[quote=HLS][quote=bearishgurl]HLS, I’d be interested to know what the closing costs will be on the *new* mortgage loan you described in the OP :=0[/quote]
There is a pricing factor to compensate for the risk, so there is a choice with this loan AND VA to choose a rate
that has a rebate that will cover all the closing costs.
It’s simply risk based.
VA funding fee is not the same for every veteran.
The 2% fee does not have to be paid by seller nor paid in cash by the buyer, above market rate can cover it all.
According to the media, it’s hard to qualify for a loan.
This is utter nonsense. In some ways it’s easier than ever, especially for people who can barely afford to buy a house, as long as they qualify for the program.
easiest for W2 Salaried employees.
Harder for self employed, contract workers, and those who need commission, bonus or overtime pay to qualify.
Regardless of credit scores.
$1 million dollars in the bank makes it no easier to qualify for a conventional loan. Verified monthly income & expenses ON A CREDIT REPORT matter. Lots of monthly expenses aren’t on a credit report.
I priced out a scenario and it looks like 4.00% rate covers the pricing hits and gets the 2% down payment from the lender, vs. 3.375%-3.50% with 20% down.
1% down with 4.00% 30yr rate… it’s better than nothing down and a 6.50%+ rate in 2006
I don’t like that it inflates the bubble.[/quote]This is what I was afraid of, HLS. A LOT of people (W-2/Military) look “good enough” on paper to qualify for much more home loan than they should be taking out, given the size of their families and all their other financial obligations. The VA has had a ton of foreclosures in the past (even in the ’80’s and ’90’s) and “nothing down” along with a change of duty station, slight downturn in the market, ONE bad tenant, too many weeks/months between tenants, etc, caused the borrowers to default, ESPecially if they had homeowner assn dues to pay as well. And almost all of these “circumstantial landlords” were “upside down” every month. I can’t tell you how many veterans I’ve known over the years who lost their VA loan eligibility forever because they quickly defaulted on a SD County home which they should have never purchased. When they eventually retired back to Pudunk, USA (where they were from and where houses are relatively cheap), they didn’t have their VA eligibility to use and so lost that option at at time when they were finally stable enough in life to use it and needed it most.
I volunteered for the Navy Relief Society for about 14 mos back in the late ’80’s. I know the pay/benefits are much better now but I can honestly say that the vast majority of (enlisted) Navy families live paycheck to paycheck and are perpetually in debt over small problems such as vehicle repairs (so the sponsor can get to work). Many of these families often run out of food before they get paid again.
Based on your post, I’m going to assume that a $417K mortgage loan on the *new* 1%/3% FF loan program costs at least $12K to close. Please correct me if I’m wrong on this :=0
