VA Refinancing Options For Eligible Orange County, CA Homeowners

July 9, 2013 by

Orange County VA Loan ApprovalVA mortgage loans allow eligible Orange County Veterans to refinance their home to take advantage of lower interest rates that can ultimately save you sizable sums of money in both the long-run and the short-run by lowering your monthly payment. What many don’t realize is that the current loan does not need to be a VA loan.

Many Orange County home owners are finding that if they currently have a Conventional loan, they can refinance into a VA loan if you are an eligible veteran or member of the armed services. Transferring from a Conventional mortgage to a VA mortgage is known as a “Conventional to VA Refinance Loan” and is a very straightforward process. Technically, VA considers a refinance from a non-VA loan into a VA loan to be “cash out”, even if the borrower is not getting cash back. And while many lenders will only allow a Conventional to VA refinance up to 90% of the properties value, there are lenders who closely follow VA guidelines and allow for 100% loan to value financing. In Orange County, where the VA 100% financing limit in 2013 is $668,750, this opens a lot of possibilities. And don’t forget, many lenders will finance up to a $1,500,000 VA loan. Some equity is required when the loan is greater than the 100% limit, but not as much as would be required for a “Jumbo” Conventional loan.

The “Conventional to VA Refinance Loan” process is described in detail in our article Can I Qualify For A VA Refinance If I Currently Have A Conventional Loan?

A common question related to VA refinancing is whether or not you combine a Conventional 1st mortgage with an equity line or fixed rate second mortgage. The answer is…you can! Even if the 2nd is greater than 100% of the properties value it is still possible to combine a portion of the equity line with the first mortgage and “subordinate” the remaining 2nd mortgage. There are loan to value restrictions in this scenario, typically capping out at 115% of the properties value.

VA IRRRL for Orange County Homeowners

Of course, you are also allowed to refinance your home if you currently have a VA mortgage. An Interest Rate Reduction Refinance Loan (IRRRL) is also known as a VA Streamline Refinance.  This is a fast and easy way to lower your monthly mortgage payment and interest rate! And typically with the lender using a “lender credit” to cover some or all of the closing costs.

Some of the benefits of a VA Streamline Refinance or IRRRL include:

  • In most cases you will not need to have an appraisal prepared. This saves time and cost.
  • No income verification. Remember when you purchased your home and had to provide two years income documentation, paystubs, first born and a pint of blood.( Just kidding.)  The IRRRL program is “streamlined”, meaning its a very easy process. The lender will verify you have a job, but does not ask for income documentation. As a matter of fact, the income section of the loan application is left blank.
  • An extremely low VA Funding Fee – only 0.5%. And in many cases the lender can provide a loan scenario where even the VA Funding Fee is covered with the “lender credit.”

Consult with an Orange County, CA VA Loan Specialist

It is important to make sure to talk with a VA loan specialist. VA financing tends to be specialized.  The guidelines for VA financing are much different than for Conventional loans, and consulting with a loan officer who is not familiar with VA financing may result in answers that are not correct. So make sure you are getting the correct answers to your questions when it comes to VA financing.

Filed Under: VA Cash out Refinance, VA Mortgage, VA Refinance Loans Tagged With: , ,

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

September 26, 2011 by Leave a Comment

The CalVet loan program or the standard VA loan; which is better? It all depends on when the question is being asked and where you plan to buy a home. There are several distinct advantages the standard VA loan program has as of right now, September 2011, over the CalVet loan program. The biggest factor pushing most Veterans and active duty military personnel into the standard VA loan program is interest rate. But there are differences in loan limits which can sometimes favor the CalVet program depending on the California county the Veteran is purchasing in.

Low Interest Rates Favor the VA Loan Program

2011 has been a banner year for low interest rates. In September 2011, interest rates even hit all time lows. VA 30 year fixed rates are averaging 3.75% (3.98% APR)APR to 4.25% (4.48% APR) this year. VA interest rates have been consistently low for the last several years. CalVet loan program interest rates range from 5.5% (5.9% APR) to 5.95% (6.36% APR), which is a full 1.75% spread over the standard VA loan progam interest rates. To show what that interest rate spread does to the payment, lets compare a $300,000 loan. At 4%, the payment is $1,432. At 5.5%, the payment is $1,703. That is a $271 monthly payment difference, in favor of the standard VA loan program.

VA Loan Limit in Orange County is $700,000 | CalVet is $521,250

The VA loan limit for 2011 in Orange County, CA is $700,000, meaning a Veteran can purchase a home with Zero Down in Orange County (and Los Angeles) up to a $700,000 purchase price. A Veteran can even go with a higher priced home by bringing in a small down payment. The CalVet loan program caps out at $521,250. So for Orange County homebuyers looking at properties above a $521,250 price, who are undeterred by the higher interest rate a CalVet loan has, would still go VA because of the high loan amounts allowed.

