Simple Mortgage Definitions : Loan-To-Value (LTV)

Simple Definition : Loan-To-Value (LTV)

In the world of mortgages, Loan-to-Value (LTV) is the amount of money you're borrowing as a percentage of your home's value.

Lenders use loan-to-value calculations on both purchase and refinance transactions. The math to determine your LTV may vary based on loan purpose, however.  

With a refinance, the LTV is equal to your loan size divided by your home's appraised value. For a purchase, LTV is based on the sales price of the home, unless the home appraises for less than its purchase price. When this happens, your home's LTV is based on the lower purchase price -- not the appraised value. 

Here are four simple examples to illustrate the concept of loan-to-value :

Buying a Home which appraises for more than its Purchase Price

• House price: $100,000
• Appraised value : $110,000
• Downpayment: $20,000
• Loan amount: $80,000
• Loan-to-value (LTV) : 80%

Buying a Home which appraises for less than its Purchase Price

• House price: $100,000
• Appraised value : $90,000
• Downpayment: $20,000
• Loan amount: $80,000
• Loan-to-value (LTV) : 89%

Refinancing a Home with no Second Mortgage

• Home value: $100,000
• Loan balance: $80,000
• Equity: $20,000
• Loan-to-value or LTV: 80%

Refinancing a Home with a Second Mortgage

• Home value: $100,000
• Loan balance: $80,000
• Second loan balance : $10,000
• Equity: $10,000
• Loan-to-value or LTV: 90%

Whether you're buying or refinancing, though, your loan's loan-to-value is important because it helps to determine your mortgage rate and your loan eligibility.

High LTV Loans For Home Buyers

Loan-to-value is a key factor in your ability to get approved for a mortgage. In general, lenders prefer loans with low LTV because loans with low LTV represent less risk to the bank. 

That said, there are a number of loan programs specifically geared toward homeowners with high LTVs. There are even some programs which ignore loan-to-value altogether.

Here is a brief review of the more common high-LTV loan types.

VA Loan : Up to 100% LTV allowed

VA loans are loans guaranteed by the U.S. Department of Veterans Affairs. VA loan guidelines allow for 100% LTV, which means that no downpayment is required for an VA loan. VA mortgages are available to certain active-duty military servicepersons, veterans, military spouses, members of the Selected Reserve or National Guard, cadets at the U.S. Military, Air Force or Coast Guard Academy members, midshipman at the U.S. Naval Academy, World War II merchant seamen, U.S. Public Health Service officers and National Oceanic & Atmospheric Administration officers, among other groups.

USDA Loan : Up to 100% LTV allowed

USDA loans are loans insured by the U.S. Department of Agriculture. USDA loans allow for 100% LTV -- there is no downpayment required. USDA loans are sometimes known as Rural Housing Loans but it's a misnomer, of sorts. USDA loans are available in rural parts of the country, but they're available to many suburban homeowners, too. 

Conventional 97 : Up to 97% LTV allowed

Fannie Mae offers a special mortgage for homeowners with above-average credit scores called the Conventional 97. Via the Conventional 97 program, home buyers can make a downpayment of just 3 percent with access to below-average mortgage insurance rates. The program also allows for cash downpayment gifts. 

FHA Loan : Up to 96.5% LTV allowed

FHA loans are loans insured by the Federal Housing Administration, an agency within the U.S. Department of Housing and Urban Development (HUD). FHA mortgage guidelines require a downpayment of at least 3.5 percent. Unlike VA and USDA loans, FHA loans are not limited by military background or location -- there are no special eligibility requirements. FHA loans can be an especially good fit for home buyers with less-than-perfect credit scores, or for loan sizes over $625,500.

Conventional Loan : Up to 95% LTV allowed

Conventional loans are loans guaranteed by Fannie Mae or Freddie Mac. Both groups offer 95% LTV purchase mortgages, which means you will need to make a downpayment of 5 percent to qualify. 95% loans are available via most mortgage lenders, and private mortgage insurance (PMI) is often required. As compared to an FHA loan, conventional loans to 95 percent LTV are advised for homeowners with high credit scores only. In most other cases, FHA loans are preferred.

High LTV Loans For Refinancing Households

High-LTV mortgages are simpler for refinance transactions as compared for purchase ones. Multiple federal agencies make "no appraisal" refinance programs available to U.S. homeowners which means that loan-to-value is a non-factor for eligibility.

