A Simple Guide to VA Loans

In addition to the many civilian loan options on the market, there is one lending opportunity that only military service members can take advantage of, which is a government loan backed by the Department of Veteran Affairs (“VA”). Even with an imperfect credit score, active service members, veterans, and surviving spouses can qualify for this loan category. 

The main benefit of this loan is that the VA will guarantee the loan and will pay the lender a certain percentage of the principal in the event of default. Here’s a breakdown of the types of VA loans and information on who qualifies:

Types of VA Loans

The VA Cash Out Refinance Loan allows borrowers to replace their current loan with a new one under different terms. You can take case out of your home equity or refinance a non-VA loan into a VA-backed loan.   

A VA Purchase Loan is similar to a standard mortgage. If you choose this option, you’ll be able to buy a property with no down payment. Specific terms may differ according to the lender. 

The VA Native American Direct Loan (NADL) is designed for Native American veterans or veteran spouses of Native Americans. It allows borrowers to purchase, construct, or renovate a home on federal trust land. 

Who Qualifies? 

VA Loans have no down payment, less strict credit requirements, and are available to service members, veterans, and military spouses who meet one of the following conditions:

 - Borrower has served 181 days of active service during peacetime

 - Borrower has served 90 days in active service during wartime (consecutively)

 - Borrower has served 6 years in the National Guard or Reserves

 - Borrower has served 90 days in the National Guard or Reserves under Title 32, with at least 30 consecutive days served. 

 - Borrower is a spouse of a service member who died in the line of duty or because of a disability from their service.

To prove that you are eligible, you’ll need to obtain a Certificate of Eligibility (COE) that connects to proof of your service. The VA’s eBenefits portal allows you to apply for this online. For surviving spouses, you can find more information on what you’ll need to do to get a COE using this information available on the VA’s website.

If you have any questions about VA loans and eligibility requirements, call us at (504) 581-6427. Homestead Title is a full-service title and escrow company. Since 1934, we have provided our customers with competent, thorough, and professional service. Before each closing, we search public records to clarify legal and financial risks for lenders, realtors, and other stakeholders in the real estate transaction process. Our energetic and capable team of real estate title professionals provides accurate investigations, rapid turnaround time, streamlined paperless delivery, and exceptional customer service. 

Keep an Eye on These Trends When Investing in Real Estate in 2022

A global pandemic and economic woes have slowed everything down except the housing market. CNBC reports that during Spring of last year, sales of homes dropped from an estimated 4 million properties sold between March and May and have now there is a need for nearly 7 million homes before the end of the year. The problem is, you can't count on today's gains as an investor, as things can quickly turn for the worst at any moment. However, there are a few trends worth watching to help you strategize a way to protect best and maximize the return from your investment.

Mortgages are Currently Easier to Secure

It may seem like a contradiction during national economic issues, but mortgages are easier to secure. Mortgage credit availability was up 3.9% increase between July and August of 2021. Lending standards have become laxer, allowing even those with unsatisfactory credit to take advantage of an investment loan

When mortgage rates are low and stable, the real estate industry gets a jumpstart. Though this trend could end at any moment, mortgage interest rates are also at all-time lows, as significant elections, even a year from now, have this effect. The Mortgage Reports organization cites that the average rate on a 30-year, fixed-rate mortgage was just 2.74% in January, up from 3.62% in 2020 and 4.76% a decade prior.

Looking to Manage Property? Rent Payments at All-Time High!

If you have the start-up capital, the time to become a property owner and landlord is now. With the eviction moratorium in the past, prospective renters have reached record numbers. Alongside housing prices, rental prices have been climbing, too. The Department of Housing and Urban Development reports that the average rental price for a place has increased 32% since 2010. With housing prices more expensive than most goods, it might be a lucrative idea to offer some amenities (in-unit laundry, appliances, utilities, etc.) to hook a renter who might otherwise be skeptical about the rental price. 

 Worried About Market Volatility? Rest Assured! 

Real estate rises and falls in a cycle. As we saw with the housing crash in 2007-2008, there are some busts and booms. Fortunately, most experts wouldn't label this close to another crisis just yet. Though we are in a recession, there are several differences in today's housing market versus the past.

Property owners usually are clocking large amounts of equity. Homeowner equity has jumped by $1 trillion in one quarter, and according to recent data, barely 3% of properties hold negative equity. If someone's extra nervous about buying, then the equity that protects borrowers if their homes inexplicably lose value is going to give them some breathing room until the market moves back.

Homestead Title is a full-service title and escrow company. Since 1934, we have provided our customers with competent, thorough, and professional service. Before each closing, we search public records to clarify legal and financial risks for lenders, realtors, and other stakeholders in the real estate transaction process. Our energetic and capable team of real estate title professionals provides accurate investigations, rapid turnaround time, streamlined paperless delivery, and exceptional customer service. For more information, call us at (504) 581-6427 and let us provide you with a smooth and efficient real estate closing.