Are you a Texas Veteran and are you considering buying or refinancing in today’s market? Buying or refinancing a home is a decision that takes both careful thought and planning. Most prospective homebuyers put an extraordinary amount of time into selecting just the right home or deciding whether or not to refinance. Have you considered that selecting the right loan is just as important? If you qualify for a Texas VA home loan, you owe it to yourself and your family to consider the advantages and the differences between conventional and VA home loans.

Obviously, the biggest consideration is the down payment. Conventional loans require a minimum down payment of 3%. But in today’s market, banks and lending institutions are requiring as much as 10-20% down. In light of the increasing defaults, lender’s seek to minimize their risk. Backed, by the Federal government, VA home loans eliminate both the lender’s risk and the borrower’s down payment thus providing the only 100% financed loan program. An excellent starting point in considering your loan program!

And then there’s the dreaded PMI (private mortgage insurance). Customarily, when a borrower finances more than 80% of the home’s value, the borrower pays PMI increasing the size of their monthly payment. Again, backed by the Federal government, VA home loans do not require PMI eliminating that expense.

We all are aware that today’s rates are among the lowest in US history. Although conventional loans are offering all-time low interest rates, lenders are offering even lower interest rates to qualified VA borrowers. Since VA Loans are backed by the Federal government (repetitive, I know) the lending institution’s risk is minimized and their willingness to provide lower rates is maximized. Simple math tells us that a lower rate plus no PMI equals lower monthly payments. A conventional loan with a higher interest rate plus PMI equals a higher monthly payment. Which would you choose? If the answer still isn’t clear, take a look:

And let’s not forget that the qualification standards for each loan type are very different. Because of the government guarantee, lending institutions assume less risk and have less stringent qualification standards with a VA home loan.

Based on all this information, a VA home loan or refinance is a smarter and easier choice for qualified Veterans. Are you a qualified Veteran? Let’s take see:

VA Loan Military Service Eligibility Requirements
Wartime Service
WWII     9/16/1940 to 7/25/1947
Korean     6/27/1950 to 1/31/1955
Vietnam     8/5/1964 to 5/7/1975

You must have at least 90 days on active duty and been discharged honorably. If you served less than 90 days, you may be eligible if discharged for a service-connected disability.

Peacetime Service
7/26/1947 to 6/26/1950
2/1/1955 to 8/4/1964
5/8/1975 to 9/7/1980 (enlisted)
5/8/1975 to 10/16/1981 (officer)

You must have served at least 181 days of continuous active duty and been under honorable conditions. If you served less than 181 days, you may be eligible if discharged for a service-connected disability.

If you are a Veteran and interested in a home loan, Lone Star Financing has dedicated consultants specializing in VA Home Loans ready to assist you in selecting the perfect loan. They will work with you through the home buying process and insure that you maximize the government assistance with your Texas VA home loan.

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So what is this VA Streamline Loan everyone’s talking about? And have you heard of the VA’s Interest Rate Reduction Refinancing Loan (IRRRL)? Interestingly, they are one in the same! This is a loan that refinances an existing VA Loan into a new VA Loan with a lower interest rate, or for some, from an adjustable rate mortgage (ARM) into a fixed rate mortgage. Differing from a typical VA loan, a Certificate of Eligibility is not required for this VA refinance. This is not a standard refinance by any means… a VA IRRRL/Streamline loan requires:
• NO - Appraisal
• NO - Credit Check
• NO - Credit Underwriting
• NO - Qualifying Debt Ratios
• NO - Income Verification
• NO - Face to Face Application

Sounds great doesn’t it? If your current primary residence is financed with a VA home loan, you should take advantage of the lowest interest rates in history and consider this streamlined refinancing. Let’s get started with the eligibility requirements specific to the VA IRRRL/Streamline loan:

• In order to use this program, the applicant must be refinancing an existing VA Loan into a new VA loan.
• The borrower needs to certify that this is an owner occupied property. The original VA loan contains a signed agreement stating the borrower(s) is the primary occupant of the home, and to apply for this loan, another agreement will be signed saying that you have been the primary occupant.
• There is no cash-out option. The Veteran cannot take more out on the new loan than what is currently owed. The loan can be more only as a result of fees and closing costs being financed.
• The VA does not require another credit check and appraisal since it has already approved the loan guarantee in the first place. Nevertheless, lenders usually require a credit check and appraisal to satisfy their stipulation that the borrowers are still credit worthy and the property still has a higher market value than their maximum loan amount.
• Since the borrower is refinancing a VA for a home loan guarantee, refinancing does not require a Certificate of Eligibility.

