08
Apr
By support
Home Mortgage Tips

Can You Refinance into a VA Mortgage from Another Type of Mortgage? Yes, If You Qualify

Can You Refinance into a VA Mortgage from Another Type of Mortgage? Yes - if You Qualify VA mortgages stand out as one of the biggest benefits to men and women serving in the military. Although private lenders make the loan, the Department of Veterans Affairs guarantees all VA mortgages, which is why these loans come with favorable terms and benefits not found with other mortgage types.

The Benefits Of Refinancing To A VA Mortgage

A VA loan may very well be the borrower’s only option for putting no money down, as many lenders will cover 100% of the value of the home, thanks to the backing of Veterans Affairs. There is a ceiling on the amount covered depending on the area of the country, so contacting a qualified VA mortgage professional is the preferred way to discover limits locally.

VA loans also require no mortgage insurance, cover many of the costs associated with closing or refinancing and, in many cases, have lower mortgage rates than comparable loans.

Veterans who had never considered a VA mortgage may wish to take advantage of the flexible terms and the favorable market to refinance their current mortgage into one that offers tremendous benefits.

Qualifying For A VA Mortgage

Veterans Affairs mortgages are limited to service men and women and their spouses, a benefit for serving their country. After a set amount of service time veterans are able to apply for a certificate of eligibility that will allow them to apply for the loan.

Those who are eligible include most military members in active duty, members of the National Guard, veterans both discharged and retired, military academy cadets as well as any spouse of a deceased serviceperson.

Eligible Homeowners Can Refinance Through Cash-Out Refinancing

The Department of Veterans Affairs considers a conventional mortgage to VA mortgage refinancing to be the same as cash-out refinancing and treats it accordingly.

This process is as intensive as an initial mortgage because it will replace the current mortgage altogether, so all applicants are expected to go through the standard credit and underwriting process.

VA loans are incredibly beneficial to current military members as well as retired veterans who may have never considered taking advantage of the program. Although the mortgage can cover 100% of the value of a home, the actual amount varies depending on the area. The only way to know for sure how much will be covered and whether it’s the right time to refinance is to contact a mortgage professional who has experience with VA mortgages.

22
Mar
By support
Home Mortgage Tips

Retiring Soon? Learn How a Reverse Mortgage Can Add to Your Retirement Security

Retiring Soon? Learn How a Reverse Mortgage Can Add to Your Retirement SecurityIf you’re nearing retirement, you’re likely starting to think about your savings and retirement plan and how you can ensure a financially secure retirement. With your peak income-earning years largely behind you, you’ll need to work with what you have in order to ensure a livable retirement income. That’s where a reverse mortgage may be a sensible option.

How does a reverse mortgage work, and how can it help you to have a more financially secure retirement? Here’s what you need to know.

A Reverse Mortgage Is Tax-Free And Saves Your Social Security Benefits

Social Security benefits offer a basic form of income for senior citizens, but if you tap into your Social Security too early in your retirement, you could use up your available benefits in a short span of time. Deferring Social Security until later on in your retirement means that you’ll get an extra 7 to 8 percent per year you defer, which is why you’ll want to save your Social Security for as long as possible. But in order to do that, you need another income source to live on.

A reverse mortgage is a tax-free income source that you can use to fund the early part of your retirement, allowing your Social Security benefits to mature. Best of all, a reverse mortgage frees up your budget so you can invest more of your funds and collect returns later.

You’ll Never Owe More Than Your Home’s Value – And There’s No Set Repayment Date

A lot of loans have high interest rates and fixed repayment periods. This means that if you use credit cards or take out a personal loan, for instance, you’ll be locked into a set repayment date or won’t have a high enough borrowing limit – or if you do have a high borrowing limit, you’ll find that interest charges quickly add up.

Reverse mortgages have no set repayment date, which means that you can use the money from a reverse mortgage as needed without having to worry about repayment. You’ll also never owe more on your reverse mortgage than what your home is worth, so you’ll never find yourself underwater.

A reverse mortgage is a great way to ensure that you have a safe, stable retirement – and it can add an extra layer of security on top of your social security benefits. Are you considering taking out a reverse mortgage on your home? A qualified mortgage advisor can help – contact a mortgage professional near you to learn more.

08
Mar
By support
Home Mortgage Tips

The Pros and Cons of A Fixed Rate Second Mortgage vs. Opening a Home Equity Line of Credit

The Pros and Cons of Refinancing Your Mortgage vs. Opening a Home Equity Line of CreditWhen it comes to a mortgage and the financial stability of your home, there’s no such thing as too much you can know in the case of keeping your biggest investment safe. If you’re looking at paying off debt and are considering using the equity in your home, here are a few things you’ll need to know about refinancing your mortgage and home equity lines of credit.

Fixed Second Mortgage vs. HELOC

Refinancing your mortgage to access equity (without changing the existing first mortgage)comes in two basic flavors: a fixed rate mortgage or a Home Equity Line of Credit (HELOC). A fixed rate second mortgage is also known as a home equity loan. While you’re expected to pay the amount loaned back in monthly payments for a pre-determined number of years, you’ll receive this money at a fixed rate of interest. On the other hand, a home equity line of credit (HELOC) is similar to a credit card where the amount you can borrow is determined by your credit history and income, and funds are withdrawn using this line of credit, can be paid down, and then drawn back on again.

All About The Interest Rates

When you refinance using a fixed rate second mortgage, the interest rate will be fixed so you won’t have to worry about any volatile increases down the road. Since this qualifies as a second mortgage, the interest rate on it will be higher than your typical first mortgage but lower than a HELOC. When it comes to HELOC’s, the amount of interest you’ll be paying will be linked to the prime rate and will fluctuate with the market, and this means you may end up paying a higher amount of interest than you bargained on.

How The Interest Is Calculated

While refinancing your mortgage can seem like a great opportunity since you’ll be able to deal with a fixed interest rate, it’s worth noting that the way you’ll be charged is different. A mortgage refinancing will charge you interest on the total amount of your loan while a HELOC will only require you to pay interest on the money you’ve withdrawn from it, so you’ll want to consider which option works best for you.

When it comes to getting a second mortgage or opening a HELOC, there are pros and cons to both that should be considered before delving into either. As these can risk the security of your most important investment, you’ll want to carefully weigh what will work best for you. If you’re curious about other homes in your area or are thinking of downsizing, you may want to contact one of our local mortgage professionals for more information.