A few of those programs are highlighted below. 

The HARP 2.0 Program

The Home Affordable Refinance Program (HARP) was first launched late last decade. Also known as "The Obama Refi", HARP is available to homeowners with existing mortgages backed by Fannie Mae or Freddie Mac. HARP was revamped in 2011 as "HARP 2.0" and the latest iteration allows for unlimited LTV. No matter how little equity you have in your home, you can be HARP-eligible. 

FHA Streamline Refinance

The FHA Streamline Refinance is a special refinance program made available to homeowners with existing FHA mortgages. Official guidelines for the FHA Streamline Refinance waive appraisal requirements, which means that loans with unlimited LTV are allowed. Guidelines also state that income, employment and credit are not required to be verified. VA Streamline Refinance

The VA Streamline Refinance is a special refinance program for homeowners with existing VA home loans. The official name of the VA Streamline Refinance is the Interest Rate Reduction Refinance Loan (IRRRL). It's sometimes called the VA-to-VA loan. Similar to its FHA cousin, the VA Streamline Refinance does not require an appraisal, nor does it require the verification of income, employment or credit.

USDA Streamline Refinance

The USDA Streamline Refinance is available to homeowners with existing USDA mortgages only. Like the FHA and VA streamline programs, the USDA refinance waives the need for a home appraisal. The program is currently in pilot phase, and available in 19 states. 

What Is Your Maximum Loan-to-Value?

Loan-to-value is the ratio of how much you're borrowing to home much your home is worth. It's a simple formula but the basis for most mortgage lending. If you can grasp how LTV works, you can better pick the mortgage that suits your needs best.

To see what kind of mortgage rates you can get with your current LTV, use this rate quote form. Rates are available 24/7 online, and they're free.

Contact The Mortgage Mark with any questions!!

www.themortgagemark.com   mark@themortgagemark.com 

When You Sell Your Home With FHA Financing, Buyers Can “Assume” Your Mortgage And Its Interest Rate

As the U.S. housing market recovers from last decade's downturn, today's home buyers aren't always flush with cash. For buyers with few funds for downpayment, loans via the Federal Housing Administration remain popular.

The FHA allows loans with as little as 3.5% down.

Click here to skip to today's FHA mortgage rates.

About The FHA Mortgage

The Federal Housing Administration (FHA) was established in 1934, a period of "heavy renting". The U.S. was emerging from The Great Depression. Just 4 in 10 households owned their homes.

At the time, mortgage terms were onerous. To get a loan meant to make a 50% downpayment; to agree to a loan term of 5 years or fewer; and, to make a "balloon" payment to the bank after the mortgage's first few years.

Few people could meet these terms so the FHA spawned a new method of finance.

Via its Mortgage Insurance Premium (MIP) program, the FHA created a self-sufficient insurance fund through which mortgage lenders could be "paid back" in the event of a loan default.

The FHA created a series of rules known as the FHA mortgage guidelines. The group agreed to provide to FHA-approved lenders insurance for all loans meeting the minimum standards as set forth by the guidelines.

The FHA MIP system gave banks confidence to make better loans with better terms for U.S. home buyers. Nationally, downpayment requirements dropped, loan terms lengthened, and mortgage rates were made affordable. Homeownership rates climbed.

Today, more than 80 years after its creating, the FHA remains as the only federal agency which has never taken even a dollar from U.S. taxpayers. The FHA is entirely self-sufficient.

Click here to skip to today's FHA mortgage rates.

U.S. Home Buyers Choose FHA Loans

In today's expanding economy, U.S. home buyers have mortgage loan options.

Conventional loans are available via Fannie Mae and Freddie Mac; Rural Housing Loans are available via the USDA; 100% loans are available via the Department of Veterans Affairs and its VA loan. Even jumbo mortgages and private loans have made a comeback.

However, the FHA loan remains in high demand. It's combination of low rates, low downpayment, and flexible guidelines has made it one of most common loan choices for home buyers today.

There are benefits to choosing an FHA loan. Here are some of the biggest.

FHA Mortgage Insurance Premiums

It may seem odd to call FHA mortgage insurance a benefit since it doesn't come free, however, FHA MIP is what makes the program possible. Without the MIP, FHA-approved lenders would have little reason to make FHA-insured loans. However, as a homeowner or home buyer, you have ways to limits your FHA MIP costs. You can use a 15-year mortgage term, for example; or make a downpayment of at least 5 percent. As a bonus perk, FHA-backed homeowners with loans from before June 2009 get access to special reduced MIP rates. Get today's rates to see the reduced MIP.

