Home Loans for Veterans Home Loans for Veterans Presented by Chad Bowman
[ class objective ] To increase your sales [ today s agenda ] Big Picture Loan Process Bonus Round Introduction VA Benefits Program Comparisons VA Myths Start to Finish Eligibility & Qualification Properties & Contracts Inspections & Repairs Reminders Texas Vet Loans VA Refinancing Quiz Questions Marketing Ideas Wrap up Q&A
[ the market ] Texas = 2 nd largest vet population Texas = most women veterans Over 12% of adults in Texas are vets Travis County = over 50,000000 vets Numbers are growing daily! [ VA benefits ] $0 down and no mtg. insurance Credit scores as low as 620 Easier qualifying guidelines Assumable by vet or non vet Lower rates, especially > $417K
[ loans up to 1 million ] Sl Sales Price Pi = $517,000 $0 DP Limit = $417,000 Overage = $100,000 25% Down = $25,000 (less than 5% down) [ better jumbo rates ] $600,000 000 Loan VA Jumbo CONV Jumbo Interest Rate 3.75% 4.25% Payment $2,779 $2,952 Savings/Mo. $173 n/a Savings/Yr. $2,076 n/a
[ lower payments ] $200,000 Base Loan VA FHA CONV USDA Down Payment $0 $7,000 $6,000 $0 Upfront FF or MI zero to $6,600 $3,500 zero $4,000 Monthly MI zero $229 ~$167 $68 *Payment $955 $986 $1,201 $1,122 $1,042 *Assumes 4% rate [ long term savings ] VA FHA CONV USDA 1 month $246 $167 $87 1 year $2,952 $2,004 $1,044 5 years $14,760 $10,020 020 $5,220 10 years $29,520 $20,040 $10,440
[ more buying power ] Same Buyer FHA Loan VA, 33%FF 3.3% VA, No FF Buying Power $200K $230K $235K Commission $6K $6.9K $7K $35,000 more for your buyer! $1,000 more for you! [ benefits summary ] Lower payments Less cash out of pocket More buying gpower Easier qualifying
[VA myths ] Myth: VA loans can only be used once Fact: Vets can use VA multiple times Myth: VA loans cost the seller more Fact: Not if you use seller contributions Myth: VA loans take longer to close Fact: Not with a VA Specialist [ the loan process ] Application Pre Approval Contract & Inspections Underwriting Appraisal Disclosures Approval HUD 1 Closing
[ pre approval ] Eligibility ( earned it ) Entitlement ( available ) Qualification ( afford it ) [ VA eligibility ] Served Active Duty (or in Reserves) Not Dishonorable Discharge VA Certificate of Eligibility debriefing at time of ETS
[ DD 214 ] [ VA entitlement ] $417,000 Full Entitlement ($200,000) VA Loan #1 (no DP) $217,000 Remaining Entitlement $217,000 VA Loan #2 (no DP) foreclosure in Dallas
[ the $144K dilemna ] up to $417,000 up to $144,000 2 nd tier 1 st tier VA loan must exceed $144,000 to use full entitlement [ VA qualifying ] 620 min. credit score DTI < 41 to 50% Stable income, 2 yrs Income continuation Adequate residuals Enough cash to close Reserves for investment properties (3 to 6 mos) No co signers Include NPS debts DTI = debt to income ratio NPS = non purchasing spouse
[ derogatory events ] At least since: Bankruptcy discharge Foreclosure closing* Short sale closing Loan modification paid off CAIVRS w/ FHA [ common credit issues ] unpaid tax liens past due child support unpaid judgments recent late payments recent collections disputed accounts late pays after a maxed out credit limits derogatory event new or lack of credit open past due balances unreported accounts auto repossessions deferred student loans
[ FHA mortgage insurance ] Upfront tmi = 1.75% ($17/mo) Annual MI = 1.35% ($225/mo) Total MI = $242/mo ($200K loan) FHA as a VA funding fee = % As of 6/3/13, FHA MI is permanent! [ VA funding fee ] (purchase loans only) 0% Down, Prior Pi Loan 0% Down, 1 st Time Use* 5% Down Payment* 10% Down Payment* Disabled Veteran Vt (10% rating) % % % % % *Add.25% for Reserves/Nat l Guard not activated
[ funding fee reminders ] Majority of vets don t pay it Always rolled into loan Not in sales contract Appraisal sales price only [ 100% tax exemption ] 100% VA disability rating = NO property taxes
[ pre approval notice ] Includes: Loan program(s) Max. sales price Min. down payment Min. seller contributions Contingency (if applicable) Items needed list [ properties ] Primary residence only 1 to 4 unit properties New or resale/existing VA approved condos VA in MLS listing
[ VA condos ] www.tinyurl.com/vacondolist [ VA condos ]
