What to know about VA loan programs

Written by Ryan Morgan on . Posted in Resources

 

Family Welcoming Husband Home On Army Leave

Many people view VA loan programs with skepticism and uncertainty. This simply should not be the case as the VA offers one of the best loan programs around and we at Mortgage Corp East are proud to have VA loans be a significant portion of our business.

The VA loan program offers a no money down loan option with no mortgage insurance required, and is often on par or below conforming rates. Often times veterans walk into our office unsure of what program is best and if they should even bother looking into a VA loan because of the stigma attached. 99% of the time, it is the best loan program for our client.

The only caveat to the VA loan program is there is a VA funding fee, which depending on the amount of times you use the program can be north of 2%. However, the VA funding fee is allowed to be financed into your loan amount so you do not pay it out of pocket. An example would be if you are buying a home for $400,000 and the VA funding fee is 2.25%, your end loan would be $409,000. However, if you are deemed to be 10% or more disabled from your service the VA waives your funding fee. The majority of veterans do collect some type of disability whether it be large or small, so more often then not we can put you into a loan program with no money down, no PMI and no funding fee. It’s truly a great deal and a great service to offer for our military veterans.

If you are anticipating a VA loan, there are certain additional requirements that need to be met. The major requirement is a wood eating insect report, to establish there is no damage to the structural integrity of the home. Please have this form completed with your home inspection.

The other form you should have handy is a copy of your DD214. If you do not have one, contact one of our loan officers for instructions to obtain a copy.

When should you NOT consider refinancing?

Written by Ryan Morgan on . Posted in Refinancing

Rechtsberatung für Verbraucher

If you plan on moving soon

Refinance costs usually take a year or so to pay off before you start saving on your mortgage. If you know that you will be moving before the amount of time it will take you to break even, you should think twice about switching loans.

If your loan carries a prepayment penalty

Some unscrupulous lenders add prepayment penalties to a borrower’s mortgage. These penalties charge you expensive fees if you sell or refinance your home before a certain amount of time (usually 1-5 years). Calculate if your refinancing savings could outweigh these fees.

If you are close to paying off your current mortgage

If you are close to paying off your mortgage, it may make sense to wait instead of refinance. Refinancing can extend the term of your loan and increase your costs.

If you are having financing problems

If you are having major financial problems, you may want to reconsider refinancing as a way to consolidate your debts or borrow money. In some situations, your home could be put at risk if your financial problems continue.

Why should you consider refinancing?

Written by Ryan Morgan on . Posted in Refinancing

To lower your interest rate

Generally, you should consider refinancing if you can lower your interest rate by a significant amount. That number will vary depending on the cost to refinance and the amount of time you plan to spend in your home.  It is possible that you could save a a significant amount of money by refinancing your mortgage.

To switch to a type of loan that is better for you

If you currently have an adjustable rate mortgage (ARM), you may want to switch to a fixed rate mortgage (FRM) in order to lock in a low rate for a long time. Alternately, you may be able to reduce your current payments by switching from a FRM to ARM.

To avoid a balloon payment

Some mortgages have a large payment due at the end of the loan term (usually 5-7 years). You may need to refinance your loan in order to avoid having to pay this “balloon payment.”

To not have to pay private mortgage insurance anymore

Private mortgage insurance (PMI) is sometimes required by lenders if you had to borrow more than 80% of the home’s sale price. If the home’s value has increased, you can use this amount to refinance and stop paying PMI. You may be able to drop your PMI without refinancing, but it is wise to explore the opportunity with your loan officer and determine if you can lower your rate and rid yourself of your PMI.

To cash out home equity

Home equity is often used to finance a remodeling project, college tuition, car purchase, or a vacation. If your home’s value has increased, you can refinance to cash out this extra amount.

To consolidate your debts

If you have a lot of high interest debts, you may be able to save by consolidating these debts into your mortgage. Car Loans, credit cards, second mortgages, and other debts can be included in your refinance.

Jim McGue

Written by Ryan Morgan on . Posted in Featured Professionals

Featured Professional Q&A: Jim McGue, Owner | Granite Group Realtors

JimMcGue

1. How long have you been in Real Estate and why did you choose to get into the business?

Started June 1983. To be honest, I don’t know why I got in. It was not the same business back then.

2. What organizations, clubs, hobbies, passions do you have outside of real estate?

I enjoy rehabbing property and exercising, as lame as this sounds.

3.  What do you most enjoy about working in real estate?

I enjoy taking the stress out of the process of buying or selling a home. The day of closing is always a memorable time.