FHA Allows A 3.5% Downpayment

For today's home buyers, there are only a few mortgage options which allow for downpayments of five percent or less. The FHA is one of them. With an FHA mortgage, you can make a downpayment as small as 3.5%. This benefits home buyers who don't have a lot of money saved up for downpayment; and, home buyers who would rather save money for moving costs, emergency funds, or other needs.

FHA Allows 100% Gift Funds

The FHA is aggressive with respect to gifts for downpayment. Very few loans programs will allow your entire downpayment for a home to come from a gift. The FHA will. Via the FHA, your entire 3.5% downpayment can be a gift from parents or another relative, an employer, an approved charitable group, or a government homebuyer program. If you're using a downpayment gift, though, you'll need to follow the process. Click here for a mortgage rate and to request an FHA gift letter.

The FHA Doesn't Require A SSN

Not every home buyer will have a valid social security number and, according to the FHA, that's okay. FHA guidelines permits loans to employees of the World Bank and foreign embassies, for example. The FHA will also insure loans for non-permanent resident aliens.

There Are Many FHA-Approved Lenders

FHA loans can be funded by any FHA-approved lender. This includes mortgage lender, savings-and-loans institutions, and credit unions. The marketplace for FHA loans is giant, which creates competitive pressure among lenders to offer low FHA rates and low FHA fees. It pays to "shop around" on an FHA loan. Furthermore, because different banks use different methods to underwrite, your FHA loan can be declined by Bank A but approved by Bank B. If you meet the rules of the FHA, you can apply until your loan get approved! Click here to get some of today's low FHA rates.

There Are Many FHA Loan Products

Via the FHA, you can get a mortgage of almost any type. The agency is best-known for its traditional 30-year fixed-rate mortgage, but the FHA also offers a 15-year fixed rate loan as well as a series of adjustable-rate mortgages (ARMs). In addition, the FHA insures purchase-and-improvement loans for when you want to buy a home that needs repairs; 203k construction loans for when you want to buy a home that's newly built; and energy-efficiency loans for when you want to finance the costs of energy-efficiency improvements into your loan. The FHA also provides a full line of FHA refinance products.

The FHA Insures All Property Types

FHA home buyers are able to purchase any home type in any U.S. neighborhood -- whether in the 50 United States, the District of Columbia, or any U.S. territory. The FHA will insure single-family detached homes, 2-unit homes, 3-unit homes, 4-unit homes, condominiums, mobile homes and manufactured homes.

The FHA Has Flexible Credit Standards

Of all the available loan types in today's U.S. market, FHA loans are among the most forgiving with respect to credit standards. The FHA does not require "perfect credit" and even instructs its approved lenders to look beyond isolated "credit events" and to consider a borrower's complete credit history. Even borrowers with a recent foreclosure, short sale, deed-in-lieu or bankruptcy can be eligible for FHA financing. Mandatory 3-year waiting periods do not exist with an FHA loan.

The FHA Allows Larger Loan Sizes

A "loan limit" is the maximum allowable loan size for an area and, as another FHA benefit,FHA loan limits are much higher than conventional loan limits in many parts of the country. In Orange County, California, for example, or New York City, the FHA will insure up to $729,750. By contrast, conventional loans stop at $625,500. For 2-unit, 3-unit and 4-unit homes, FHA loan limits are even higher -- ranging up to $1,403,400.

FHA Loans Are Assumable

A little-known FHA benefit is that the agency will allow a home buyer to "assume" the existing FHA mortgage on home being purchased. The buyer must still qualify for the mortgage with its existing terms but, in a rising mortgage rate environment, it can be attractive to assume a home seller's loan. 5 years from now, for example, a buyer of an FHA-insured home can "inherit" a seller's sub-4 percent mortgage rate.

How Much FHA Loan Can You Afford?

The FHA mortgage program accounts for a significant share of U.S. home buyer loan activity and, during the first three month of 2013, the typical FHA loan averaged 94% loan-to-value. The program is in high demand among low-equity homeowners and buyers.

See what an FHA loan can do for you. Get today's interest rates. Find out how much home you can afford .

