Qualified Mortgages and Its Impact on the VA Loan Borrowers

There’s a new type of loan called the ‘Qualified Mortgage’. Most of us have heard of it, especially prospective homebuyers who question the impact that it will have on their home mortgages. For example, retired or active duty military servicemen are speculating about the impact that these changes will have on their ability to get the benefits of a VA home loan.

The financial slowdown of 2008 led to the introduction of numerous stringent rules and regulations. This was done to put restrictions on giving away easy loans and to reduce the possibility of loan defaults. However, such restrictions have made life difficult for borrowers who are looking to buy a home. At the same time, the government has been implementing and modifying new mortgage policies to provide relief to these borrowers, and a Qualified Mortgage is one of them. There are some specific policies that have been implemented by certain U.S states. The perfect example would be the various programs and initiatives being taken by the government in Texas; especially its impact on the veteran home loan in Texas.

What is a Qualified Mortgage?
Qualified mortgages mainly focus on the safety and affordability of prospective homebuyers. During the 2000’s, many lenders provided mortgages to a large number of borrowers who had poor credit scores and who were not in the situation to pay back the loan. These subprime loans were the main reason that contributed to the financial meltdown and led to the collapse of the housing market.

The scenario mentioned above eventually led to the introduction of the qualified mortgage. The qualified mortgage does not have the risky features of other mortgages and it ensures that the borrowers can afford to repay the loans that have been sanctioned. Regulators have also laid down eight credit and underwriting requirements that must be met to obtain Qualified Mortgage status. Mortgage companies can still provide loans that do not meet the standards of a qualified mortgage, but those loans will not get protection as per this regulation.

The Effect on VA home loans
People who are worried about the impact that qualified mortgages will have on VA loans have a reason to smile. The good news is that it will not have much impact on the VA loans. These underwriting guidelines have been followed by most of the lenders over the years. Hence, no additional action needs to be taken to comply with these underwriting requirements.

In fact, VA loan borrowers will get some added advantages as it will limit the costs involved in obtaining a mortgage. It has been estimated that around 92% of the loans that have been taken out meet the requirements of a qualified mortgage. The other 8% of the loans either exceed or have a higher annual percentage rate (APR) than allowed. This shows that the new guidelines will not have much impact on a majority of home loans.

Qualifying For A VA Home Loan in Texas

Despite the Department of Veteran Affairs offering lucrative terms on home loans, not even 12% of military veterans have taken advantage of it. The primary reason for such low participation is that many veterans are unaware of the loan programs and if they qualify. Most have instead opted for loans offered by the Federal Housing Administration (FHA). However, with the sharp increase in mortgage insurance premiums on FHA loans in 2014, the demand for VA loans has risen.

To apply for a VA Loan you will have served in the Army, Navy, Air Force, Marines, National Guard or Coast Guard for a minimum of 90 days. Additionally, for VA Loans in Texas, you must meet the following criteria:

• You are an active military serviceman looking for a permanent change of station (PCS) to Texas
• You are an active military person and already living in Texas
• You had a home in Texas when you entered the military
• You had a home in Texas when you left the military
• Your home has been in Texas for at least a single day
• You intend to use the home as the primary residence

If you satisfy the above criteria, you may be eligible to apply for a VA home loan. If you are retired, be ready with your DD214 Form to apply for the loan. If you are an active military person, a statement of service will be needed to start the application process.


If you are a veteran, you deserve all of the benefits a VA Loan has to offer. Contact one of our VA Loan experts today to learn more.

Source: http://davidsongroup.net/mortgagepedia/posts/qualifying-va-home-loan-texas/

More to VA Loans Than Competitive Loan Rates

The advantage of taking out a Veteran Affairs (VA) loan is quite far reaching. The main purpose of this loan is to make life easier for active duty or retired military personnel. That is why lucrative benefits are offered to them through this program, which includes providing a guaranty on loans of up to 100% value of the property that they choose to buy. Even the funding fee from 0% to 3.15% that may be required for this loan can be financed by the Department of Veteran’s Affairs. This mortgage also provides another key benefit of zero down payment. Also, in terms of interest rates, among all the states VA loan rates in Texas are lower due to the support provided by the state.

There are some conditions to fulfil in order to get financing for a home loan under the VA mortgage program. The price of the house should not be more than the reasonable value as assessed by the department. So, the down payment will be waived only if the sale price of the house does not exceed the appraised value. However, unlike the FHA loan offered to other citizens, the veterans are not required to pay monthly insurance premiums.

