Thursday, May 3, 2012

FAQs on VA Home Loans |

Why get a VA loan over other types?
Simply put, a VA Home Loan allows qualified buyers the opportunity to purchase a home with no down payment. There are also no monthly mortgage insurance premiums to pay, limitations on buyer's closing costs, and an appraisal that informs the buyer of the property value. For most loans on new houses, construction is inspected at appropriate stages and a 1-year warranty is required from the builder. VA also performs personal loan servicing and offers financial counseling to help veterans having temporary financial difficulties.
What if I've used a VA Home Loan Before?
You can have previously-used entitlement "restored" one time only in order to purchase another home with a VA loan if the borrower has paid off the prior loan but still owns the property, and wants to use his entitlement to purchase a second home. This often occurs with active duty borrowers who PCS to a new station but want to keep their existing home for retirement. However if the prior loan has been paid off, AND the property is no longer owned, they can have their entitlement restored as many times as they want. They can re-use their VA eligibility for every home purchase from the first to the last.
Also, veterans who have used a VA loan before may still have remaining entitlement (see chart) to use for another VA loan. A veteran's maximum entitlement is $89,912, and lenders will generally loan up to four times your available entitlement without a down payment, provided your income and credit qualifications are fine, and the property appraises for the asking price. Lenders may require that a combination of the guaranty entitlement and any cash down payment must equal at least 25 percent of the reasonable value or sales price of the property, whichever is less.
Loan AmountGuaranty % Dollar Amount*Lender Amount
Up to $45,00050%$22,500$90,000
$45,001 - $56,25040-50%$22,500$90,000
$56,251 - $144,00040%$36,000$144,000
Over $144,00025%$89,912$417,000
Manufactured Home or Lot40%$20,000$80,000
*Lenders operate under their own regulations and guidelines in these matters
For Alaska, Hawaii, Guam, and U.S. Virgin Islands? residents, note that maximum original loan amounts have now been increased 50 percent higher for first mortgages.
Remaining entitlement and restoration of entitlement is not automatic. It can be requested through the nearest VA office by completing VA Form 26-1880. The entitlement may also be restored one time only if the veteran has repaid the prior VA loan in full but has not disposed of the property purchased with the prior VA loan.
What service is not eligible for a VA Home Loan?
You are not eligible for VA financing solely based upon service in World War I, Active Duty Training in the Reserves, or Active Duty Training in the National Guard. Note: Guard and Reservists are eligible if they were "activated" under the authority of title 10 U.S. Code as was the case for the Iraq/Afghanistan.
Do all local lenders offer VA Loans?
Not necessarily. Choose a VA-approved lending institution that can handle your home loan. A lender can help you review your credit history and determine how much of a loan you can qualify for. Be aware that different lenders have different closing costs and other fees, so it pays to shop around.
What types of repayment options are available?
The guarantees thirty-year loans with a choice of repayment plans: Traditional fixed payment (constant principal and interest); Graduated Payment Mortgage, or GPM (low initial payments which gradually rise to a level payment starting in the sixth year); and in some areas, Growing Equity Mortgages, or GEMs (gradually increasing payments with all of the increase applied to principal, resulting in an early payoff of the loan). There is no prepayment penalty.
What is the maximum VA loan?
Although there is no maximum VA loan (limited only by the reasonable value or the purchase price), lenders generally limit the maximum VA loan to $417,000.
If I was discharged years ago and want to qualify for a VA loan, what forms or other documents will I need?
Everyone is required to obtain a Certificate of Eligibility. If you do not have this Certificate, you will need to apply using VA Form 26-1880 and this will require a copy of DD-214 (Certificate of Release or Discharge from Active Duty) showing character of service. Along with the Certificate of Eligibility, loan applicants will need to document their credit, savings and employment information.
Does a veteran's home loan entitlement expire?
No. Home loan entitlement is generally good until used if a person is on active duty. Once discharged or released from active duty before using an entitlement, a new determination of their eligibility must be made based on the length of service and the type of discharge received.
Reservists are eligible for VA Loans, too. Who qualifies?
Eligibility extends to members who have completed a total of 6 years in the Selected Reserves or National Guard (member of an active unit, attended required weekend drills and 2-week active duty for training) and received an honorable discharge; continue to serve in the Selected Reserves. Individuals who completed less than 6 years may be eligible if discharged for a service- connected disability. In addition, reservists and National Guard members who were activated on or after August 2, 1990, served at least 90 days and were discharged honorably are eligible. Eligibility for Selected Reservists is due to expire on September 30, 2009.
Can I build a home with a VA Home Loan?
Yes. But there are several clauses that may make this difficult to accomplish. Many veterans use their VA Home Loan Certificate of Eligibility to negotiate in good faith a private home construction loan and then refinance the completed home using VA Home Loans.
Can you take out a VA loan for a second home or vacation cabin?
The law requires that you certify that you intend to occupy the property as your home. But it specifically provides that occupancy by the veteran's spouse satisfies the personal occupancy requirement. However, there are no provisions for other family members. VA Home Loans are available for a variety of purposes including building, altering, or repairing a home; refinancing an existing home loan; buying a manufactured home with or without a lot; buying and improving a manufactured home lot; and installing a solar heating or cooling system or other weatherization improvements. You are also allowed to buy income property consisting of up to four units, provided you occupy one of the units.
Can a veteran obtain a VA loan for the purchase of property in a foreign country?
No. 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.
What is a VA-guaranteed manufactured home loan?
A private lender makes a VA-guaranteed manufactured home loan. The VA will protect the lender against loss if the veteran or a later owner fails to repay the loan. The amount VA will guarantee is 40 percent of the loan amount or the veteran's available entitlement, up to a maximum amount of $20,000. The guaranty amount is not the same as the amount a veteran can borrow.
If a borrower has used a VA loan in the past, can that person be eligible again?
Veterans who had a VA loan before may still have "remaining entitlement" to use for another VA loan. The current amount of entitlement available to each eligible veteran is $36,000. Veterans can have previously-used entitlement "restored" to purchase another home with a VA loan if: the property purchased with the prior VA loan has been sold and the loan paid in full, or if a qualified veteran buyer agrees to assume the VA loan and substitute his or her entitlement for the same amount of entitlement originally used by the veteran seller. The entitlement may also be restored one time only if the veteran has repaid the prior VA loan in full, but has not disposed of the property purchased with the prior VA loan.
I am a Veteran who purchased a home with my spouse utilizing my VA eligibility. I am now divorced and my spouse was awarded the home. How do I get my eligibility back?
When the property is awarded to the Veteran's spouse as a result of the divorce, entitlement cannot be restored unless the spouse refinances the property and / or pays off the VA loan in full or the ex-spouse is a veteran who substitutes their entitlement.
I heard the VA has an inventory of foreclosed homes. How can I find out more about this?
The Department of Veterans Affairs (VA) acquires properties as a result of foreclosures on VA guaranteed loans. These acquired properties are marketed through a property management services contract with Ocwen Federal Bank FSB, West Palm Beach, Florida. Local listing agents through local Multi Listing Systems (MLS) list the properties. A list of properties for sale may also be obtained from Ocwen's website at