Click here for today's FHA mortgage rates.

Contact The Mortgage Mark with any Questions!  www.themortgagemark.com  

mark@themortgagemark.com 

HARP 3.0 : Homeowners Prepare For HARP 3 Passage As HARP 2 Mortgages Slow

New data from the Mortgage Bankers Association (MBA) shows that mortgage refinances are slowing. It's a function of rising rates.

However, even as U.S. mortgage rates rise, demand for the Home Affordable Refinance Program (HARP) remains strong. There are millions of still-eligible U.S. households and many have chosen to their HARP loan while they still can. 

Through the first five months of 2013, HARP loan closings increased 60% as compared to the same period during the year prior. Furthermore, should the much-anticipated HARP 3.0program pass Congress, that figure could double, triple or more.

There is a nationwide demand for HARP 3.0. Homeowners hope to see the program by September.

Jump to today's HARP mortgage rates.

What Is The HARP Home Loan Program?

HARP is an acronym. It stands for Home Affordable Refinance Program. It's a government-backed mortgage refinance program first released in March 2009 and meant to U.S. homeowners get access to the low mortgage rates of the day.

The stated goal of the Home Affordable Refinance Program program was two-fold.

First, the government aimed to help the average U.S. homeowner save $3,000 annually via refinance. Second, the government aimed to reach seven million U.S. households.

If consumers could reduce their housing payments by $21 billion each year, the government reasoned, some of that saved money would work its way back into the U.S. economy which would help combat the burgeoning economic pullback.

Via HARP, homeowners whose homes had lost equity since the date of purchase were eligible for refinance despite having little or no home equity left. This was a big deal in 2009. Homes in many metropolitan areas were losing 10% or more of their value annually.

Within 12 months of its launch, it was clear that the "Obama Refi" program would achieve its first goal. Eligible homeowners were saving large amounts of money on their mortgage. However, the program was failing to meet its second goal.

By mid-2011, the Home Affordable Refinance Program had not even helped one million U.S. households, let along multiple millions. So, to put the program within reach of more people, the government made aggressive changes to how the Home Affordable Refinance Program program worked.

Dubbed "HARP 2", program updates included :

• Remove loan-to-value limitations; allow unlimited LTV for HARP loans
• Remove specific lender liabilities on a HARP-refinanced loans

Under HARP 2, the pace of refinancing tripled. Homeowners saved even more than the government's vaunted $3,000 target figure. The typical HARP homeowner saved 35 percent monthly.

Today, HARP 2 is on pace to top 1 million closings for the year. That tally may leap, though, if HARP 3.0 passes Congress as expected.

HARP Helping "Severely Underwater" Homeowners

As part of HARP 2.0, program guidelines allowed for an unlimited loan-to-value (LTV). It's no surprise, then, that one-in-four HARP home loans feature an LTV over 125%.

There are other interesting refinance patterns among the Home Affordable Refinance Program closings, too.

For example, in May, 25% of homeowners opted for a 15-year fixed rate or 20-year fixed rate HARP loan -- both of which can replace lost home equity more quickly than a comparable 30-year loan.

There were other notable data points, too :

• 20% of all May U.S. refinance activity was Home Affordable Refinance Program-related.
• Nearly 40% of all Home Affordable Refinance Program loans have an LTV over 105%.
• Fannie Mae securitizes 59% of May's HARP 2 loans. Freddie Mac handled 41%.

Furthermore, HARP loans remain concentrated by state. Nevada, Arizona and Florida account for a disproportionate number of high-LTV loans. Prior to HARP 2.0, these refinance opportunities did not exist.

If HARP 3.0 passes Congress this year, the distribution of HARP home loans will spread geographically. It's part of what the White House calls "A Better Bargain".

Click here to see today's HARP mortgage rates.

Are You HARP-Eligible? Automate The Process.

To date, the Home Affordable Refinance Program has reached 38% of its intended 7-million-home market. With the program slated to end December 31, 2015, it seems more and more likely that HARP 3 will pass. Rumors grow louder each month.

See how HARP program can save money. See for what rates you qualify. The process is fast and free.

Click here for more HARP-related information.

Contact The Mortgage Mark with any questions!   www.themortgagemark.com   Mark@themortgagemark.com  

Reasons Why VA Loan Applicants Love The VA Appraisal Process

With mortgage rates low and home sales rising, the VA home loan is an important part of the U.S. housing landscape. For eligible military borrowers, the VA program provides a host of borrowing benefits.

