VA Mortgage | Orange County, California VA Loans

VA Loan Limits for Orange County, CA to be Eliminated in 2020

November 6, 2019 by Tim Storm

VA loan limits for Orange County, CA will be eliminated as of January 1, 2020. This is a big change from what has historically been a limit on Veterans’ ability to purchase a home in Orange County with no down payment. With VA loan limits in California eliminated, usage of the VA loan program should increase significantly.

How have the VA Loan Limits Been Set in Orange County?

Every N0vember, Federal Housing Finance Agency (FHFA) announces the Conforming Loan Limits for each county in the United States. The basic Conforming Loan Limit in 2019 for all counties in the United States was $484,350. But for counties where home prices are above the national averages, like in Orange County, the “High Balance Conforming” limit was set at $726,525. There were also many counties in California with limits set above $484,350 all the way up to $726,525. It just depends on the average sales price of homes in that county.

VA followed suit and set the Zero Down 100% financing VA loan limits to be equal to the Conforming (or High Balance Conforming) loan limit set by FHFA. So in Orange County in 2019 a Veteran could buy a home for $726,525 for No Down Payment. If the Veteran was to buy a home priced above the loan limit then they would need a down payment equal to 25% of the difference between the purchase price and the loan limit. For example, if a Veteran was to purchase a home in Irvine for $826,525 (an even $100,000 above the loan limit) then the down payment required would be $25,000 and the resulting VA loan would be $801,525. Now, in 2020, the Veteran can buy that same home with $0 down. The VA loan will be $826,525. This change will open up the options for Veterans to buy a higher-priced home in areas like Newport Beach, where the VA program has not been widely used. The elimination of VA Loan limits will also help Veterans looking to buy VA approved condos.

What about the Inland Empire?

Riverside County and San Bernardino County, or the Inland Empire, will benefit big time from this change. The Inland Empire’s loan limit was set at the basic $484,350 in 2019. That has made it difficult for Veterans looking to buy their first home in the Inland Empire only to find that homes in many areas were priced above $500,000. Now, the barrier to entry will be much easier to break through.

How Does This Affect VA Refinancing?

This will also help those Veterans who already own a home and are looking to refinance to pull cash out above the current VA loan limits. In 2019 VA did tighten the cashout refinance guidelines, making it difficult to pull cash out above 90% a properties value. And it is the “total VA loan amount” including the VA Funding Fee that has to be used in the 90% calculation. But 90% loan to value for a cashout refinance is still better than any other type of Conventional or Government loan program for 1st mortgages.

Eliminating the loan limits means a Veteran who is looking to pull cash out on a property valued at $1,500,000 could get a new VA loan of $1,350,000. At least theoretically. It is important to mention that VA issues the underwriting guidelines but does not actually fund VA loans. Bank fund VA loans. As of this writing, we are still waiting to see how aggressive the banks will get with cashout refinancing are Super Jumbo loan programs.

2020 will be a big year for the VA loan program. Veterans who typically didn’t take a serious look at the VA loan should now learn more about and compare it to other financing programs. VA tends to have lower 30 year fixed rates than other programs, especially in the lower FICO score ranges. Also, the debt to income ratios are not limited to 43% like most Conventional Jumbo loan programs. And only a 2 year wait period is required after a bankruptcy or foreclosure, compared to 4 to 7 years for other types of loan programs. And best of all, even though no down payment is required, there is no monthly mortgage insurance like there is on Conventional loan programs when the loan to value is above 80%.

If you are a Veteran considering a home purchase or refinance, make sure you talk to a Loan Officer who is knowledgable with the VA loan program.

Authored by Tim Storm, an Orange County, CA Loan Officer specializing in VA Loans. MLO 223456. – Please contact my office at Fairway Independent Mortgage Corporation. My direct line is 714-478-3049. I will prepare custom VA loan scenarios which will be matched up to your financial goals, both long and short-term. I also prepare a Video Explanation of your scenarios so that you are able to fully understand the numbers BEFORE you have started the loan process

Filed Under: VA Mortgage, VA Purchase Loans, VA Refinance Loans Tagged With: orange county va loan limits, va loan limits

Who is Exempt from the VA Funding Fee?

February 20, 2018 by Tim Storm

The VA Funding Fee is unique to the VA mortgage program. The funds from this fee go directly to the VA to help cover any losses from loans that default. The VA funding fee is an amount equal to a certain percentage of the loan amount which is based on a variety of factors. These factors include the type of military service performed, whether a down payment is going to be paid with the loan, and if this is the first time using the VA program or a subsequent use. The borrower has the option to either pay the funding fee in cash at closing or to include the funding fee into the financed loan amount. It is extremely rare that a Veteran chooses to pay the VA Funding Fee out of pocket versus financing it into the loan, but it is possible.