Sounds good so far. But are there fees associated with this VA IRRRL/Streamline loan? The VA only requires a 1.5% funding fee of the value of the new loan. There are no other fees associated with this loan. If a lender suggests the VA charges extra fees, contact the VA to see if something has recently changed and, if not, find a new lender. And remember, the VA allows financing of all closing costs associated with refinancing into the new mortgage. Although you can use your current lender, any mortgage lender on the VA-approved lender’s list can be consulted for the IRRRL/Streamline. Shop around for your refinancing loan. By going to several lenders, you can choose the best loan terms for you and your family. The VA has a long list of approved lenders, and you should shop around.

As a bonus, borrowers can include the cost of home improvements in the VA IRRRL/Streamline. Up to $6,000 in the refinancing loan can be used for the purpose of energy efficient home improvements. Unfortunately, other home improvements are not eligible.

Again, if you have a current VA Home Loan, consider a VA Refinance since rates have never been lower. Loan Star Financing can guide you through the steps of selecting the best refinance option for you and your family.
http://www.lonestarfinancing.com/Texas-VA-Home-Loans/

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VA home loans are the best mortgage deal on the market today! If you qualify, or even think you might qualify, it’s important you find out how the Texas VA home loans can benefit you and your family.

Did you know that VA home loans are not only for the first-time homebuyer, but for buyers looking to looking to refinance or are selling and looking for a new home loan? Last week I covered the eligibility requirements and the benefits of using a Texas VA home loan to purchase your residence. Let’s take a quick tour of those advantages and then look at a VA home refinance:

• Compared to a conventional loan, a VA home loan’s qualifying criteria is uncomplicated with more lenient credit and income standards.
• VA home loans are guaranteed and written at a lower interest rate.
• There is no down payment requirement and the need for mortgage insurance is eliminated.
• 100% financing is available.
• VA Home Loans often are the focus for first time homebuyers.
• The VA guaranty protects the lender against loss up to the amount guaranteed and allows a Veteran to obtain favorable financing terms.
• A Veteran’s basic entitlement is $36,000 but additional entitlement is available for certain loans over $144,000.
• VA does not have a maximum loan amount but lenders will generally only loan up to four times a veteran’s available entitlement without a down-payment, provided the veteran is income and credit-qualified and the property appraises for the asking price.
• The maximum entitlement amount changes on an annual basis and is currently $104,250 for 2009. Therefore, if a veteran qualifies, a loan up to $417,000 (larger loans are available with specific guidelines) can be obtained without a down payment.
• No prepayment penalty.

In addition to new home financing, the VA home loan program also has a impressive refinancing benefit. As with the new home loan program, the eligibility requirements remain the same. Veterans can lower their monthly payments with a VA refinance and with the all-time record low rates, this is the time to examine the benefits and advantages. Whether you currently have a VA home loan or a conventional loan, a VA refinance can save Veteran homeowners much needed cash every month.

There are three options to choose from should you qualify for a Texas VA home loan refinance.

• The first option is a VA Refinance. This is a traditional option that both lowers your interest rate and therefore lowers your monthly payment. If you’re eligible, you can enjoy the flexibility and benefits of VA loan products even if you don’t currently have a VA loan covering your existing property.

• The second option is the New Cash-Out Refinance Option. Due to recent legislation, there is a special opportunity for Veterans to refinance existing mortgages into VA Loans with excellent benefits. A Cash Out Refinances allows a homebuyer to free up cash with up to 100% of the current loan-to-value. The Veterans’ Benefits Improvement Act of 2008 makes is possible for strapped homeowners to use the cash out program to pay off debt, make home improvements, or simply have more cash on hand each month.

• The third option is the VA Streamline Refinance (for current VA borrowers) also referred to as an Interest Rate Reduction Refinancing Loan (IRRRL). The pros of this loan are:

• NO - Appraisal
• NO - Credit Check
• NO - Credit Underwriting
• NO - Qualifying Debt Ratios
• NO - Income Verification
• NO - Face to Face Application

You must already have used your eligibility for a VA loan on the refinancing property. In other words, it’s a VA-to-VA refinance reusing your entitlement. You must have your Certificate of Eligibility in order to show prior use of your entitlement.