The VA appraisal is one of them.

Click here for today's VA mortgage rates.

20 Million VA Loan Guarantees And Counting

VA loans are mortgage loans guaranteed by the Department of Veterans Affairs, where "guarantee" means that the VA reimburses lenders against loss should a home go into short sale or foreclosure.

When it was initially launched in 1944 as part of the G.I. Bill of Rights, VA loans were meant to help returning servicepersons assimilate into "civilian life".

Since its inception, the VA has guaranteed more than 20 million loans.

The VA Home Loan Guaranty program helps to make homes affordable for eligible military borrowers by reducing downpayment requirements, softening qualification standards, and eliminating the need for monthly mortgage insurance, which helps to keep monthly payments low.

Furthermore, the VA makes refinancing simple.

Via its Interest Rate Reduction Refinance Loan (IRRRL), the VA backs the simplest and quickest streamline refinance available. With the "VA Streamline Refinance, there are no credit checks, no employment verifications and no debt-to-income ratios to satisfy.

All it takes to qualify for the IRRRL is a strong payment history and proof that there's a benefit with the refinance. This can include lowering your monthly mortgage payment, or switching from an ARM to a fixed rate loan.

Another VA loan benefit is its appraisal program. Different from the manner in which the FHA and both Fannie Mae and Freddie Mac conduct appraisals, the Department of Veterans Affairs uses its appraisal process to verify the home's value and to make sure that the home's condition is livable.

Here are a few quick facts about the VA loan appraisal program.

Click here for today's VA mortgage rates.

VA Appraisals Protect The Homeowner

Appraisals for VA loans go deeper than appraisals for other popular loan types. Among the differences, there are several which stand out.

VA appraisers are assigned at random

When a VA appraisal is commissioned by your lender, the job is assigned via the VA's central appraisal system. The VA's appraisal system assigns appraisers on a rotating, randomized basis. In this way, appraisers have little direct contact with lenders which helps to assure autonomy and independence.

In addition, appraisers with a heavy workload may be less likely to be assigned to your home which can help to improve appraisal completion times. Faster appraisal turnarounds can be correlated to faster closings.

VA appraisal costs are assigned by the VA -- not your lender

The VA allows buyers to purchase homes with no money down and permits certain closing costs to be added to the buyer's loan size. Appraisal costs, however, are often excluded; appraisals must be paid with savings.

To protect home buyers, the Department of Veterans Affairs enforces a VA appraisal fee schedule so you can feel safe in knowing that your appraisal costs are fair and reasonable.

Note that the VA Streamline Refinance does not require an appraisal. There are no appraisal costs associated with a VA-to-VA loan refinance.

VA appraisers will inspect your home for defects

Another main difference between VA appraisals and the appraisals required for other loan types is the depth of work required. VA appraisers are instructed to inspect and comment on a home's safety rankings and the status of its "working parts".

For example, as part of the process, the VA appraiser will perform home inspection-like duties which include a review the home's mechanical systems; its foundation; its gutters and downspouts; and, its plumbing. The appraiser will also check for carbon monoxide detectors.

The VA appraisal can help to identify potential defects in a home, but it should not be used in lieu of an actual home inspection. Buyers should always commission a home inspection separately.

Don't like your VA appraisal? You can contest it.

Appraisers make mistakes and the Department of Veterans Affairs knows it. This is why the VA employs a formal appraisal review process to which any home buyer or REALTOR® can post.

The VA calls it a Reconsideration of Value and it's most-commonly used when the appraised value of a home is less than its agreed-upon sale price. With other loan type, this scenario can "kill the deal". With the VA loan, it's just a starting point.

No evidence is needed to submit a Reconsideration of Value although providing comparable sales data and relevant market information for the home can be a help. Reviews are always fair and balanced.

Another VA Benefit : Great Mortgage Rates

For VA buyers, the appraisal process offers fairness and protection. It's another perk of the mortgage program used more than 20 million times since its inception.

If you're an eligible VA borrower, take a look at today's VA mortgage rates. Pricing is great and fees are often lower than for comparable fixed- and adjustable-rate mortgages. See how a VA loan fits your budget.

Click here for today's VA mortgage rates.