FAQs on VA Home Loans |

Friday, April 13, 2012



On October 9, 2011 Governor Brown signed into law SB 507 affecting Change of Ownership report penalties.  The Assessor’s Offices use the documents to assist them in determining IF and HOW a change in ownership affects the assessment of Real Property and Manufactured Homes which they are charged with assessing.

These documents have been in use for a number of years and there is usually no big problem.  Occasionally the Preliminary Change of Ownership Statement that is required to accompany every transfer document submitted for recording, is rejected or missing.  In that chase, the Assessor sends a notice to the new owners that they must file a Change of Ownership Statement within 90 days. 

HERE’S THE IMPORTANT PART!  The existing penalty for failure to file that Change of Ownership Statement was $100 to $2,500.00.  The new penalty for non-willful failure to file now caps at $5,000.00 for properties eligible for a home-owners exception; and up to $20,000.00 for all others.

The bill also requires corporations and other legal entities to file the statement for any change in control or ownership.  Here is the link to view the full text of the bill.  

Now more than ever, it is critical to make sure that your escrow company has accurate mailing address information on your Grant Deed and that the Preliminary Change of Ownership Statement is fully and accurately completed by the new owner!  A few minutes can save Thousands!

Infomation provided by PJ Garcia with Beach Pacific Escrow

Monday, February 20, 2012

Homebuying Tips

  • Home buying doesn’t begin with home searching; it begins with a mortgage pre-approval.  Often, first-time home buyers fear getting pre-approved because they’re afraid the lender may tell them they do not qualify for a mortgage or they qualify for a loan smaller than expected.  However, by getting preapproved, buyers will make a financial decision rather than an emotion one.
  • Another mistake first-time home buyers make is not thinking of a house as a long-term commitment.  If a buyer may have to switch jobs in a year or two and may have to move for the job, they should think twice about buying a house.  Ideally, buyers should picture themselves living in the house for five to seven years.
  • Some first-time buyers make the mistake of spending all of their savings on the down payment, closing costs, and coming up with a 20 percent down payment to avoid paying for mortgage insurance.  However, most real estate experts advise against this because the borrower will be left with no savings at all for home repairs and other unexpected expenses.


Monday, February 13, 2012

Lovers Lane

Lovers Lane
Happy Valentine's Day!

