January 10th, 2014
Hello, again! It is FRIDAY! Time for Friday FAQs! Interesting addition today, and I hope you enjoy. Lots of great questions this week. Please feel free to send in your questions. Here we go...
- We are interested in buying a new home. We have VA eligibility an have had a VA loan previously. We realize our funding fee will be higher (3.30% for subsequent use). If we have a down payment, the funding fee is reduced, is it worth it for us to put money down? You are correct the funding fee with no down payment purchasing a property of 417,000 or less is 3.30%. With 5% down, the funding fee is reduced to 1.50% and with 10% down the funding fee would be 1.25.% Depending on the purchase price, it may be worth your consideration to put 5% down for the reduced funding fee. First, we should compare the payments at "0" down and 5% down to determine if the monthly savings warrants the use of your funds for down payment. In most cases, the savings is not substantial enough to warrant the use of your savings.
- We helped my son purchase a home. He was overseas when we closed on the loan, so we took an advance on our credit line to close. My son has VA eligibility, can he refinance into his own name and pay back our credit line? As long as your son qualifies for the loan, and there is a note recorded against the property, yes.
- We are interested in purchasing a new home. We want to put down as little money as possible. We have heard of no mortgage insurance programs, what is it? Honestly, there really is no such thing as a no mortgage insurance program. Anytime you borrow in excess of 80% of the purchase price on a first mortgage, there will be some type of mortgage insurance component. The "no mortgage insurance" program simply means that there is no monthly mortgage insurance inclusive in your monthly payment. Your mortgage insurance is paid by the lender, for this, you pay a slightly higher interest rate.
Please feel free to contact me with any questions you might have. I look forward to working with you and your clients.