Contact The Mortgage Mark with any questions!!!   http://www.themortgagemark.com

mark@themortgagemark.com

The 10 Biggest Benefits Of A VA Loan, Plus Today’s VA Mortgage Rates

Multiple loan "programs" exist for today's home buyers. Some programs are backed by the U.S. government and some are backed by individual banks. All, however, can help you meet your mortgage loan needs. 

One loan type stands apart, though, for its combination of low rates, aggressive underwriting and secondary benefits to borrowers.

That program is the VA loan. Click here for VA mortgage rates.

VA Loan : Better Than FHA And Conventional?

Backed by the U.S. Department of Veterans Affairs, VA loans are designed to help active-duty military personnel, veterans and certain other groups become homeowners at an affordable cost. The VA loan asks for no down payment, requires no mortgage insurance, allows flexible guidelines for qualification among its many other advantages.

Here's an overview of the 10 biggest benefits of a VA home loan.

1. No Downpayment

Most home loan programs require you to make at least a small downpayment to buy a home. The VA home loan is an exception. Rather than paying 5, 10, 20 percent or more of the home's purchase price upfront in cash, with a VA loan you can finance up to 100 percent of the purchase price. The VA loan is a true no-money-down opportunity.

2. No Mortgage Insurance

Typically, lenders require you to pay for mortgage insurance if you make a downpayment that's less than 20 percent. This insurance, referred to as private mortgage insurance (PMI) for a conventional loan or a mortgage insurance premium (MIP) for an FHA loan, protects the lender in the event that you default on your loan. But a VA loan neither a no down paymentnor mortgage insurance. That makes this a VA-backed mortgage very affordable upfront and over time.

3. Government Guarantee

There's a reason why the VA loan comes with such favorable terms. The federal government guarantees that a portion of the loan will be repaid to the lender even if you're unable to make monthly payments for whatever reason. This guarantee encourages and enables lenders to offer VA loans with exceptionally attractive terms to borrowers that want them.

4. Ability To Shop and Compare

VA loans are neither originated nor funded by the VA. Furthermore, mortgage rates for VA loans aren't set by the VA itself. Instead, VA loans are offered by U.S. banks, savings-and-loans institutions, credit unions and mortgage lenders -- each of which sets its own VA loan rates and fees. This means you can shop around and compare loan offers and still choose the VA loan that works best for your budget.

5. No Prepayment Penalty

A VA loan won't restrict your right to sell your home if you decide you no longer want to own it. There’s no prepayment penalty or early-exit fee no matter within what time frame you decide to sell your home. Furthermore, there are no restrictions regarding a refinance of your VA loan. You can refinance your existing VA loan into another VA loan via the agency's Interest Rate Reduction Refinance Loan (IRRRL) program or switch into a non-VA loan at any time.

6. Loan Options

A VA loan can have a fixed rate or an adjustable rate. It can be used to buy a house, condo, new-built home, manufactured home, duplex or other types of properties. Or it can be used to refinance your existing mortgage, make repairs or improvement to your home or even make your home more energy efficient. The choices are yours. A VA-approved lender can help you decide.

7. Easy To Qualify

Like all mortgage types, VA loans require specific documentation, an acceptable credit history and sufficient income to make your monthly payments. But, as compared to other loan programs, VA loan guidelines tend to be more flexible. This is made possible because of the VA loan guaranty. The Department of Veterans Affairs genuinely wants to make it easier for you to buy a home or refinance.

8. Lower Closing Costs

The VA limits the closing costs lenders can charge to VA loan applicants. This is another way that a VA loan can be more affordable than other types of loans. Money saved can be used for furniture, moving costs, home improvements or anything else.

9. Funding Fee Flexibility

VA loans require a "funding fee", an upfront cost based on your loan amount, your type of eligible service, your down payment size plus other factors. Funding fees don't need to be paid as cash, though. The VA allows it to be financed with the loan, so nothing is due at closing. And not all VA borrowers will pay it. VA funding fees are normally waived for veterans who receive VA disability compensation and for unmarried surviving spouses of veterans who died in service or as a result of a service-connected disability.

10. Assumable Financing

Most VA loans are "assumable," which means you can transfer your VA loan to a future home buyer if that person is also VA-eligible. Assumable loans can be a huge benefit when you sell your home -- especially in a rising mortgage rate environment. If your home loan has today's low rate and market rates rise in the future, the assumption features of your VA become even more valuable.

