Maximize Your Financial Future: Top 10 VA Home Loan Benefits for Veterans

For veterans, the VA home loan benefit is not just another mortgage option; it’s a ticket to securing a prosperous financial future. If you’re a veteran, here’s a list of the top 10 benefits of VA home loans that you should be aware of:

1. Evergreen Benefit:

Your VA home loan benefit is timeless; it doesn’t expire. Even if you’ve never tapped into it, it’s always there waiting for you. Considering that only 13% of veterans have used it while 80% are homeowners, there’s ample opportunity.

2. Zero Down Payment:

Buying a home through the VA mortgage means you won’t have to make a down payment. This gives you the financial flexibility to make other improvements or save that money for other expenses.

3. No Mortgage Insurance:

Unlike conventional mortgages that require mortgage insurance (ranging from .45% to over 1% of the mortgage balance), VA home loans come without this added cost.

4. Competitive Rates:

VA home loan rates typically tend to be at least 0.25% lower than conventional loans. This can mean significant savings over the life of your mortgage.

5. Multiple Uses:

While VA home loans are designed for primary residences, you cannot use the benefit once. If circumstances change, and you move or pay off your mortgage, the VA loan benefit resets for you to use again.

6. Partner with VA-specialized Lenders:

The VA provides a guarantee, not the loan itself. This means you can choose a local mortgage broker, preferably one with a Certified Veteran Loan Specialist designation, ensuring a tailored experience.

7. Streamlined Refinancing:

Along with the VA Interest Rate Reduction Refinance Loan (IRRRL), you can refinance seamlessly without needing pay stubs or appraisals if interest rates drop.

8. Comprehensive Cash-out Option:

Already have a VA home loan? Refinancing allows you to cash out up to 100% of your home’s value. Whether for college tuition, home enhancements, or other needs, the VA cash-out mortgage covers you.

9. Flexible Credit Requirements:

Good credit is beneficial but optional. VA home loans offer flexibility, allowing for past financial hiccups, like bankruptcies, depending on the lender’s discretion.

10. No Loan Limits from 2020:

Previously, places like Los Angeles and Orange Counties had a VA mortgage limit of $726,525. From January 2020, these limits were removed. This means your dream home, irrespective of its price tag, can be bought using the VA home loan benefit if you meet the lender’s financial criteria. Furthermore, veterans can purchase multi-unit properties, live in one, and rent out the rest, with VA loans covering properties with up to four units.

VA home loans offer a golden opportunity for veterans to secure their financial futures. Partnering with a professional who understands the VA home loan program and the unique needs of veterans is a step towards building that future.

15-Year vs. 30-Year Jumbo Mortgage: Making the Right Decision

In the luxury housing market, jumbo mortgages are standard. But the dilemma remains: Should one opt for a 15-year or a 30-year jumbo mortgage? Each option presents unique advantages and challenges. Let’s dive deep into this decision-making process.

15-Year Jumbo Mortgage – The Faster Route:

Key Benefits:

  1. Quick Ownership: One of the most apparent advantages is that your home gets paid off in half the time compared to a 30-year mortgage.
  2. Less Interest Over Time: Using our example of an $800,000 jumbo mortgage on a $1 million property, a 3.5% interest rate on a 15-year mortgage would result in you paying around $229,249 in interest over the loan’s lifetime.

30-Year Jumbo Mortgage – The Long Haul:

Key Benefits:

  1. Lower Monthly Payments: With the same $800,000 jumbo mortgage, the 30-year option at a 4.125% interest rate gives you nearly $2,000 less monthly payments than the 15-year counterpart.
  2. More significant Interest Costs: However, for 30 years, you’d pay roughly $595,720 in interest.
  3. Opportunity to Invest the Difference: One intriguing advantage of opting for a 30-year plan, even if you can afford the 15-year payments, is the potential of investing the monthly savings. Using our example, funding the monthly savings of $2,000 at a 6% average rate of return could accumulate to a staggering $2,031,378 over 30 years.

The Variable – JUMBO ARMs

Understanding JUMBO ARMs:

  • Jumbo Adjustable Rate Mortgages (ARMs) often sport lower interest rates than both 30-year and 15-year fixed jumbo mortgages.
  • While these loans amortize fully, they only fix their rates for initial periods (like 5, 7, or 10 years), after which they adjust. This can be a boon for those who plan to refinance or sell before the adjustable period kicks in, leading to substantial savings in interest.

How to Decide?:

Key Considerations:

  1. Future Plans: Will you live in the house long-term or see it as a short-term asset?
  2. Financial Strategy: Are you more interested in quick ownership and saving on interest, or are you eyeing potential investment opportunities with monthly savings from lower payments?
  3. Market Predictions: How do you anticipate the market will behave, especially if considering a JUMBO ARM?

Whether you lean towards a 15-year or a 30-year jumbo mortgage, the choice hinges on your financial situation, goals, and market predictions. Discussing these factors with a financial advisor can shed more light, ensuring you make a decision that aligns best with your future aspirations.

Are You Considering Using Short-Term Rental Income To Qualify For a Refinance Say VRBO or AirBnB anytime soon?

In today’s digital age, platforms like Airbnb and VRBO have revolutionized the real estate sector, offering homeowners a lucrative avenue: short-term rentals. The ability to earn from temporary tenants is changing how we view property income and shifting paradigms in the mortgage refinance world.

Decoding Short-Term Rental Income:

What Constitutes Short-Term Rental Income?

  • It refers to the revenue gleaned from renting out properties for brief periods – a day, week, or month. This could stem from a standalone unit on your property or your primary residence during your travel sabbaticals.

Popular Platforms Driving This Trend:

  • Names like VRBO, Airbnb, and HomeAway are at the top of this revolution, providing homeowners with streamlined platforms to monetize their spaces.

The Evolution of Mortgage Lending Perspective:

A Former Stumbling Block:

  • Historically, mortgage lenders only universally embraced short-term rental income as a legitimate form of income for refinancing, primarily due to the absence of conventional lease agreements.

Tides of Change:

  • Recognizing the ubiquity of short-term rentals, many lenders have evolved their criteria. Notably, Airbnb and VRBO took proactive measures in 2019, allying with major mortgage financiers, enabling hosts to leverage their rental income when seeking mortgage refinancing.

The Current Landscape and The Importance of Expertise:

A Spectrum of Acceptance:

  • While the industry has seen significant shifts, not all lenders are on board. The acceptance of short-term rental income varies, especially when considering traditional mortgage products like 30-year or 15-year fixed-rate refinances.

Strategizing with Expertise:

  • If you’re among the cohort of homeowners who use short-term rentals to subsidize your mortgage and are pondering a refinance, it’s pivotal to consult a seasoned mortgage specialist. Their insights can optimize your application process, ensuring alignment with lenders attuned to the modern dynamics of short-term rental income.

The fusion of technology, evolving consumer behaviors, and progressive lending practices has catalyzed a seismic shift in how we perceive property income and mortgage refinancing. By staying informed and leveraging expertise, homeowners can seamlessly navigate this intersection, realizing their financial goals.