Funding Fee Exemption

The VA does allow exemptions to the Funding Fee, but only for a few eligible groups. The main group that is exempt from paying the VA funding fee are veterans that have a service-connected disability rating. The other group that is exempt are surviving spouses of Veterans who died in the service, or as a result of service-related disabilities.

These two charts below include some addition information regarding how the percentage paid for the VA funding fee is determined. This first chart provides information for VA purchase loans:

This second chart provides the percentage details for VA cash-out refinance loans:

Authored by Tim Storm, an Orange County VA Loan Officer specializing in VA Loan. MLO 223456. – Please contact my office at the Home Point Financial. My direct line is 949-640-3102. www.OrangeCountyVALoans.com. I will prepare custom VA loan scenarios which will be matched up to your financial goals, both long and short-term. I also prepare a Video Explanation of your scenarios so that you are able to fully understand the numbers BEFORE you have started the loan process.

Filed Under: VA Mortgage, VA Purchase Loans Tagged With: exempt from funding fee, va funding fee

Getting A VA loan after bankruptcy or foreclosure

July 18, 2016 by Tim Storm

Getting a VA loan after bankruptcy or foreclosure is really not that difficult for Veterans in Orange County, CA. But many Veterans do not realize how quickly the VA loan can become a viable option after a major credit event.

Foreclosure and bankruptcy are definite obstacles for many Veterans trying to buy a home, but with the VA mortgage program it is possible to maneuver around these obstacles more quickly than with other types of financing. Bankruptcy’s and foreclosures only require a two year waiting period before qualifying for a VA loan.

Waiting Period After Bankruptcy

There are two primary type of bankruptcy that an individual can file for. A Chapter 7 bankruptcy seizes an individuals assets and liquidates their value to satisfy the necessary debts. All debts are “discharged” through the bankruptcy. The VA program requires a waiting period of two years after a Veteran discharges a Chapter 7 bankruptcy. A Chapter 13 bankruptcy is a court-mandated process that restructures an individual’s debt and sets up a repayment plan. Chapter 13 repayment plans can take anywhere from three years to five years to complete. The VA loan program will allow a Veteran to qualify for VA loan after only a 12 month wait period, starting from from the date of the filing. The Veteran will need to prove that they have been making their Chapter 13 payments on time, but this is still a very opportunity for a Veteran to purchase a home. A potential borrower with Chapter 13 bankruptcy must also get permission from the bankruptcy trustee before taking on an additional monthly payment. It’s also important to note that it is possible to refinance into a VA loan and pay off the Chapter 13 with proceeds from the loan.

FICO Score Requirements for the VA Loan Program

Many VA lenders will look for a credit score of at least 620 when qualifying for a VA loan, but there are lenders who will go down to a 580 FICO score. Still, it is important to begin working on credit restoration immediately after the bankruptcy is discharged. To minimize the damage, it is very important to put a lot of effort into repairing and strengthening your credit score during their waiting period prior to qualifying. And definitely do not have any late payments after the bankruptcy is discharged.

VA Loan After Foreclosure or Short Sale

A foreclosure or short sale are also significant derogatory credit events. Most loan programs require wait periods of up to 7 years before qualifying for a loan. But VA only requires a two year wait period from the date of the foreclosure or short sale. The “clock” can start earlier than the actual recorded date of the foreclosure if the mortgage for the property was included in an already discharged bankruptcy and the Veteran can prove they moved out of the property prior to the bankruptcy discharge date.

Not all lenders underwrite the same. It is beneficial to meet with a local Orange County VA lender to ensure you are on the proper path toward future qualification. The VA loan specialist you consult with should be able to prepare custom loan scenarios that will provide you with the numbers you’ll need to know about before you start the home buying process.

Authored by Tim Storm, an Orange County VA Loan Officer specializing in VA Loan. MLO 223456. – Please contact my office at the Home Point Financial. My direct line is 949-640-3102. www.OrangeCountyVALoans.com. I will prepare custom VA loan scenarios which will be matched up to your financial goals, both long and short term. I also prepare a Video Explanation of the your scenarios so that you are able to fully understand the numbers BEFORE you have started the loan process.

Filed Under: VA Mortgage, VA Purchase Loans Tagged With: bankruptcy, foreclosure, VA Loan

Finding a VA Approved Condo in Orange County the Easy Way

June 30, 2015 by Tim Storm

Finding a VA approved condo in Orange County, CA just got easy. While most homebuyers and their real estate agents will first search for a condo and then go through the tedious process of finding out if the condo is even in a project that is approved for VA financing, there is now a website that is specifically for VA approved condo projects in Orange County.