Click here for VA mortgage rates.

Compare VA Mortgage Rates 

The eligibility list for a VA loan is long. Classes and classes of servicepersons and their families are eligible.

Whether you're an active-duty serviceperson, a veteran, a member of the National Guard, a Reservist or surviving spouse of a veteran; or if you're a cadet at the U.S. Military, Air Force or Coast Guard Academy, midshipman at the U.S. Naval Academy or officer at the National Oceanic & Atmospheric Administration, you may be eligible for a VA loan -- plus all the benefits that come with it.

See today's VA mortgage rates and compare your VA offers.

Contact The Mortgage Mark with any questions!   www.themortgagemark.com   Mark@themortgagemark.com 

Can You Get A VA Loan For A Condo?” And Other VA Property-Type Questions

Can You Get A VA Loan For A Condo?” And Other VA Property-Type Questions

In today's housing market, there are tens of "home types" from which a buyer can choose. Among the most common are condos, single-family homes, and multi-unit properties. The list of "most obscure" includes geodomes, log cabins, and homes carved into a mountain.

For military borrowers, it's important to know which homes are lendable via the VA loan program. Not all property types will secure a bank's final VA approval.

The Department of Veterans Affairs is explicit regarding allowable property types. Here's what you need to know.

Skip to today's live VA mortgage rates.

VA Loans : Most Home Types Eligible For Financing

VA loans are special, government-backed mortgages, first available via the G.I. Bill in 1944. VA loans were created to help military veterans transition from war and into homeownership, among other reasons.

Nearly 80 years later, the program still offers subsidized mortgage rates and reduced underwriting standards, which has resulted in more than 20 million total VA loan closings.

VA loans can be applied to many specific home types. For example, a VA loan can be used to:

• Buy an existing house or condo
• Buy a house or condo that's being newly built
• Buy a duplex, triplex or four-unit property

VA loans can also be used to buy a manufactured home or to buy a lot for a manufactured home. However, in order to be VA-eligible, a manufactured home, whether existing or new, must be classified and taxed as real estate, specifically. It also must be affixed to a permanent foundation and comply with your local building codes and zoning laws.

A manufactured home can be VA-eligible even if the home or foundation isn't ready yet.

Furthermore, for the above property types, VA loans can be used to make home repairs or improvements, and to make energy-efficiency improvements to a home.

To be VA-eligible, homes for purchase or refinance must be located in the United States or a U.S. territory or possession, such as Puerto Rico, Guam or the U.S. Virgin Islands. Properties in foreign countries aren't eligible for VA loan approval.

Click to see today's live VA mortgage rates.

Occupancy Rules For VA Loans

Like all mortgage types, VA loans carry occupancy standards.

For example, if you want to buy a home with a VA loan, you'll have to certify that you -- or your spouse -- will occupy the home as your primary personal residence. This means that you intend to live in the home.

If you're buying a 2-unit, 3-unit or 4-unit property, you will need to live in one of the two, three or four units.

The VA occupancy requirement does not mean you'll have to live in the home forever, or even for as long as you keep your VA loan. It's enough that you intend to occupy the home, move in after your purchase closing settlement, and continue to live in the home for some period of time.

The exception to the VA's occupancy rules is for refinances via the Interest Rate Reduction Refinance Loan (IRRRL). Also known as the VA Streamline Refinance, the IRRRL program allows for vacation homes and investment properties. The only VA occupancy requirement is that you did live in the refinanced home at some time in the past.

Click to see today's live VA mortgage rates.

VA Loan Appraisals And Inspections

Lastly, for all VA-approved properties, a specific VA home appraisal is required.

As part of the VA approval process, a property appraiser will tour the subject home's interior and exterior, then compile a valuation report known as an appraisal. The appraisal is submitted directly to your lender who can then forward the appraisal to you upon request.

The property's appraised value is important because it's used as collateral for your loan.

As part of the appraisal process, an appraiser may identify major faults within the home and recommend that repairs be made. A "major fault" includes a broken roof, faulty electric wiring, or any other defect which may adversely affect the value of the home.

Minor repairs such as "a missing screen window" are not part of the appraisal process and, because your home appraisal is not a substitute for a home inspection, it's recommended that you commission a home inspection from a reliable home inspector.