VA vs CalVet | Homeowners Insurance

One advantage CalVet does over VA is a comprehensive homeowners insurance policy, which includes guaranteed replacement for your home, even in natural disaster situations like an earthquake or flood. Private insurance companies will charge extra for this type of coverage, and “guaranteed replacement” in California is very difficult to come by.

CalVet Does not offer a Refinance Program

CalVet requires that you apply for the loan before taking title to the property. Translated, this means it is only for a purchase, not a refinance. In contrast, VA offers the IRRRL program, or Interest Rate Reduction Refinance Loan. With this program you can lower your rate (if rates drop) without needing a full appraisal and without needing to qualify. It is a very “streamlined” process. However, it is only for current VA loan borrowers. For those Veterans who wish to refinance into a VA loan from a Conventional or FHA loan, they would need an appraisal and full income documentation. But the good news is they could refinance up to 100% of the properties value.

CalVet offers home Improvement loans up to $150,000 at competitive rates, which is a nice feature. VA does not currently have a home improvement loan program. However, another option is to use the FHA 203K Rehab loan program, which can later be refinanced into a VA loan.

VA Loan Versus CalVet Loan | Which is Better?

It depends. For most Orange County Veterans, the standard VA loan program is the way to go. Lower interest rates and higher loan amounts are two benefits that are hard to ignore. But it is important to keep abreast of changes. Who knows. VA could lower the 100% financing limit in 2012. Or interest rates, which change daily, could go up for the VA program. It is important to consult with an Orange County, CA VA loan expert who can prepare custom loan scenarios based on a Veteran’s qualifications. The VA loan expert can then help the Veteran get a VA Loan PreApproval.

Authored by Tim Storm, an Orange County, CA FHA and VA Loan Officer – Please contact my office at Emery Financial for more information about an Orange County, CA home loan.  Direct:  949-829-1846   MLO 223456

www.OCFHALoans.com

Contact us for your Orange County VA Mortgage:

Call our office today and see how we can help you and your family.

tstorm (at) ochomebuyerloans.com

Filed Under: VA Purchase Loans Tagged With: , , , ,

Lower VA Funding Fee will Benefit Orange County, CA VA Loan Borrowers

September 21, 2011 by 1 Comment

Good news for Orange County, CA Veterans as the Department of Veterans Affairs announced that the Funding Fee on VA loans will decrease. VA Circular 26-11-12, released on September 8, 2011, gives the breakdown of the decrease, which could save Orange County homes buyers using the VA loan program throusands of dollars, depending on the purchase price of the home they are buying. The new Funding Fee rates go into effect for all loans closed on or after October 1, 2011, and is in effect for 12 months.

VA Funding Fee Chart for Loan Closed On or After October 1, 2011

Example of Benefit to Orange County, CA VA Loan borrowers

How much will this be a benefit to Orange County home buyers using VA financing? Well, because home prices tend to be on the high end in most parts of Orange County, the lower Funding Fee percentages will save thousands. For example, an Orange County Veteran purchasing a home in Irvine for $500,000 with no down payment, and using their VA eligiblity for the first time, would need have a Funding Fee of $10,750 added to their loan. ($500,000 * 2.15% = $10,750.) Using the new percentage, the Funding Fee would only be $7,000. ($500,000 * 1.4% = $7,000.) That saves this Irvine Veteran$3,750. The Funding Fee is financed into the loan, so the Veteran won’t actually feel the savings immediately, but there will be an effect on the monthly payment, in this case about $35 per month.

VA Loan PreApproval is the First Step

The first step in determining how this change will effect your purchase is to contact a local Orange County VA lender. A VA loan specialist will be able to prepare custom loan scenarios based on your qualifications and payment comfort level. The scenarios will give you a complete breakdown of the purchase price, loan amount, payment, closing costs, and amount needed to close. If you are planning on going with a “VA NO NO“, where you not only don’t come in with a down payment but also have the seller pay your closing costs, the scenarios will let you know how much of a seller credit is required. It is also possible to adjust the interest rate in order receive a lender credit towards closing costs. Your financing should be determined prior to making offers on homes.

Filed Under: VA Mortgage Tagged With: , , ,

Closing a VA Loan in Orange County in 30 Days or Less is Easy

October 30, 2010 by

Closing a VA loan in Orange County in 30 days or less is not only possible, but is easy. But for the loan to close this quickly, all parties involved must be ready to react quickly to requests from the lender.

What Needs to Happen For a 30 Day VA Loan?

