The VA loan program was created in 1944 as a way to help veterans and active members of the U.S. military achieve the American Dream of homeownership. As Memorial Day approaches, it's a great time to say thank you to the military veterans or servicemembers in your life by making sure they know about this wonderful opportunity available. After all, these servicemen and women fought for our dreams, and now it's time we help theirs come true. 

A VA loan does not require a down payment or private mortgage insurance.

Main Benefits of a VA Home Loan 

Those who qualify for a VA loan receive a host of benefits that make this line of financing one of the most attractive options out there:

1. A VA loan is offered by private lenders but backed by the U.S. Department of Veterans Affairs. This guarantee makes lenders more willing to approve riskier borrowers, such as those with credit scores that are lower than the ideal range. In addition, the government guarantee often allows the lenders to provide better loan terms, including significantly lower interest rates. 
2. It does not require a down payment. The borrower can receive a loan of up to 100 percent of the home's value. 
3. VA loans are accompanied by an upfront funding fee, but certain borrowers, like those who get disability compensation, don't have to pay it all. Those that do have to pay the fee can wrap it up into the loan rather than pay it as cash at closing. 
4. There are no early-exit fees or prepayment penalties. 
5. It can be used to purchase a wide variety of property types as well as to conduct repairs and renovations. 
6. It can be used to make energy-efficient upgrades.
7. Despite the fact that there is no down payment, borrowers still do not have to pay private mortgage insurance. For a conventional loan, PMI is required for anyone who puts less than 20 percent down. 
8. A VA loan can be refinanced into another VA loan or can help refinance an existing mortgage. 
9. Closing costs tend to be lower than they are for conventional loans.¹ 

?Additional Benefits Based on Location

There are many states that provide extra advantages for those who finance a home with a VA loan. In Maryland, for example, permanently and totally disabled veterans do not have to pay property taxes and retired service members do not have to pay state income taxes for the first $5,000 of their retirement income.

In Arizona, disabled veterans as well as widows and widowers of veterans receive property tax exemptions. In addition, any compensation received by active-duty service members is not subject to income tax for any month the member is paid while on active duty.²

Be sure to do some research to see what additional benefits your state or county might offer. 

Monthly Mortgage Payments: the Basic Allowance for Housing

If you are an active-duty member who is not living in government housing and has been assigned to permanent duty in one of the 50 states, you will also be entitled to receive the Basic Allowance for Housing. Not only can a BAH be used to make your monthly mortgage payments, but it also can be counted as income. This is important because it can raise your income level to help you qualify for the best loan. 

Types of VA Home Loans

There are four main types of VA Home loans: 

1. Purchase Loan - used to purchase a property 
2. Interest Rate Reduction Refinance Loan - used to refinance one VA loan into another 
3. Native American Direct Loan - used to help eligible Native American veterans either obtain low interest rates on a VA loan to purchase a home or fund renovations of properties on Federal Trust Land
4. Adapted Housing Grants - used to purchase, build or renovate a home to accommodate a veteran's disability³

If you are eligible for a VA home loan, you will find yourself with greater flexibility in loan termsand fees, and you will also experience an increased ease in the ability to qualify for a loan. 

Sources

¹The Mortgage Reports
²Chicago Tribune
³U.S. Department of Veterans Affairs 1

When sprucing up your home before a sale, make sure you do not forget about the exterior. It is easy to become preoccupied staging the home's interior and updating key rooms, but failing to think about the curb appeal of your property could cost you. The outside of your home is the first thing people see when they arrive. You only get one chance to make a first impression, which is why a well-maintained exterior can contribute substantially to the value of a home and help it sell faster. 

Even if you are not thinking about selling anytime soon, improving your home's curb appeal can be a good idea. After all, you also have to see the outside of your home every day, and the nicer it looks the more pleased you will be when pulling into your driveway. 

There are many ways to give your home's exterior a fantastic makeover: 

A clean exterior can raise your sale price by $10,000 and $15,000.

1. Clean It 

No one likes to look at dirt and grunge, and it may surprise you to learn that giving the outside of your home a simple clean can make a big difference.

Now, a truly good clean could cost you several hundred dollars if you hire professionals, as you want to make sure every inch of your home's exterior, including the garage doors, is scrubbed and spotless. You can also rent power washers for about $75 per day. This investment can be well worth it. A thoroughly cleaned outside can result in a rise in sale price of between $10,000  and $15,000.¹

2. Upgrade the Hardware 

Your mailbox and house numbers provide great opportunities to get creative and give your home's exterior some extra flare. If either of these appear old or in disarray, it could be a turnoff to buyers, so the first thing you should do is at least make sure they're clean and well put together.

Beyond that, you can make them an integral part of your home's exterior design by coordinating their colors with that of the house, adding some flowers around the mailbox or incorporating some other visually appealing decorative technique.