The home inspector's report will address your home's major components, such as the plumbing, heating and cooling, and electrical systems and the roof. Your REALTOR® can typically make a home inspection referral, if you don't know who's best for the job.

Get Today's VA Mortgage Rates

VA loans offer a lot of benefits as compared to conventional financing and FHA-backed loans. Via the VA, there's no down payment required, there's never any mortgage insurance to pay and underwriters allow for flexible qualification standards.

In addition, because they're government-subsidized, VA loans can offer lower interest rates and closing costs than other loan types. If you're eligible for a VA loan, it's worth considering for any specific "home type".

Click here for VA mortgage rates as of  today.

Contact The Mortgage Mark with any questions!  www.themortgagemark.com   mark@themortgagemark.com 

How To Formally Appeal Your VA Home Loan Appraisal Using “Reconsideration Of Value”

Among the benefits of buying a home with a VA mortgage is that there's a formal appraisal review process built right into underwriting. It's called a Reconsideration of Value and it may be invoked by either the buyer or seller in a VA purchase transaction.

The Reconsideration of Value is used when the appraised value of a home is less than its contracted purchase price.

With an FHA or conforming mortgage, scenarios in which a home fails to appraise for its purchase price often result in canceled contracts. This happened with 1 in 3 sales contracts in early-2012, according to the National Association of REALTORS®.

With a VA loan, the contract is much less likely to break.

Click here for today's VA mortgage rates.

Building a VA Appraisal Appeal

When a VA appraisal fails to meet the home's purchase price, the buyer or seller party may request a formal Reconsideration of Value.

The Reconsideration of Value process is not like asking for a second opinion; there is no new appraisal performed, nor is there an opportunity to use a "different appraiser". Rather a Reconsideration of Value is about presenting facts that may have been overlooked or omitted by the original home appraisal.

With a request made in writing to the lender, parties to the purchase may challenge the appraisal and its findings.

Common challenges to an appraisal include :

• Additional comparable homes which were not used in the initial appraisal
• Data on why specific comparable homes should not have been in the appraisal
• Errors in square footage, room count or school district
• Errors in upgrades, age, or condition which may have an effect on value adjustments

Buyers or sellers may also submit a Comparative Market Analysis (CMA), if desired. In general, the more relevant, supporting documentation the parties can provide to the original appraiser, the more likely that the Reconsideration of Value will have a positive outcome.

To start with the Reconsideration of Value process, speak with your lender.

Click here for today's VA mortgage rates.

Reconsideration Of Value : How Claims Are Handled

When a Reconsideration of Value is received by the lender, there are two potential courses of action, depending on the severity of the request.

For appraisal appeals in which the requesting party seeks less than 10% in valuation change, the mortgage lender will review the request, then forward it to the original VA appraiser, along with all submitted, supporting documentation. The original appraiser will then consider the request and either increase the appraised value, or leave it as-is.

Note that the appraiser is under no obligation to raise the appraised value, and may respond to your request with a letter explaining why the original value is valid and correct. If this happens, a second Reconsideration of Value may not be submitted.

However, if the requesting party seeks a valuation change of 10% or more, the mortgage lender will skip the original appraiser as part of the review process and will forward the Reconsideration of Value request direct to the Department of Veterans Affairs.

There, an agency staff member will review the original appraisal and the submitted, supporting documentation, and will issue a revised value. Note that there is no guarantee that the revised value will be different from the appraiser's original appraised value.

In this instance, again, a second Reconsideration of Value may not be submitted.

Note that a Reconsideration of Value may not be used to override an appraiser's opinion of minimum property requirements -- health and safety standards meant to ensure that veterans purchase "move-in ready" homes.

VA Loans : 100% Financing, No Mortgage Insurance

VA mortgages offer more benefits to military borrowers than just the Reconsideration of Value appraisal review process.

Home buyers using a VA mortgage can also :

• Buy homes with zero downpayment and pay no annual mortgage insurance
• Refinance via the VA IRRRL program -- the easiest refinance program available
• Get access to mortgage rates which are often lower than comparable conforming rates

It's no wonder that military loans reached an 18-year high in 2012 -- the program is easy, accessible, and home buyer-friendly. Get started with a VA rate quote today. See what a VA loan can do for your purchase.

Click here for today's VA mortgage rates.

Contact The Mortgage Mark with any questions!!   www.themortgagemark.com   mark@themortgagemark.com