Some other benefits of taking out VA loans include limiting closing costs, having a provision to allow sellers to pay closing costs, no prepayment penalty for early loan payoff and the guaranty provided by the VA department if borrowers find it difficult to make payments.

We at the Davidson Group can assist you with your VA loan needs. Our experienced loan officers can walk you through your options, and manage the complicated paperwork and official proceedings on your behalf. Over the years, we have helped hundreds of active-duty and retired military professional. We believe our veterans deserve the highest respect.

Source:  http://davidsongroup.net/mortgagepedia/posts/more-va-loans-competitive-loan-rates/

First Time Homebuyers are Better off in Texas

According to research by the National Association of Realtors (NAR), first time homebuyers have not been contributing much to the recovery of the housing market in the U.S. However, certain areas of the West and Midwest are likely to witness a rise in home purchases by the millennial generation. The research conducted by NAR considered the population and job trends in the metropolitan areas across the country to arrive at this conclusion.

The purpose of the research was to determine the most suitable markets for these young homebuyers. The finding of the research is good news if you belong to the millennial generation and are looking to buy your first home in Texas. Among other property markets, Austin is found to be one of the best Texas cities where these potential buyers are likely to purchase their first home. This region is in a better economic state, offers high job growth rates and affordable home prices compared to other metropolitan centers.

This optimism is in sharp contrast to the plight of millennial homebuyers in the other top US cities such as San Francisco and New York. The young populations in these cities are reeling under student debt, limited job prospects, restricted wage growth and tight credit conditions. Anyone looking to buy their first home in Texas needs to know all of their options before taking out a home loan.

Despite Texas being better off than other housing markets in the country, homebuyers need to ensure that they fulfill all the conditions in order to get all of the mortgage benefits. In this way, buyers could become eligible for several convenient loan options and downpayment assistance programs.

Easy loan options for first time homebuyers in Texas
Even first time homebuyers who belong to the low income bracket can buy a home in Texas. They can apply for a Federal Housing Administration (FHA) loan and qualify for a loan with as low as 3.5% down payment. If coming up with this amount of down payment becomes difficult for homebuyers, they can apply for one of the down payment assistance programs that have specifically been designed for Texans.

To learn more about these loan options, contact a credible mortgage firm today. Use any popular web search engine to look for one that offers the assistance of expert loan officers on all kinds of specialty mortgages.

Things you need to know about FHA loans

June brought some good news for the real estate sector in Texas. The sales of pre-owned homes in North Texas had seen the biggest year-over-year gain in 2014. In June of 2014, 9,481 houses were sold in this state, which were the largest single monthly sales ever recorded. Such a thriving housing market is creating a lack of inventory. Hence, home buyers may have to shell out more money to get their desired home due to the increase in property prices. As the market is full of new buyers who want to take advantage of this optimistic trend, the mortgage market is also witnessing a lot of activities. For these buyers, there is a wide variety of home mortgage options available. One of the most popular mortgage options for the first home buyers is an FHA loan.

The Federal Housing Administration or FHA loan program has specifically been designed for home buyers with low to moderate income. This loan is more lenient in terms of eligibility criteria such as credit score, borrowers’ income and outstanding debt. This program also allows a down payment of 3.5 percent, which seems generous considering the larger down payment requirement for conventional mortgages. In those mortgages, customers are expected to pay a significant amount of an upfront fee in addition to the monthly premium, which poses challenges to many borrowers.

FHA loans provide relief to home buyers who do not meet the typical eligibility criteria for traditional mortgages. With such benefits of this mortgage program, even the home mortgage lenders in Texas are ready to provide financing to buy a property.

Here are some of the features of an FHA loan:
Easier to get: In earlier times going for a home loan caused home buyers to go through confusion and taxing paperwork. However, things have changed now, and with a more streamlined application process and underwriting, mortgages get approved with quick turnaround time.

Limits of the loan: There is no specific maximum limit for an FHA loan. Instead, it is set according to different states, and it is based on the specific market condition.

Credit Score: FHA loans work in a different way than a traditional loan works when it comes to credit score requirements. There is no minimum requirement for the loan, and a homebuyer can still be eligible even if he has faced bankruptcy.

Available for all income groups: Though FHA loans are mainly sought by lower and medium income groups, there is no such restriction. If borrowers can prove their ability to pay, they can apply for this loan even if they belong to the high income bracket.