4. What is your most memorable moment in real estate?

There have been many. You have been at closings with my first time buyer clients and the great feeling we both shared assisting them with the purchase of their first home.

5. What are the greatest challenges that you face in today’s market?

Home prices continue to rise making it difficult for first time buyers.

6. What do you feel makes you stand out most from your competition?

I have 30+ years in the business and home buyers and sellers want to be kept informed on a frequent basis. The process can be stressful.  My experience is very helpful to keep the process on track and providing  “BEDSIDE MANNER”  to keep things calm.

Call Jim at 617-694-5756, email him at jmggr@aol.com, or visit him online at www.granitegrouprealtors.com.

Jeannie Carr

Written by Ryan Morgan on . Posted in Featured Professionals

Featured Professional Q&A: Jeannie Carr, Owner | Success Real Estate

JeannieCarr

Bio

If you are looking for a home from Braintree down through the Bridgewaters and want an honest, dependable and experienced agent to work with…give me a call.  I have 30 years’ experience and a wealth of resources to help you. I will personally visit your home and give you advice PRIOR to listing your home so you can maximize your profits.  I am an Accredited Stager and give my personal clients FREE staging advice.  I also have 30 years worth of contacts to help you get rid of your junk, fix up your home, move, pack, repair etc.  Moving is a very stressful time and having a great realtor AND a great mortgage rep are the 2 biggest advantages you will have over all your friends. “INTERVIEW the rest, but HIRE the best!”

Q&A

1. How long have you been in Real Estate and why did you choose to get into the business?

I have been a realtor serving the south shore since 1984. I have always loved real estate and architecture.​

2. What do you most enjoy about working in real estate?

The most rewarding part of my job is working with grateful people who appreciate the hard work and extra mile I go for them to help them achieve their goals of buying and selling or both.  Almost all of the friends I have today are people I met in real estate.

3. What is your most memorable moment in real estate?

​I actually won an award several years ago called “The Extra Mile Award”.  It was one-time award given to me out of 1,000 agents at the Annual Convention from the owner of the company because of the overwhelming number of hand written letters he had received from my buyers and sellers saying how much they loved working with me and how appreciative they were of my efforts to help them buy or sell.   This award means more to me than the many contests I have won throughout the years because I believe it’s what people say about you that means more than anything.​

4. What are the greatest challenges that you face in today’s market?

The 2008 recession is still affecting us today and a lot of sellers still don’t have the equity in their homes to be able to move to their next destination.  It is VERY important to price a home at its fair market value, not the value that the owner thinks it has.​  The 2008 recession has also made it very difficult for buyers to get financed and the buyers today are much more saavy about choosing a really good, reputable mortgage rep and mortgage co. (like Mortgage Corp East) because if they choose the wrong mortgage rep, the whole deal can easily fall apart at the end and they not only lose the home of their dreams, but can lose their deposits as well.

5. What do you feel makes you stand out most from your competition?

​People tell me that I am different because I make everyone feel like family and I try to quickly gain a sense of respect and trust from the buyers or sellers.  I am brutally honest which I think most people appreciate when it comes to buying or selling and staging their homes and getting them ready to list.

6. What organizations, clubs, hobbies, passions , community involvement do you have outside of real estate?

​I love anything to do with water!  Give me a beach and a chair or some games, and I’m good to go.  My husband and I sing in the choir at Holy Ghost Church in Whitman and have been involved with the softball and coaching of our daughters and their teams growing up.

We both have big families so our spare time is usually spent at some family function.  ​

Call Jeannie at 617-529-3040 or visit her online at www.jeanniecarr.com!

Why is there so much paperwork involved in the process?

Written by Ryan Morgan on . Posted in Mortgage 101

Close up of a mortgage application and a pen

Whether this is your first time going through the approval process, or your 10th, odds are it is different than it was the last time you did so. There are two main reasons for this:

  1. The government has set forth new guidelines that now demand the bank to prove beyond any doubt that you are indeed capable of affording this mortgage and showing an ability to repay the loan. Leading up to the housing collapse, many people and families were approved for loans that they were not capable of sustaining. The government is looking to ensure this does not happen again
  2. The banks do not want to be in the real estate business. Over the course of the housing bubble and collapse, banks were forced to take on the responsibility of liquidating millions of foreclosures and negotiating millions of short sales. Just like you, I and the government, they do not want any more foreclosures and they avoid this by double checking everything on your application as well as looking for 3rd party verification for most important pieces.

