Tag Archives: mortgage

Credit Unions Becoming Souce of Great Mortgage Deals

Posted on April 28, 2015 | Leave a comment

WASHINGTON — Want to buy your first home with little or nothing down and maybe get a refund on part of your agent’s commission?

Consider a credit union that is aggressively growing its mortgage business. Credit unions have been expanding their presence in housing — more than quadrupling their share of total mortgage market volume in the past nine years, according to the National Association of Federal Credit Unions — by offering deals you simply can’t find at most banks.

Case in point: The country’s largest credit union, the $64 billion-asset Navy Federal, closed more than $1 billion in home loans during March alone. That’s big. But what’s really extraordinary: 59 percent of the loans went to first-time buyers, and two-thirds of those were from a demographic slice missing in action for years — borrowers ages 18 to 34. The historical norm for first-time buyer participation in home purchasing is around 40 percent, but currently is just 28 percent to 29 percent, according to the National Association of Realtors.

So how is Navy Federal pulling in hordes of young first-timers? By offering loans that address their needs — zero-down payments, no private mortgage insurance premiums, plus the standard low-down payment menus of the Federal Housing Administration (3.5 percent minimum) and the Department of Veterans Affairs (zero minimum) loans. Navy Federal also is tapping into a membership base of 5 million members worldwide and adding young new members quickly. It’s open to all branches of the armed services, active and retired, civilian employees, contractors and a wide range of relatives.

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Loan Modification Based on Amount Owed

Posted on January 26, 2014 | Leave a comment

Q: I paid my 15-year mortgage for eight years before I suffered a hardship and had to stop making payments. I am trying to get a loan modification and want to know what happens to the equity in my home. And is the modification done on the original loan amount or just the remaining balance of the loan?

A: When your lender looks to modify your loan, it considers your budget to get a payment that is affordable for you to make. Lenders estimate that a person can devote 31 percent of their household income toward principal, interest, taxes and insurance. You do keep your equity. The loan modification amount will be based on what you still owe on the loan, plus the accrued interest and penalties for the time you did not pay.

To get the payment to an affordable amount, your bank will first look to lower your interest rate and will adjust the remaining term of your loan only if it is necessary to spread the payments over a longer time. It’s easy to see what your payments would be if the loan mod is approved by applying the 31 percent formula to your income.

disclaimer: for information and entertainment purposes only

A Big Year for VA Loans

Posted on January 21, 2014 | Leave a comment

The number of loans guaranteed by the Department of Veterans Affairs reached a record high in 2013, perhaps marking the peak of an upward trajectory that began after the housing market collapse.

The department guaranteed nearly 630,000 mortgage loans in fiscal year 2013, setting a new high just as the program enters its 70th year, said Mike Frueh, the director of the V.A.’s Loan Guaranty Program. The average loan was about $225,000, an amount that reflects the program’s value to “working-class America,” he said.

Contact the real estate appraisers at www.scappraisals.com; they are VA approved appraisers.

Calling the program’s growth “pretty incredible,” Chris Birk, the executive editor at Veterans United Home Loans, an online broker of V.A. loans, estimated that total loan volume has risen 372 percent since fiscal 2007.

Another factor is the tough lending climate of the last six years, which has made a V.A. loan the most viable option for many service members. “It’s become so much more difficult for military personnel and veterans to qualify for conventional financing,” Mr. Birk said. “This is the only path to homeownership for many.”

One big advantage for first-time buyers is that the loans do not require a down payment. About 90 percent of all V.A.-guaranteed purchase loans are made without any money down. “Our average borrower has about $7,000 in liquid assets at the time they close the loan,” Mr. Frueh said. “That’s not enough to make a significant down payment.”