Mortgage processes can be complex and buyers better seek assistance from mortgage experts. They may need the services of a reputed home mortgage company to know more about FHA loans or any other suitable loan option. Such a company not only makes your work easier by finding the best mortgage option for you, it also provides assistance for a hassle-free loan application process.

Home Mortgage Lenders: How to Make the Best Choice?

In the current market scenario, you can get a lot of options to obtain mortgage loans as a home buyer. Other than the conventional ways of taking out loans from banks and other financial institutes, you can also select a reputed lending firm. In fact, hiring a lending firm will be much more convenient for you. A firm can provide customized solutions to your financial requirements, based on your affordability. You can look out for the right home mortgage lender in Texas when you decide to buy a home there.

What are the different sources available for mortgage loans?

Lender: A lender usually assigns a loan officer who works as a mediator between borrowers and the lending firm. These officers act as the sales person who helps understanding the terms and conditions of various loan programs

Banks/Financial institutes: These are traditional financial institutions that offer mortgage loans on the similar ground as a lender. However, their lending rules are much stringent, and thus loan rejection is much higher. Real estate agency: A real estate agency offers various property options to homebuyers. It works as an intermediary between buyers and sellers. Though their main objective is to assist sellers in selling their properties at the highest possible prices.

In terms of a mortgage, with so many options available, it becomes confusing for homebuyers to make the best choice.

Depending upon your needs and affordability, a lender can help you get an ideal loan option that is likely to be satisfactory.

Tips to find a knowledgeable and trustworthy mortgage lender

• Get recommendations from the people you trust: You can always ask friends and relatives for suggestions, especially from those who have recently obtained a loan. However, you need to cross-check the references to ensure selecting the best lender that matches with your need.

• Observe the first-time response of lenders: You may get to know a lot from the initial response of a lender. The traits of a professional lender are prompt responses, friendly and courteous behavior, keenness to educate and explain processes to borrowers and answering all the queries.

• Check out reviews and credentials: Online reviews are good indicators of the customer experiences of working with a lender. You can also check the lender’s credentials to ensure it possess the required experience and skills.

• Do your homework: Do a thorough online research to avoid being misled by non-reliable sources.

The steps mentioned above can help you get a suitable lender that can help you find an ideal home mortgage loan.

Are you a first time home buyer?

Most people dream of owning a home of their own and spent years saving in order to do so. If you have a similar dream, then you should consider various factors including your monthly income, savings, and budgeting before purchasing a new home. If you are serious about buying your first home, start your process by exploring financing options such a mortgage rates and programs. Buying a new home requires research, guidance and adherence to guidelines and rules.

Mortgage rules vary from one state to another across the United States. Some states even offer specific mortgage programs for home buyers in those states. For example, a first time home buyer in Texas can get financing through Texas Bond Programs.

Apart from opting for the right mortgage program, by chalking out a plan, potential home buyers can accomplish their dream to become homeowners.

Work to Improving Your Credit Score
When you contact a mortgage company for mortgage loan approval, your credit score will be checked at first. In fact, your credit score plays a vital role in determining if you are eligible for the loan or not, what type of loan, and rates. Hence, before you talk with a lender, it’s better to check your credit score by getting the credit report yourself. You can order credit reports from AnnualCreditReport.com. It is a free service, authorized by the federal government. After you know your status, you can then work to clarify any errors or can pay off any outstanding debts negatively affecting your score.

Save well in advance
Typically, you need to pay between 5% and 30% as down payment to get competitive rates on mortgage loan. For this, you may have to work towards building up your savings. To do this, you may need to cut out all unnecessary expenses from your monthly budget.

Finding a reputed real estate agent
This step takes time as finding a reputed real estate agent can be difficult. Ask friends, family members, research references for a reputed real estate agent. A good way to verify the credibility about the agent is to explore the internet.

Secure a pre-approved loan
Once you know how much loan you can afford, only then you can begin to research and shop for a home that fits your requirements. You will need to thoroughly understand the types of loan options available to you, and compare rates and other aspects conventional and non-conventional loans.

Find the Home of Your Dreams
You can take the onus of looking around and finding a home yourself, but that could be a difficult task. It is advised to read and research online about a house by checking reliable databases.

Once you find a dream home, talk with a reputed mortgage company that can provide flexibility in terms of mortgage options and loan processing assistance.

Home buying requires discipline and patience. A reputed mortgage company can assist you with guidance on mortgage programs, application, and securing a loan, making the home owning process easier for you.