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FHA & VA LOANS |
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There
are many factors to consider when applying for a government loan.
We will be by your side every step of the way. Below is some helpful
information to help get you started. To get started immediately
click here for our on-line application.
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| FHA Home Loans
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The Federal Housing Administration was started in
1934 as part of the new deal. The FHA's goals have remained the
same through out the years and they are to contribute to building
and preserving healthy neighborhoods and communities, maintain and
expand homeownership, and to stabilize credit markets in times of
economic disruption.
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The FHA now offers a variety of loan programs to a large population
and FHA mortgages can have fixed or adjustable interest rates. Many
find these home loans attractive because they require very small
down payments, gifts can be used for down payments and closing costs,
and because the FHA regulates the closing costs. These loans also
have qualifications that are easier to meet than traditional mortgages.
The FHA does not require a minimum FICO score to meet qualifications
and these programs will allow home purchase two years after a bankruptcy
filing.
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Energy Efficient Mortgages, EEMs, recognize that reduced utility
expenses can permit a homeowner to pay a higher mortgage to cover
the cost of the energy improvements on top of the approved mortgage.
FHA EEMs provide mortgage insurance for a person to purchase or
refinance a principal residence and incorporate the cost of energy-efficient
improvements into the mortgage. The borrower does not have to qualify
for the additional money and does not make a down payment on it.
The mortgage loan is funded by a lending institution, such as a
mortgage company, bank, or savings and loan association, and the
mortgage is insured by HUD. FHA insures loans. FHA does not provide
loans.
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Section 203(k) insurance enables homebuyers and homeowners to finance
both, the purchase (or refinancing) of a house and the cost of its
rehabilitation through a single mortgage - or to finance the rehabilitation
of their existing home. FHA approved lending institutions which
include many banks, savings and loan associations, and mortgage
companies can make loans covered by Section 203(k) insurance.
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Reverse mortgages are becoming popular in America. Reverse mortgages
are a special type of home loan that lets a home owner convert the
equity in his/her home into cash. They can give older Americans
greater financial security to supplement social security, meet unexpected
medical expenses, make home improvements, and more.
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FHA has permitted streamline refinances on insured mortgages since
the early 1980's. The "streamline" refers only to the
amount of documentation and underwriting that needs to be performed
by the lender, and does not mean that there are no costs involved
in the transaction. The basic requirements of a streamline refinance
are:
. The mortgage to be refinanced must already be FHA insured
. The mortgage to be refinanced should be current (not delinquent).
. The refinance is to result in a lowering of the borrower's monthly
principal and interest payments
. No cash may be taken out on mortgages refinanced using the streamline
refinance process
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VA
Loans
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| The more you know about our home loan program, the
more you will realize how little "red tape" there really
is in getting a VA loan. These loans are often made without any
down payment at all, and frequently offer lower interest rates than
ordinarily available with other kinds of loans. Aside from the veteran's
certificate of eligibility and the VA-assigned appraisal, the application
process is not much different than any other type of mortgage loan.
And if the lender is approved for automatic processing, as more
and more lenders are now, a buyer's loan can be processed and closed
by the lender without waiting for VA's approval of the credit application.
Additionally, if the lender is approved under VA's Lender Appraisal
Processing Program (LAPP), the lender may review the appraisal
completed by a VA-assigned appraiser and close the loan on the
basis of that review. The LAPP process can further speed the time
to loan closing.
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These loans are made by a lender, such as a mortgage company, savings
and loan or bank. VA's guaranty on the loan protects the lender
against loss if the payments are not made, and is intended to encourage
lenders to offer veterans loans with more favorable terms. The amount
of guaranty on the loan depends on the loan amount and whether the
veteran used some entitlement previously. With the current maximum
guaranty, a veteran who hasn't previously used the benefit may be
able to obtain a VA loan up to $240,000 depending on the borrower's
income level and the appraised value of the property. The local
VA office can provide more details on guaranty and entitlement amounts.
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Veterans who served on active duty and were discharged under conditions
other than dishonorable, during World War II and later periods are
eligible for VA loan benefits. World War II (September 16, 1940
to July 25, 1947), Korean conflict (June 27, 1950 to January 31,
1955), and Vietnam era (August 5, 1964 to May 7, 1975) veterans
must have at least 90 days' service. Veterans with service only
during peacetime periods and active duty military personnel must
have had more than 180 days' active service. Veterans of enlisted
service which began after September 7, 1980, or officers with service
beginning after October 16, 1981, must in most cases have served
at least 2 years. VA regional office personnel may assist with additional
eligibility questions
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The application process for VA financing is no different from any
other type of loan. In fact, the VA application form is the same
as that used for HUD/FHA and conventional loans. The mortgage lender
verifies the applicant's income and assets, and obtains a credit
report to see that other obligations are being paid on time. If
all is well and the appraised value of the property is enough to
cover the loan needed, the lender, in most instances, can then close
the loan under VA's automatic procedure. Only about 10 percent of
VA loan applications have to be submitted to a VA office for approval
before closing.
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You may use VA-guaranteed financing:
1. |
To buy a home. |
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To buy a townhouse or condominium unit in a project that
has been approved by VA. |
3. |
To build a home. |
4. |
To repair, alter, or improve a home. |
5. |
To simultaneously purchase and improve a home. |
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To improve a home through installment of a solar heating
and/or cooling system or other energy efficient improvements.
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To refinance an existing home loan. |
8. |
To refinance an existing VA loan to reduce the interest
rate and add energy efficiency improvements. |
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To buy a manufactured (mobile) home and/or lot. |
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To buy and improve a lot on which to place a manufactured
home which you already own and occupy. |
11. |
To refinance a manufactured home loan in order to acquire
a lot. |
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A basic funding fee of 2.0 percent must be paid to VA by all but
certain exempt veterans. A down payment of 5 percent or more will
reduce the fee to 1.5 percent and a 10 percent down payment will
reduce it to 1.25 percent.
A funding fee of 2.75 percent must be paid by all eligible Reserve/National
Guard individuals. A down payment of 5 percent or more will reduce
the fee to 2.25 percent and a 10 percent down payment will reduce
it to 2.0 percent.
The funding fee for loans to refinance an existing VA home loan
with a new VA home loan to lower the existing interest rate is
0.5 percent.
Veterans who are using entitlement for a second or subsequent
time who do not make a down payment of at least 5 percent are
charged a funding fee of 3 percent.
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Empire Mortgage Services Inc can help you with your Somerset FHA
and Somerset VA home loans. Somerset FHA home loans can help Somerset
borrowers obtain a Somerset mortgage more easily. Somerset VA home
loans can help Somerset Veterans secure Somerset home loans to purchase
their dream home. Contact Empire Mortgage Services Inc for help
with your Somerset FHA and VA home loans.
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