  • Borrower – it helps tremendously if the borrower has already met with an Orange County Direct VA Lender and has a PreApproval in hand. If the borrower is already PreApproved for a VA loan, then the lender should have tax returns, paystubs, bank statements, loan application, and credit. The lender may need to update the file with new paystubs or bank statements, but PreApproval will give the lender a good head start in closing the deal quickly.
  • Real Estate Agents – The lender will need the complete purchase contract and any counter offers, as well as escrow company contact information. The Orange County VA lender needs this information so they can contact escrow immediately.
  • Escrow Company – The lender will send the “Initial Fees Worksheet” to the escrow company, along with the lenders contact information. The lender needs to receive the Estimated HUD-1, also known as the Estimated Closing Statement, from the escrow company prior to completing the Good Faith Estimate and loan disclosures for the borrower. The appraisal can’t be ordered until the lender has sent loan disclosures out, so receiving the Estimated Closing Statement from escrow is an important step in closing escrow in 30 days or less.
  • Appraisal – The VA appraisal is ordered by the lender through the VA Portal. It can take anywhere from one to two weeks to receive the appraisal from the day it is ordered, so the lender needs to order the appraisal as soon as possible.

If there is a break in the chain, if one of the parties involved in the transaction causes a delay, 30 days can quickly turn into 35 or 40 days. For this reason, the lender should have a timeline mapped out and make it clear to all parties that items needs to be received quickly. An experienced lender can pull off 30 days VA loan closings almost every time as long as everyone works as a team.

VA Loan PreApproval is the First Step

The first step is to get PreApproved for a VA loan before making an offer on a home.  Finding an experienced VA loan officer who works with a Direct VA lender in Orange County is important. While it is easy to find VA lenders on the internet, Orange County has some very experienced VA loan officers. Also, it can be helpful to meet face to face with the loan officer and get all of your questions answered.

Authored by Tim Storm, an Orange County, CA  VA Loan Officer – Please contact my office at Home Point Financial for more information about an Orange County, CA home loan.  949-640-3102. MLO 223456

Contact us for your Orange County VA Mortgage:

Call our office today and see how we can help you and your family. Ask for your Free First Time Home Buyer Report.

tstorm (at) ochomebuyerloans.com

 

Filed Under: VA Purchase Loans Tagged With: , ,

Good News for Orange County VA Loan Borrowers | Condo Buyers to Benefit

May 22, 2010 by

This week the VA released VA Circular Letter 26-09-19, which contained good news for Orange County VA loan borrowers trying to purchase a condo. The Circular clarified the VA position as to whether they would allow a VA loan on an FHA approved condo. Up until recently, VA had allowed VA financing on Orange County condo projects that were either on the VA approved list or the FHA approved list. However, at the beginning of 2010 FHA changed their condo approval guidelines, which resulted in VA changing their position and not allowing VA financing on FHA approved condo projects.

Orange County VA Approved Condos

Orange County VA Approved Condos

Why is This Good News for Orange County VA Loan Borrowers

This is great news for Orange County VA loan borrowers who are searching for a condo to purchase. The VA condo approval list in Orange County is somewhat limited. There are quite a few properties that are on the FHA approved condo list which are not on the VA list. Now that VA is allowing FHA approved condo projects for VA loans, Orange County Veterans have more properties available to them. There are a few guidelines and dates to keep in mind.

  • VA can accept HUD/FHA/USDA condominium approvals if the project approval was dated prior to December 7, 2009.
  • VA cannot accept HUD/FHA/USDA condominium approvals if the project approval was dated on or after December 7, 2009.
  • VA cannot accept phases annexed into the project approved by HUD/FHA/USDA if the annexation occurred on or after December 7, 2009. If this is the case then VA will need to review an full project approval package for the entire project.

How Do I find VA Approved Condo Projects in Orange County, CA

It is still tricky to find out if a particular condo is VA or FHA approved if all you have is an address.  But it’s not too difficult to get a list of approved FHA and VA condo projects within a city or zip code. Just go to the FHA or VA condo approval sites and search by whatever geographical location indicator you wish.

It can be very helpful to consult with an experienced Orange County VA Loan officer who can not only help you to find approved condo projects, but can also take care of the first step in buying a home, which is to get Prequalified and then PreApproved for the mortgage. Once PreApproved for a VA loan, you will be able to confidently make an offer on a home.

Authored by Tim Storm, an Orange County, CA  VA Loan Officer MLO 223456– Please contact my office at Emery Financial Group for more information about an Orange County, CA home loan.  877-786-4243 x 7.

www.OCFHALoans.com

Contact us for your Orange County VA Mortgage:

Call our office today and see how we can help you and your family. Ask for your Free First Time Home Buyer Report.

877.786.4243 x 7 | tstorm (at) ochomebuyerloans.com

 

Filed Under: VA Purchase Loans Tagged With: , ,
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