[ sales contracts ] Closing dt date estimates t VA non allowable fees Min/max seller contributions Rolling in closing costs Sales contract example [ closing costs ] non allowable Lender fee Processing fee Underwriting fee Attorney fee Title escrow fee Courier fee Termite fee (always) allowable Origination fee up to 1% OR 1% in non allowable fees paid by buyer Paid with seller contributions or a lender credit Always required on a VA Texas Vet loan
[ sales contract ] 12a1b = MINIMUM $200,000 starting sales price + $2,000 seller contributions $202,000 final sales price* *Must appraise for $202,000 [ 3rd party financing ] A. Conventional Financing B. Texas Veterans Loan C. FHA Insured Financing D. VA Guaranteed dfinancingi
[ inspections ] Home inspection Termite inspection VA appraisal Termite treatment Septic inspection Well water test Not required by VA Yes, usually required (exceptions?) If lender requires it [ required repairs ] termite damage missing flooring warped siding wood rot peeling paint broken windows roof issues heating source water damage foundation issues
[ things to remember ] Confirm eligibility/entitlement bl l Use seller contributions Get termite inspection Clear conducive conditions Sign termite report at closing [ Texas Vet loans ] 3 loan programs 2 basic requirements 1 main purpose website: www.texasveterans.com
[ loan programs ] Land donly Up to $100K Min. 5% down Min. 1 acre 30 yr fixed Rate = 6.75% Direct to TVLB Home Improvement poe e Up to $25K For substantial improvements Primary residence Same rate as VHAP Direct to TVLB [ VHAP ] Veterans Housing Assistance Program Primary residence, purchase only Minimum 620 credit score (ask lender) Up to $417K, including funding fee Used with VA, FHA, or Conv. loan Thru participating lenders only
[ 2 basic requirements ] Living in Texas at time of application (for at least ) AND 90 daysof activedutyservice (or min. VA requirement) [ Texas Vet forms ] Participating Lenders usually handle this for the veteran
[ property types ] primary residence in Texas single family attached or detached home town home or condominium multi family up to 4 units (> 5 yrs old) manufactured homes (must find lender) not for construction or refinancing [ new homes ] ENERGY STAR certified w/ certificate OR HERS Index Score of 75 *Not required if sales contract is signed after new home is 100% completed
[ this week s rates ] Texas Vet Base Rate = 30% Disabled Vet = Activated Reservist * = * Activated Reservist must obtain Texas Vet loan prior to receiving orders for Title 10 activation [ Texas Vet fees ] origination fee participation fee discount points Fees are in addition to standard lender fees Must use seller contributions with a VA loan
[ potential savings ] $200,000 Loan VA, no FF TxVet TxVet + DD Sample Rate 3.75% 3.25% 2.75% P&I Payment $926 $870 $816 Savings/Month n/a $56 $110 Add l Cost (1.50) n/a $3,000 $3,000 Payback Period n/a 4.5 yrs 2.3 yrs [ VA refinancing ] 3 types: Full doc VA refinance Streamline VA refinance (IRRRL) Cash Out VA refinance General requirements: Min. 640 credit score (lender dependent) No late mortgage payments (12 mos)
[ quiz questions ] #1 When would an FHA loan be a better option than a VA loan, assuming the veteran is eligible and qualifies for both programs? #2 If a Reservist has never been activated, how long must he or she serve to be eligible for a VA loan? #3 When are you not required to get a termite inspection for VA financing? #4 How long do you have to live in Texas to be eligible for a Texas Veteran home loan? #5 What is the objective of today s class?
[ 3 Step action plan ] LEARN these programs MARKET these programs HELP vets find a VA Specialist [ marketing ideas ] Letters you can send to your database Email templates you can use to attract vets Content to use online to promote VA loans Resources to help you when working with vets Flyers you can use to explain the benefits Link to a VA Loan Specialist on your website Go to www.chadbowman.com/marketing (password = )
[ what we do ] online applications 24 hour PQ turnaround in person meetings pre approval letters contract assistance quick responses disclosures in person or with Docusign email updates to all parties from appraisal through funding attend closings whenever possible post closing follow up 1 st payment reminders homestead exemption forms in January presented by Chad Bowman, VA Loan Specialist The VA Team at United Lending Phone: Fax: Email: Web: LinkedIn: FB/Twitter: Office: 512 646 0800 512 646 0801 chad@chadbowman.com www.chadbowman.com chadbowman hdb chadbowmantx 3429 Exec. Center Dr. #200 Austin, Texas 78731