Current mortgage rate trends are improving. Weekly jobless claims were higher than anticipated meaning that investors moved their money from stocks to bonds which caused mortgage rates to drop.
Bad news for the economy usually means lower mortgage rates and good economic news usually means mortgage rates will rise. This is because investors feel like they will make more money investing in mortgages rather than stocks when there are signs that the economy is in trouble.
If you want to buy a home or refinance into a lower rate or shorter loan term now is a good time because rates will start to climb higher in the near future. We specialize in purchase loans, jumbo and FHA loans.
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How to Shop Mortgage Rates
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Current mortgage rate trends remained flat today. The next two weeks will be volatile so if you are closing a loan I recommend that you lock your rate. If you have more time to close then I would float because bad economic news will usually cause mortgage rates to drop.
The economic news that might cause short term mortgage rates to drop are: There is increasing speculation that the recovery is faltering. The US dollar is collapsing for the 16th time against the Euro and the Fed is keeping rates low.
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How to Shop Mortgage Rates
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What does it mean to be “Eligible” for a VA Guaranteed home loan?
Eligibility means the veteran applying for the loan meets the basic criteria of appropriate length and character of service to utilize the home loan benefit.
What does VA Entitlement mean?
Entitlement is the amount a veteran may have available for a guaranty on a loan. However an eligible veteran must still meet credit and income standards in order to qualify for a VA-guaranteed loan.
Entitlementis the amount available for use on a loan. The amount of available basic entitlement is $36,000. This may be less if a veteran has used entitlement before which hasn't been restored. The amount of basic entitlement will be displayed near the center of the Certificate of Eligibility (COE).
What is a Certificate Of Eligibility?
A Certificate Of Eligibility or “COE”, is a form provided by the Veterans Administration that proves the Veteran is eligible for a VA Guaranteed Loan and the amount of Guarantee. We order these for our Veteran Borrowers. However a Veteran borrower can print a copy of the COE form by clicking here.
The veterans administration will insure mortgage loans which allow Veterans to purchase a home with no down payment and refinance an existing home. As long as the veteran meets the VA guidelines for eligibility and the property meets VA eligibility the VA loan is a great benefit for our service members to enjoy home ownership with no down payment and no monthly mortgage insurance premium.
The VA charges an up front fee called a "Funding Fee" unless a veteran receives VA benefits for a service related disability. The Funding fee is collected by the VA and placed into a fund which is used to pay lenders for losses incurred by veteran home owners who lose their property to foreclosure. Think of it as a one time mortgage insurance policy payment.
The amount of the funding fee varies. Here is a table of what the VA charges based on service. Some Veterans are exempt from paying the funding fee. To see if you qualify for the exemption ready Chapter 8, page 17 item B for specifics.
Note:The funding fee for ALL subsequent use loans closed on or after October 1, 2006, and before October 1, 2007, is 3.35 percent.This applies to all purchase loans where no down payment of 5 percent or more is made as well as cash-out refinances where the fee would have been 3.3 percent.Effective October 1, 2007, the subsequent use fee reverts back to 3.3 percent.
The VA restricts fees that a veteran borrower can pay. These prohibited fees include:
No more than a 1% flat fee to cover all lender costs
Attorneys fees
Brokerage Fees
Prepayment Penalties
HUD/FHA Inspection Fees for Builders
The fees a veteran borrower may or may not pay are very specific. You can get more information by visiting VA lender guide, Chapter 8.
Property condition is very important to VA. Make sure to read the minimum property requirements by visiting VA lender guide, Chapter 12
Navigating the rules of VA loans can be difficult even for seasoned loan officers. Be sure to speak with a loan officer that knows and understands VA guidelines. Feel free to contact us with any questions.