Interested? You should be. And if you’re not, let’s see just how much can a refinance save… take a look at a 1% rate reduction:

How Much Will a 1% Rate Reduction Save You Monthly?

Loan Amount VA-to-VA Savings Conventional to VA Savings
$150,000 $115 $209
$250,000 $191 $347
$350,000 $268 $488
$450,000 $345 $627

And the only cost required by a VA refinance is a funding fee of one-half of one percent of the loan amount, which may be paid in cash or included in the loan.

Clearly, if you’re looking to refinance, it’s a smart move in today’s economy. To check your eligibility or for more detailed information regarding Texas VA Home Loans specific to your personal situation, Lone Star Financing VA home loan consultants are available at http://www.lonestarfinancing.com/Texas-VA-Home-Loans/. They will guide you step-by-step in maximizing your VA home loan benefits.

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Have you been affiliated with the military and are you looking to buy a home or refinance in Texas? The VA Home Loan Program is receiving $6 billion in funding this year so this is an excellent time for you to consider a VA home loan. VA home loans are ideal for young families and first time home buyers since the borrower can finance 100% of the home’s value and purchase with $0 down. Is there any other loan program available that can offer these benefits? The answer is no.

With a military service background you owe it to yourself to consider a VA home loan. Compared to a conventional loan, a VA home loan’s qualifying criteria is uncomplicated with more lenient credit and income standards. VA home loans are guaranteed and written at a lower interest rate. There is no down payment requirement and the need for mortgage insurance is eliminated. VA Home Loans often are the focus for first time homebuyers. Nevertheless, in today’s market they also benefit repeat buyers or Veterans who are considering refinancing at a lower rate or refinancing to take cash out.

Backed by the Department of Veterans Affairs, there is a broad spectrum of Veterans who should be taking advantage of these loans. In 2006, the loan limit for VA Loans was fixed at $729,000. No money down, a substantial loan limit, and no high rate second mortgage are almost unheard of in the conventional loan world. With as many as 80% of approved VA home loan borrowers not qualifying for a conventional loan, it’s no surprise the recession-proof qualities of VA loans has put Texas VA home loans in the spotlight. The VA Home Loan Guaranty Program makes it conceivable for VA-eligible borrowers to fare very well in these harsh economic times. It’s more important than ever for Veterans and their families to investigate the benefits afforded by the Texas VA Home Loan Program. And, again, no down payment is required if the eligible Veteran has full guaranty benefits and the loan amount does not exceed $417,000 (larger loans are available with specific guidelines).

So… do you qualify for a Texas VA Loan? As with all loans, there are qualifying requirements. Before you apply you need to understand these pre-requisites. A Texas VA loan requires both service and eligibility requirements. Here’s a quick look at what’s necessary:

Service Requirements
• Veterans must have been honorably discharged and have served at least 90 days of active duty during wartime or 181 days on active duty during peacetime.
• Service of at least six years is required for members of the Military Reserves and the National Guard. The Reserve branches eligible for the VA Home Loan Program are Army National Guard, Army Reserve, Air National Guard, Coast Guard Reserve, Navy Reserve, Marine Corps Reserve, and Air Force Reserve.

The following are also considered eligible for the VA Home Loan Program:
• Spouses of deceased Veterans who died as a result of their active service or a service-related injury as long as they are not remarried
• Spouses of members of the US Armed Forces who are missing in action or prisoners of war for over 90 days
• US citizens who served with an allied country during WWII may be eligible

Veterans who are eligible for the VA Home Loan Program have a maximum loan entitlement of currently $36,000 that can be increased to $60,000 for loans that exceed $144,000. This is the entitlement and NOT the maximum loan amount, which is actually $729,000. This entitlement is the amount of your loan that the VA guarantees to the bank thus alleviating your mortgage insurance expenses. As a bonus, the entitlement never expires.

