Brand New 1% down payment purchase loans

[FlyerInHi]

[quote=HLS]
IMO anyone who has been within 1000 miles of Afghanistan or Iraq deserves to be able to buy a house in America with no money down.[/quote]

err… isn’t that social engineering?

Why not pay a competitive wage without all the ancillary benefits that require huge bureaucracies and let the market decide? Up the wages if not enough people apply. And lower wages when there are too many applicants.

[bearishgurl]

[quote=FlyerInHi][quote=HLS]
IMO anyone who has been within 1000 miles of Afghanistan or Iraq deserves to be able to buy a house in America with no money down.[/quote]

err… isn’t that social engineering?

Why not pay a competitive wage without all the ancillary benefits that require huge bureaucracies and let the market decide? Up the wages if not enough people apply. And lower wages when there are too many applicants.[/quote]err… FIH?? I take it you have never been in the military. If you had, you would know that while an active servicemember, your a$$ does not really belong to you :=0

[FlyerInHi]

[quote=bearishgurl]err… FIH?? I take it you have never been in the military. If you had, you would know that while an active servicemember, your a$$ does not really belong to you :=0[/quote]

In an all volunteer military, your ass does belong to you.

When there was a draft, VA benefits made sense. Not anymore.

[spdrun]

^^^

So actually pay/pension soldiers enough to get good medical insurance after they retire, buy a home, etc. Why create a bureaucracy when it might be cheaper to simply pay a wage that reflects the hardships of the profession?

[bearishgurl]

[quote=spdrun]^^^

So actually pay/pension soldiers enough to get good medical insurance after they retire, buy a home, etc. Why create a bureaucracy when it might be cheaper to simply pay a wage that reflects the hardships of the profession?[/quote]They don’t pay wages reflecting those hardships BUT a service member stationed in a “dangerous area” does get a stipend for working in a danger zone ONLY WHILE stationed there. They DO get a housing allowance (and COLA, if applicable) if they have a spouse and/or minor children and are not offered a military housing unit OR do not elect to take one. The housing allowance is now about four times the size it used to be BUT it still does not keep up with current rents PLUS utilities in a high-cost area such as SD County. If they elect to apply for military housing, it is offered to them and they accept the quarters, all utilities are paid except landline phone and cable TV/Internet inside the unit.

Their retirement pay is based upon their base pay only, with no allowances, COLAs or extra pay for working in dangerous areas factored into the calculation.

The current housing allowances would be instrumental in helping a servicemember pay PITI BUT if they lived in government quarters, they wouldn’t have ANY housing expenses except for TV/internet/phone (if desired). Most of them stationed in SD County elect this option, especially those families whose sponsor’s pay grade is E6 or below.

If the service member is single or unaccompanied (their spouse and/or children are living in a locale other than their current duty station), they will be offered shipboard quarters or “barracks” (now modern high-rise apts at NavSta SD, with one or more roommates).

[FlyerInHi]

BG, all the details are irrelevant. People know what they sign up for. There’s an argument for letting the markets decide, especially if you believe the markets should decide. People tend to sign up during times of conflict. If they do, then they see the value, notwithstanding the potential dangers.

[bearishgurl]

[quote=FlyerInHi]BG, all the details are irrelevant. People know what they sign up for. There’s an argument for letting the markets decide, especially if you believe the markets should decide. People tend to sign up during times of conflict. If they do, then they see the value, notwithstanding the potential dangers.[/quote]A lot of people sign up before or after graduating from HS for Veteran’s benefits to later attend college. Their families can’t afford to send them to college and there are no living-wage jobs within a 50 mile radius of where many of these kids/new enlistees grew up. They want to “see the world” and eventually go to college, and for many, the military is the only way out of their hometown. I don’t think very many of them sign up with a plan to make a career out of the military. The decision to continually re-enlist evolves as they get trained and experience different duty stations.

[bearishgurl]

“Military duty” isn’t the same as a job gotten on the “open market.” A servicemember stands 24-hour duty routinely and never gets paid overtime. They are sometimes called to show up at their duty station on the spur of the moment, in uniform for impromptu exercises. Their seabag (Navy and Marines) must always be fully packed and ready to take with them at any time. US labor laws do not apply to military personnel. If they are sick, they must report to work, anyway (even if they have to be brought in), unless they are in the hospital. They will be taken care of at work if they are really sick. As I stated, when one is an active-duty military member, their azz really does not belong to them.

[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.

[FlyerInHi]

Ok, BG. But it’s nothing the right amount of money can’t fix.

Unless you consider it a jobs program and “social engineering” as some might put it.

Milton Friedman is the one who suggested we should apply economics and recruit a military through the normal labor markets. So a soldier is just a employee who gets paid a fair wage, commensurate with the working conditions.

[bearishgurl]

[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

[spdrun]

Verified monthly income & expenses ON A CREDIT REPORT matter.

Property tax, insurance, and HOA are not on a credit report but are used.

[HLS]

Of course;
I was referring to non housing debt.
>
Private schools
Childcare
Utility bills
Auto gas

can be 4 major monthly expenses that are not on a credit report.

[HLS]

BG Wrote:
“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”
****************
Of course there is a ‘cost’ for the program that is a fixed % of the loan amount.. If the lender needs to make up 2% of the loan to give back to the borrower + some other fees, it certainly could be $12K on a $417K loan, however the $12K is not paid in cash, it just translates to a higher rate for the life of the loan, no cash from borrower.

If the payment is affordable, most people don’t care that it will cost them $30K +/- over the life of the loan,they only care about their monthly payment.
Even at 4.00%-4.25% with the kitchen sink rolled in, it is still near historically low rate for a 30yr fixed loan.

I’m surprised that FNMA approved this program but their goal is to generate new loans and collect fees.
They assume a certain level of default just as credit card issuers do.
There’s enough anticipated profit to justify the loss ratio.

Inflating the bubble is in the best interest of ‘the system’ ~People are happier with perceived wealth.

The Road to Ruin is littered with paper profits.

[The-Shoveler]

It is not just the happiness of perceived wealth,

The Gov has a real vested interest in rising tax base and moderate inflation (monetizing old debt).

[Author]

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