at the lower end of the listing scale, of course, especially if you can secure a VA loan at a minimum interest rate and zero down payment.

If your income meets the criteria needed to secure a maximum VA loan in the San Diego area, you can begin looking at houses in the $550,000 range with your agent.

Since San Diego appears to still be in somewhat of a seller’s market, your chances of low-balling a VA offer are probably slim to none. Many sellers don’t want to deal with VA offers because of the most stringent home inspections required and extra closing costs the seller must absorb.

On the other hand, VA buyers come in pre-qualified with a maximum loan number already guaranteed. And with an experienced agent who deals in VA transactions presenting the offer for you, chances are you should be able to find that perfect San Diego home using a VA loan.


Documents Needed for Your VA Loan in San Diego

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san diego va loanFor most borrowers, they view applying for a loan as a daunting task. However, if you know what is required, you will have an easy time. For you to obtain a San Diego VA loan, you need to have with you some documents regarding your personal income and military service.

Documents You Need To Get A San Diego VA Loan

VA loans have lower credit scores and having your income verified is less strict as compared to other conventional loans. However, since the VA loans are some of the benefits that are bestowed upon servicepersons and military veterans, two documents are compulsory to obtain a VA loan and should be presented before closing. As a veteran, you should present the Certificate of Eligibility (COE) and Statement of Service or DD-214.

Certificate of Eligibility

This document is necessary to assure the financier that the borrower has met all the minimum standards to obtain a VA loan. There are two ways that you can acquire your Certificate of Eligibility. The first option is to file to the VA your Form 26-1880. The form requires you to fill in some basic information such as your name, your social security number, and your date of birth.

The other option is to ask your lender to fill the Certificate of Eligibility on your behalf. Some of the approved VA lenders can access these certificates in a matter of a few minutes and it will not cost you anything. Asking a VA-approved lender to fill the COE on your behalf does not mean you can only take a loan from them. The COE is portable and you can choose to work with other lenders.

DD-214

This document contains all the details of your military service history and the terms of separation. This document is required if you served in the military but are not on active duty. Therefore, if you are no longer on duty, you should get the DD-214 after you depart from the armed service.

In case you are a U.S veteran and you cannot find your DD-214, you can get a duplicate from the National Personnel Records Center. In case you are unable to request for the duplicate, your lender can request the document on your behalf.

As an honorable veteran, your VA loan eligibility can never expire.

Statement of Service

If you are still an active service member, you do not need to present the DD-214 because this document is specified for veterans. However, you should provide evidence of your service duty, when you began your active duties and a signature from a senior officer or a senior assistant officer.

The statement of service document will have your full name, your date of birth, your social security number, your branch of service, and your rank. You will also have to indicate your last discharge if any and the type of discharge. In case you are a reservist, you should include a note that explains whether you are still an active reservist or if you are inactive.

Ensure You Write Your Statement Of Service On The Official Letterhead.

These are the most important documents you require for a VA loan and only in rare situations will you be asked to provide additional documents.