3. Give it a Fresh Coat of Paint 

Giving your home a fresh paint job is costly, but it can make the property very appealing to homebuyers. If you do decide to repaint, it is best to stick with neutral colors. You want your home to stand out in a good way, and painting it an extremely bright color, especially if it strongly contrasts the house's trim, can accentuate its flaws. It is best to use similar colors for the property's trim and body and also to choose colors found in nature, such as a deep red or muted green.² 

4. Add Lighting 

Lighting is not only a fantastic addition for aesthetic reasons, but it can also be appealing for the extra security it provides. It is hard to feel safe walking through a pitch-black front yard at night, and showing homebuyers they won't have to deal with installing their own front lighting when they move in could help increase interest in your property. 

Use low-voltage landscape lighting to brighten up a walkway, or as accent lighting in the trees. Solar fixtures are a good alternative for those who cannot use lights involving wiring outside, though they tend to have a lower brightness.³

5. Update the Front Door 

As with all other elements of your home's exterior, your first task is to make sure the front door is completely clean. Beyond that, consider replacing it with a custom wood door or even painting it a bold color. You may not want your entire house to stand out with a bold paint job, but giving the door something a little stronger than neutral, perhaps a nice red or blue, could provide your home with just the right amount of pizzazz it needs. 

https://youtu.be/2gsPCmofw5A 

6. Maintain the Lawn 

Your lawn should be well cared for, with healthy green grass and no overgrown plants. Adding a garden is also a great idea. If gardening is not your thing, consider creating a container garden by purchasing plants in ready-made containers that can help you create a garden with ease. 

7. Fix Up the Roof 

Roofs that are not maintained well can cause problems, and buyers will notice if your roof does not look like it has been taken care of. Hire a professional to give it a good clean as well as to replace any damaged or missing shingles. In addition, consider replacing or updating your gutters and downspouts. 

The exterior appearance of a home should be a priority, not an afterthought for sellers, and while there are many more ways to increase curb appeal, these seven options are certainly a great place to start.

The summer of 2016 is shaping up to be one of the best seasons for home loans in years. The average interest rate on a 30-year fixed mortgage is at 3.52 percent as of July 7. That's significantly lower than what could be found just a year ago, and among the lowest rates seen since 2013. In a survey of economists, more than half said they expected average rates to continue falling in the days and weeks ahead.

For homeowners currently paying a mortgage, this is terrific news. For prospective borrowers, it may be even better. Even though many expect interest rates to remain at historically low levels for a while, it's impossible to know for sure. Therefore, frugal mortgage borrowers should be aware that time is of the essence.

What's causing low rates?

Anyone paying attention to the news in the first days of July has probably become very familiar with a recently made-up word: Brexit. The U.K.'s unprecedented decision to leave the European Union sent shockwaves throughout the global economy when the results of the vote were announced June 24. Investors and financial institutions the world over reacted negatively to the vote, not just because it was unexpected, but also from sheer uncertainty. No country has ever left the EU since it was created in 1971, and as one of the biggest players in international finance, the implications of Great Britain's move are still not fully known.

After #Brexit, mortgage rates in the U.S. have approached record lows https://t.co/9y3FagAB0H pic.twitter.com/9BNE6EkWO8

— Bloomberg (@business) July 7, 2016

 

What does this mean for consumers?

Although the stock market took an initial hit from the Brexit decision, most Americans don't need to worry too much about the situation in the short term. In fact, many stand to benefit from the lower interest rates on loans now being seen everywhere.

With the cost of a fixed-rate mortgage now at the lowest level in three years, it makes sense that applications for such products have also risen to their peak in the same timeframe. Much of this is being driven by current homeowners looking to refinance their current mortgage. Indeed, applications for refinancing are now almost double what they were in July 2015.

Clearly, it's in a borrower's best interest to get the best deal possible on their mortgage. But Realtor.com cautions against making big decisions without doing the requisite research. Refinance-seekers should calculate their savings with the up-front refinancing fee in mind. This initial fee can often exceed $2,000.

For those who are in the market for a new home altogether, patience and diligence pays off in the end. A mortgage is a vital financial asset that will stick around for a long time. Although refinancing may be an option down the road, it pays off in the long run to make an informed choice the first time around. By finding a lender you can trust, dealing with one of the most important decisions in life will get a whole lot easier.

You have probably heard that if you want to obtain a loan on anything from a car to house, you will need to have a good credit score, but if you are like many other Americans out there, you probably don't know what exactly characterizes a good score. 

When it comes to home buying, there is unfortunately no magic credit score that will guarantee your approval for a loan. Every lender has different standards, and there are also many other factors that go into determining who is approved and what their loan terms are. Nevertheless, there are still some general standards many lenders follow, and knowing these standards can help you set goals and determine the best time to buy a home. 

What Exactly is a Credit Score? 