Eligibility Requirements
• You must obtain a Certificate of Eligibility (COE) as proof from the Military that service requirements have been met and qualify for a VA Home Loan.
• The VA will determine your eligibility for a Texas VA Home Loan when you submit VA Form 26-1880. If qualified, the Department of Veterans Affairs issues a Certificate of Eligibility to use when applying for your VA Home Loan. You must submit VA Form 26-1880 to the VA to guarantee your VA Home Loan. The form must be filled out entirely in order for the VA to determine your eligibility. You will be asked to submit some of the following information when requesting your Certificate of Eligibility:
• Name, address, phone number, etc.
• Social Security number
• Branch of the Military in which you serve or served
• Service number, separation of service, or statement of service papers
• Any previous VA Loans that you may have had, including the VA Loan number

What else is required? Although your credit score is not a decisive factor, your credit history for the previous twelve months is evaluated to ensure a satisfactory history of making timely payments. Be aware, a negative mortgage payment history does carry a significant impact for the borrower’s approval.

Bankruptcy is not an immediate disqualification. You may still qualify for a Texas VA Home Loan if the bankruptcy occurred within the past two years due to verified circumstances beyond the control of you or your spouse. Falling into that category would be circumstances such as unemployment, long-term strikes, or medical bills not covered by your insurance. However, the bankruptcy must be discharged in order for the borrower to qualify.

Qualified borrowers must show a stable employment history. If the Veteran’s spouse is to be included on the loan, both the Veteran and their spouse’s employment history should indicate two years of stable employment, which is expected to continue for the foreseeable future, and all employment gaps must be explained. And borrowers must be able to show a residual amount of income following their mortgage payment each month.

The benefits of Texas VA Home Loans are deep and broad and we’ve just scratched the surface. Stay tuned for more information regarding Texas VA Loans. If you qualify, you need to have all the facts and I’ll be providing them over the next few weeks.

http://www.lonestarfinancing.com/Texas-VA-Home-Loans/
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On March 4, 2009, President Barack Obama announced a $75 billion mortgage rescue plan providing affordable mortgage terms for countless American at-risk homeowners. His plan stabilizes the faltering housing market by allowing millions of families to refinance or restructure their at-risk mortgages. Those facing foreclosure and those who have “played by the rules,” and continue to struggle with their house payments see this program as a ray of hope.

The Homeowner Affordability and Stability Plan is the administration’s lifeline to struggling homeowners with basically two options. The first option targets those owing up to 105% of their home’s worth, thus qualifying them for low-cost refinancing. The second option targets those who have missed a payment or who are at risk of doing so because their mortgage is more that 31% of their gross monthly income. This second group of homeowners, may qualify for loan modification. For these struggling homeowners, applications for assistance became available on March 4. Refinancing remains available until June 2010 and loan modifications are available until December 31, 2012.

As with any plan there are restrictions in place. The only qualifying home loan is a primary residence. Real estate investment property is exempt. A property with up to four units qualifies IF one of those units is the owner’s primary residence.

The refinancing component of the mortgage rescue plan essentially allows lenders to waive the 80% loan-to-value ratio, usually required for a refinance, with the following restrictions:
• Your current mortgage must be a “conforming” loan held by government-sponsored mortgage entities Fannie Mae and Freddie Mac which own or insure about half of the nation’s $12 trillion in mortgages.
• The mortgage needs to be less than $417,000 (or the $729,750 cap in Los Angeles, New York, and other high-cost areas). You’ll need to call your lender to find out if your loan conforms.
• Your payment history must be in good standing with no more than one 30-day late payment in the past 12 calendar months.
• You are able to pay the new monthly payment.
• Your new monthly payments do not exceed 31% of your gross monthly income.

The low-cost refinance will be most attractive to homeowners whose current mortgage is:
• A fixed-rate mortgage – at least 6.5% - and the savings from a lower mortgage rate allows the homeowner to recoup the closing costs in 24 months or less.
• The homeowner has an adjustable mortgage rate that is likely to adjust to a significantly higher rate before a future sell.

So what about those homeowners who are able to pay their monthly payments but their home is worth less than their mortgage? Unfortunately, there is nothing risky about owing more than your home is worth… that is, unless you need to sell the property quickly or you are looking for a home-equity loan. Real estate experts are suggesting improving the property to add value until you are ready to sell.

Unfortunately, there are homeowners whose property value is upside down – and refinancing is unlikely. There are also homeowners who really can’t afford their payments but don’t qualify under the mortgage rescue plan. Experts are advising these unfortunate homeowners to talk to their lender and ask about other options such as deed-in-lieu (of foreclosure) or short-sale. Call before you fall behind in payments. The loss-mitigation department should work with you since foreclosure may hurt the lender.

For more information on the mortgage rescue plan please see:

http://www.ustreas.gov/press/releases/tg33.htm

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