OrangeCountyVACondos.com – VA Approved Condo Search

At OrangeCountyVACondos.com an Orange County Veteran looking for a condo can quickly find VA approved condos in the city of their choice. The site is first broken up into four sections of Orange County. Each city is listed as well. For example, if a buyer wishes to find VA approved condos in Irvine, all they need to do is click on the appropriate Irvine link, and wallah, you are presented with the list of condos, including information on each condo along with photo’s.

Make Sure the Condo is VA Approved Before Making an Offer to Purchase

It is important to double check to make sure the condo you choose to make an offer to purchase on is still VA approved. An experienced VA lender will be able to quickly verify. It is also very important to talk with an Orange County VA lender who can quickly prepare custom VA loan scenarios and work on the PreApproval. By figuring out the financing before making the offer there is a far better chance of having success with not only getting the office accepted but also actually closing escrow.

Authored by Tim Storm, an Orange County VA Loan Officer specializing in VA Loan. MLO 223456. – Please contact my office at the Emery Financial. My direct line is 949-640-3102. www.OrangeCountyVALoans.com. I will prepare custom VA loan scenarios which will be matched up to your financial goals, both long and short term. I also prepare a Video Explanation of the your scenarios so that you are able to fully understand the numbers BEFORE you have started the loan process.

Filed Under: VA Mortgage, VA Purchase Loans Tagged With: va approved condos

CalVet Loan or VA Loan | Which is Better for Orange County Veterans?

January 29, 2015 by Tim Storm

Which loan program is better for Orange County, CA Veterans – CalVet or VA? It depends on the Veteran and the situation. It also depends on what is happening with interest rates. But in most cases the standard VA loan program will be the best option for a Veteran in Orange County, CA.

Important Differences Between the CalVet and VA Loan Programs

Max Loan Limit for 100% Financing. The 100% VA Loan financing limit in Orange County for a standard VA loan is $625,500 in 2015. And there is are income limitations for VA. Also, it is possible to go even higher than the $0 down limit with VA. This is called a Jumbo VA Loan. Many VA lenders will lend up to $1,500,000. CalVet will currently lender to $611,901 in “non-target” areas, and the Veteran must have income that is less than $108,360 for a 2 person household, or $126,420 for a 3 + person household. The fact that VA has no limitations just makes it easier to work with.
Interest rates. CalVet has a few different interest rate offerings, depending on the “Mortgage Bond” the loan is based on. The QVMB program interest rate is 3.75% with a 4.09% APR. The QVMB has a max loan of $521,250. The QMB has a rate of 4.25% with an APR of 4.6%. The QMB is the program with income restrictions but the loan limit of $611,901. As of this writing, standard VA 30 year fixed rates for loans under $417,000 are 3.25% with a 3.291 APR. For VA loans over $417,001 up to $625,500, interest rates are 3.5% with a 3.651% APR. *Rates effective January 28, 2015. Subject to change.
VA Loan fees are typically lower than fees charged on the CalVet loan program. Also, many VA lenders will be able to offer a rate/fee option that would include a lender credit for all closing closing costs. CalVet charges a 1% Origination Fee on all loans. There will be much more flexibility with a VA loan in helping the Veteran purchase a home with no money out of pocket.
Refinancing if interest rates drop. The CalVet loan does not have a refinance program for situations where interest rates drop. On the other hand, the VA program has what is by far the easiest refinance program. It is called the Interest Rate Reduction Refinance Loan, or IRRRL. With the IRRRL, there is no appraisal or income documentation required from the VA loan borrower to complete the refinance. A CalVet borrower would need to refinance completely out of the CalVet loan and into a VA loan in order to take advantage of lower interest rates. However, that is a tough way to go because since the CalVet borrower doesn’t currently have a VA loan, they would need to do a full refinance, with appraisal, termite inspection and clearance, income documentation, and VA Funding Fee. It would have been easier to just go VA in the first place.
Loan versus contract of sale. CalVet will actually hold legal title for the Veteran because CalVet us a Land Contract, or “Contract of Sale”. Basically, CalVet purchases the property and then sells it to the Veteran using a Land Contract. CalVet holds title, while the Veteran holds “equitable title”. With VA, the Veteran receives title immediately upon purchasing the home, which is like other standard types of financing.

How To Know Which Loan Type if Best for You

The best way to know which program is best for you is to contact an Orange County Military Lending Specialist, who can prepare custom loan scenarios based on your long and short term financial goals. Financing a home is the biggest investment most people will ever make, so making sure you’re research includes all your option can save thousands of dollars over the life of the loan.

Filed Under: VA Mortgage Tagged With: calvet, va versus calvet