Unemployed? Freddie Mac extends forbearance to unemployed borrowers

Freddie Mac Now Permits Up To 12 Months Forbearance To Unemployed Borrowers

MCLEAN, Va., Jan. 6, 2012 /PRNewswire/ -- Freddie Mac (OTC: FMCC) today announced it is giving mortgage servicers expanded authority to provide six months of forbearance to unemployed borrowers without Freddie Mac's prior approval and up to an additional six months with prior approval. This means unemployed borrowers may be eligible for up to 12 months of forbearance. Freddie Mac's forbearance options are being expanded at the direction of the Federal Housing Finance Agency and will take effect on February 1, 2012.
News Facts:

  • Mortgage servicers can now approve unemployed borrowers with Freddie Mac owned- or guaranteed-loans for six months of forbearance without prior approval from Freddie Mac.
  • Servicers can extend the forbearance period up to an additional six months with prior Freddie Mac approval, giving eligible unemployed borrowers with Freddie Mac owned- or guaranteed-mortgages up to one year of forbearance.
  • The expanded forbearance options will take effect on February 1, 2012.
  • Delinquent borrowers in an existing short term forbearance plan can be evaluated for an extended forbearance under the new policy.
  • Previously Freddie Mac allowed servicers to grant up to three months of forbearance with no payment and without prior approval, or six months at a reduced payment with prior approval. Longer forbearance required prior approval and was generally restricted to events such as natural disasters, permanent disability or long-term medical emergencies.
  • According to the latest statistics, nearly 10 percent of delinquencies on Freddie Mac mortgages were tied to unemployment.
Attribute to Tracy Mooney, Senior Vice President, Single-Family Servicing and REO, Freddie Mac:
"These expanded forbearance periods will provide families facing prolonged periods of unemployment with a greater measure of security by giving them more time to find new employment and resolve their delinquencies. We believe this will put more families back on track to successful long-term homeownership."
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters. For more information, visit

SOURCE Freddie Mac
For further information: CONTACT: BRAD GERMAN, FREDDIE MAC, (703) 903-2437,
The financial and other information contained in the documents that may be accessed on this page speaks only as of the date of those documents. The information could be out of date and no longer accurate. Freddie Mac does not undertake an obligation, and disclaims any duty, to update any of the information in those documents. Freddie Mac's future performance, including financial performance, is subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect the company's future results are discussed more fully in our reports filed with the SEC.

Friday, February 10, 2012

Cookies for Troop!

Operation Help A Hero and returning Marines/Sailors would LOVE some Girl Scout cookies! If you'd like to donate money I will personally deliver your boxes of cookies to Camp Pendleton and place them in the barracks of a returning soldier. I can even provide you with a tax receipt!

Monday, November 14, 2011

Five Great Things about Homeownership

If you've been on the fence about homeownership, now is the time to take a leap! Don't let the negative press deter you from one of life's greatest joys.
Take a look at five short and sweet reasons that homeownership is great!
1. Equity. When you pay rent, you never see that money again. It is lining the landlord's pocket. Yes, buying a home may come with some hefty initial costs (downpayment, closing costs, inspections), but you will make that money back over time in equity built in the home. Historically, homes appreciate by about 4 to 6 percent a year. Some areas are still experiencing normal appreciation rates. For the areas that have seen harder times since the recession, experts feel that the housing market will recover. Homeownership is about building long-term wealth. A home bought for $10,000 in 1960 is most likely worth 10 times that in today's market.
2. Relationships: Renters tend to see their neighbors come and go quickly. Some people sign year leases while others are in the community for much shorter terms. Apartment complexes also tend to have less common shared space for people to meet, greet, and socialize. Homeowners, however, have yards, walking trails, or community pools and clubhouses where they can get to know each other. Neighbors stay put much longer (at least three to five years if they hope to recoup their closing costs). This means more time to develop relationships. Research has shown that people with healthy relationships have more happiness and less stress.
3. Predictability: Well, as long as you have a fixed-rate term on your mortgage it's predictable. Most people buying homes today know that a fixed-rate is the way to go. This means your payment amount is fixed for the life of the term. If your mortgage payment is $500 today, then it will still be $500 a month in 10 years. This allows for people to budget and make solid financial plans. The sub-prime crisis meant many homeowners with adjustable rate mortgages saw their monthly payments rise and then rise some more. Homeownership, though, generally comes with a predictable table of expenditures. Even the big purchases are predictable. You know most roofs last just 15 years (or so). You know that each year you'll need to pay for the gutters to be cleaned, and so on.
4. Ownership: Okay, this is a given. Homeownership means you "own" your home. That comes with some incredible perks, though! You can renovate, update, paint, and decorate to your heart's desire. You can plant trees, install a pool, expand the patio, or do holiday decorating that would rival the Kranks (if the HOA allows!). The bottom line is this is your home and you can personalize it to your taste. Most renters are stuck with the same beige walls and beige carpet that has been standard apartment decor for 20 years. Now is your chance to let your home speak!
5. Great Deals: It's a great time to buy. Interest rates are at historic lows. We're talking 4.0 percent instead of 6.0 or higher. This means big savings for today's buyers. Home prices have also taken a dip since the recession, which means homes are more affordable than ever. If you have steady income and cash for a downpayment, then be sure to talk to your local real estate agent about what homes in your area could be a fit for you.
Homeownership can be a real joy. It's time to get off the fence and into a home that is right for you!
Published: November 2, 2011, by Carla Hill

Thursday, November 10, 2011

Veteran's Day

Thank you to all of the men and women who have served in our Military. We salute you on Veteran's Day and want to thank you for your sacrifice to our country.

Saturday, November 5, 2011

Don't forget to move your clocks back one hour tonight for Daylight Saving Time. Enjoy the extra hour of sleep!