One can argue that the banks clearly made the mistake of being too liberal in the guidelines over the past decade, and now could potentially be erring on the side of caution with the conservatism, but there is a silver lining to this. If it were not for the housing collapse, banks would not be as strict as they are on their paperwork requirements, and many people would not be able to obtain a mortgage with an interest rate at a historically low levels. Rather than focus on the additional paperwork and documentation requirements, let’s be thankful that we are able to purchase homes at these low rates.

Why work with a lender or broker over a local bank or credit union? 

Written by Ryan Morgan on . Posted in Mortgage 101

couple is considering future apartment design

This is a very common question. While local banks can be great, their product selection can be incredibly restrictive. They work with their products and their products alone. If their particular product serves your needs, it may be a great fit. If it does not, you won’t have access to a full array or programs and options. A broker or lender will have access to dozens of investors and loan servicers, each of which will offer a variety of products. This allows you to evaluate options and ensure that whatever program you decide to pursue, is suited for your unique set of needs and your individual situation.

How do you know when you have received a thorough pre-approval?

Written by Ryan Morgan on . Posted in Mortgage 101

Bad news on letter

Many loan officers vary as to how they like to perform this piece of the puzzle. If your loan officer is not asking you for the following, then you may want to seek a second opinion.

  • Most recent 2 years of complete federal and corporate tax returns
  • Most recent 2 years of W2s
  • Most recent one month’s worth of pay stubs
  • Most recent 60 days worth of any bank statement, 401K, investment account, CD, assets, etc.
  • If you own any other real estate, you should be expected to provide mortgage statements, tax receipts, and homeowners insurance evidence
  • If divorced, a copy of a recorded divorce decree or notarized separation agreement
  • Employers names and address for the most recent 2 years

What are the true costs of buying a home?

Written by Ryan Morgan on . Posted in Mortgage 101

House money and calculator.

Typically there are 5 main pieces of buying a home when it comes to your up front cost:

  1. Your down payment: This vary depending on your eligible loan programs, but typically a minimum down payment is required of at least 3.5% of  the sales price of your home.
  2. Closing costs: this will also vary depending on your loan program, but you can expect anywhere from approximately $3,000 to $5,000 depending on your loan amount and loan program.
  3. Escrow and prepaid items: Most people do not take into account this piece of the puzzle. At the time of settlement, you’ll be responsible for any taxes due on your property, any prepaid interest due, as well as setting up an escrow account for your real estate taxes and home owners insurance. Typical escrows will include 3-5 months of real estate taxes and 2-3 months of homeowners insurance.
  4. Homeowners insurance: your homeowners insurance is required to be paid in full prior to closing, ensuring that your home has full replacement coverage should disaster strike.
  5. Final adjustments: Your new home may have balances due for water, sewer, oil, gas, or propane. These can be surprise fees that many people do not anticipate, but are very common.

What are closing costs and how much can I expect to pay?

Written by Ryan Morgan on . Posted in Mortgage 101

ClosingCosts-new

There is a lot that goes into the approval, process and approval of your mortgage. Much of this is done behind the scenes, so when you are evaluating your closing costs there are typical fees that you can expect to see.  Closing costs vary depending on your loan amount and can range from $3000-$5000 for most loan programs. Certain loan programs require different closing costs so ask your loan officer if you are uncertain!

Most common closing costs include:

  • Bank Fees/Origination Charge: included in this fee is underwriting fees, processing fees, tax service fees, IRS verification fees, warehouse fees and MERS fees
  • Appraisal Fee: This fee is to pay an independent appraiser to perform an opinion of value on your home. It serves to protect both you and the lender and ensure that the home’s value is not less than you are paying for it.
  • Credit Report Fee: a large part of the underwriting process involves credit. Beginning from verifying your FICO score to updating any accounts as needed throughout the process.
  • Flood Certificate: Your lender will need to verify that your home is or is not in a flood zone. If in a flood zone, it’s likely that flood insurance will be required by your lender.
  • Attorneys Fees: Your closing attorney will be doing an incredible amount of work for the closing process. Starting from your title exam, to your municipal lien certificate, to providing title insurance for your home.
  • Recording Fees: At settlement, you will record a mortgage and a deed to evidence that you own the home. This is when your ownership becomes officially a matter of record.
  • Plot Plan: The attorney will obtain a copy of a plot plan to evidence that the boundaries of your property are approximately where they should be. This is not exact, but gives a rough idea. Should anything look out of the ordinary then you would be able to obtain a survey to verify your lot lines.

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Phone: 781.982.3500
Fax: 781.982.3511
Email: pboretti@mortgagecorpeast.com

Mortgage Corp East
NMLS 2674
800 Hingham Street Suite 104N
Rockland, MA 02370

 

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