(Click the headline to tweet)

Before going into detail on what makes a credit score great, good or poor, it is important you understand exactly what a credit score is. A credit score is a three-digit number that reflects your financial responsibility. FICO, one of the most commonly used credit scoring models, incorporates the following into the calculation of your score:

• Payment history - 35 percent 
• Amounts owed - 30 percent 
• Length of credit history - 15 percent 
• Credit mix - 10 percent
• New credit - 10 percent ¹

FICO scores range from 300 to 850. As you can see, payment history is the most important factor affecting your credit score, so one of the most important things you can do to ensure a healthy score is to make on-time, in-full payments on any credit you have due. 

The three major credit reporting bureaus - Experian, TransUnion and Equifax - all calculate your credit score, and you have a right to obtain a free copy of your report from each bureau once a year at www.annualcreditreport.com. It is important to regularly check your score to see where your weaknesses are and make a plan to improve them while also checking for any errors. Errors are quite common on credit reports, as it is easy for the agencies to mix up people with similar names or addresses. These errors can significantly reduce your score, so if you do find an error, make sure to contact the bureau in question as soon as possible to get it taken care of. 

https://youtu.be/5BZoqYpr-3o

In general, scores of 760 and higher are considered excellent.

Credit Scores and Mortgages 

In general, scores of 760 and higher are considered excellent. Consumers in this category will probably be able to get a home loan with very low interest rates. If your score is between 700 and 760, it's still considered very good. You will still have access to a low interest rate, though it will probably be about a quarter of a percent higher than the lowest possible rate. Scores between 660 and 699 are good, and those in this range will likely pay about 0.5 percent above the lowest interest rate available. 

When scores drop below 660, the interest rates begin to climb significantly. Those with a moderate credit score, between 620 and 660, should expect to pay an interest rate about 1.5 percent higher than the lowest one available, and those with a score between 580 and 620 will probably pay about 2 to 4 percent more. Scores of 500-580 will make it extremely difficult to get a mortgage, but if you are able to gain approval, your interest rates will be very high.²

The type of loan you apply for also matters when it comes to the ideal score. FHA loans, for example, are easier to obtain because they are backed by the Federal Housing Administration. Thus, lenders are more willing to issue them to applicants with lower scores.³

In addition to making on-time payments, there are many more steps you can take to improve your credit score, but it takes time to move those numbers up. The sooner you start working toward a healthier score, the sooner you will be able to afford the home of your dreams. 

If you want a better idea of the kind of loan your credit score will qualify you for, contact the Loan Officers at New American Funding today. We can help determine the best possible loan package you can obtain based on your current financial situation. 

Sources 

¹FICO
²Smart Asset
³Cheat Sheet

Buying a home is often considered a milestone in life as well as in a relationship. According to the National Association of Realtors, 67 percent of homebuyers were married couples, up from 58 percent five years ago. However, many couples are reversing this order, opting to join together in homeownership before matrimony.

Unmarried Homeowners

The NAR's 2015 Profile of Home Buyers and Sellers found 7 percent of homebuyers were unmarried couples¹. While this sounds like a small fraction of homebuyers, this is a growing trend among younger buyers. The median age for this demographic was 33 years old, while the median age for married couples was 36 and those for single females and males even higher, at 50 and 45, respectively.

According to the U.S. Census Bureau, the number of people living with a partner, as opposed to living alone, with family, with a spouse or another arrangement, has grown steadily since 1996². In 2010, more than 16,000 homeowners lived with a partner, about double the amount of just a decade before.

There are plenty of reasons millennials are opting to buy a home before tying the knot. More than half of unmarried homebuying couples were first-time homebuyers and the majority of them did so because they wanted to own their own property, as opposed to wanting a bigger space or because of a change in their family situation. However, these aren't the only reasons to buy a home together.

Financial Reasons

GOBankingRates reported that increasing costs of both weddings and rentals could be contributing to the trend³. As weddings become more expensive, millennials hoping to save money for future events choose to hold off. Meanwhile, rent is becoming more expensive and, on a long-term time frame, owning a home makes more financial sense. Rather than paying a monthly bill only to be granted one month's worth of housing, a monthly mortgage payment means a couple is growing their home equity. Once the mortgage is paid off, they have something to show for all those payments.

Forbes contributor Lucy Mueller explained that buying a home as a financial decision has also led millennial homeowners to view the purchase differently⁴. They aren't looking to buy a forever family home; a house is an investment. They plan to sell it after a few years. Nela Richardson, Redfin's chief economist, told Mueller that this mindset affects the type of homes millennials are drawn to.

"We know that a lot of millennials want to live in the city, they want to live close to work, they want to live in walkable neighborhoods and guess what? These neighborhoods are great investments," Richardson explained. "The millennials I'm profiling are typically not the ones buying large McMansions in the suburbs that will take longer to pay. Many of them are buying condos in the center of cities."

According to the NAR, more than half of these homebuyers listed a convenient commute to work as a main factor in the homes they chose. As more unmarried millennials begin to become homeowners, real estate agents will want to seek out properties that will appeal to them: affordable, single-family homes and condos in walkable neighborhoods.

Source:

¹ National Association of Realtors
² U.S. Census Bureau
³ GOBankingRates
⁴ Forbes