Dispelling the VA home loan Funding Fee

Posted in Shane's Blogs

If you have ever considered using your VA Home Loan Benefit, you may have heard about the “VA Funding Fee.” There are a lot of rumors and misinformation about who pays the funding fee, and where it goes, but with the help of the VA Lenders Handbook and the Regional VA loan Center in Denver Colo., things can be clarified.
The reality is that in order to defray the cost of administering the VA home loan program, some veterans must pay a funding fee to the VA at loan closing.

To learn more about funding fees click the link below to read an article written by our Military and VA Home Loan Unit  published in the Kitsap Navy News…

http://kitsapnavynews.com/blog/dispelling-the-va-home-loan-funding-fee-commentary/633/

Have You Heard of The Kitsap Navy News Yet?

Posted in Shane's Blogs

As You know I specialize in VA loans and am a member of the Legacy Groups “Military and Veteran Home Loan UNIT”

The Kitsap Navy News- a new publication specifically targeted to those who serve in the Navy, asked me to write a monthly column on different valuable  information their readers might appreciate.

Here is a link: Kitsap Navy News-

article about BAH

Meet Adam & Janna

Posted in Shane's Blogs

One of the best parts about my job that I enjoy  is helping people get into the home of their dreams.   Here is a success story from one of my recent clients and friends the Deardorffs…

Meet Adam & Janna:They found a home that had been neglected for years and needed approximately $30,000 worth of work to make it livable.

Adam happened to be a general contractor and needed to find an affordable home for his big family.We had an appraisal done based on what the home would be worth after completion of the project, and the numbers looked great. Within 14 days of meeting Adam & Janna, we closed the loan on the purchase and begin dispersing money to them to fix the place up according to plan.

After 8 weeks of work, the home was completely remodeled. We refinanced the home into a permanent loan at a low interest rate. They got a great deal because they had so much equity in their home now; in fact they had 20%.The pictures say it all.

Here’s the before & after:

BEFORE -

AFTER -

If you are intrested or want to know more about loans please feel free to call me I’m here to help you.  360-698-6471

Shane McGraw

Lic# MLO-90072

Phone (360) 698-6471
Fax  (425) 283-1024

Email:  Shane.Mcgraw@legacyg.com

Lender Letter: Fannie Mae’s loan limits

Posted in Shane's Blogs

 Lender Letter LL-2010-13 November 19, 2010

TO: All Fannie Mae Single-Family Sellers and Servicers

Confirmation of Conventional Loan Limits for 2011

The purpose of this Lender Letter is to publish Fannie Mae’s loan limits for 2011 for all conventional mortgage loans. The Federal Housing Finance Agency (FHFA) has issued the loan limits that will apply to conventional loans to be acquired by Fannie Mae in 2011. The first mortgage loan limits are defined in terms of general loan limits and high-cost area loan limits.

 First Mortgage Loan Limits The following chart contains the general loan limits for 2011, which remain unchanged from the 2010 general loan limits:

 The high-cost area loan limits for mortgage loans originated in 2011, pursuant to FHFA’s announcement, are as follows:               

1. For mortgage loans originated on or before September 30, 2011, loan limits remain unchanged from the 2010 high-cost area loan limits. The maximum limit is $729,750 for a 1-unit property in the continental United States, established under the recently-enacted Congressional continuing resolution (Public Law Number 111-242), and referred to by Fannie Mae as “temporary”.
2. For mortgage loans originated after September 30, 2011, revised limits will apply. The maximum limit is $625,500 for a 1-unit property in the continental United States, established under the Housing and Economic Recovery Act, and referred to by Fannie Mae as “permanent.”

High-cost area loan limits are established for each county (or equivalent) and are published on eFannieMae.com and on FHFA’s Web site.

High-cost area loan limits are derived from median home prices estimated by the Federal Housing Administration (FHA) of the Department of Housing and Urban Development (HUD). FHA will permit a 30-day appeals period during which requests for individual area median home price increases will be evaluated. FHFA will issue a subsequent announcement if any individual high-cost area loan limit is increased as a result of the appeals process. Updates resulting from subsequent FHFA announcements will be posted on eFannieMae.com.

Lenders are responsible for ensuring that the original principal balance of each mortgage loan does not exceed the applicable maximum loan limit for the specific area in which the property is located. To assist lenders in determining the applicable limits, Fannie Mae posts reference material on eFannieMae.com, including the Loan Limit Geocoder™, which lenders can use to look up loan limits based on a specific address (or batch of addresses).

Any updated loan limits will be implemented in Desktop Underwriter® (DU®) Version 8.1 and DU Version 8.2 the weekend of December 11, 2010. Lenders must manually apply the 2010 loan limits to DU loan casefiles underwritten after the weekend of December 11, 2010 that will be acquired by Fannie Mae on or before December 31, 2010.

Second Mortgage Loan Limits

For second mortgage loans, the loan limit for 2011 is $208,500 (or $312,750 in Alaska, Guam, Hawaii, and the Virgin Islands). Furthermore, the sum of the original loan amounts of the first and second mortgage loans may not exceed the applicable loan limit for first mortgage loans based on the location and the number of units of the subject property. These loan limits apply whether or not Fannie Mae owns or has an interest in the first mortgage loan. As set forth in the Selling Guide, lenders must obtain approval from Fannie Mae to sell and service second mortgages.

Origination Date and Original Loan Amount

The general loan limits and the second mortgage loan limits apply to all conventional mortgage loans regardless of loan origination date. (The loan origination date is the date of the note). For high-cost areas, the “temporary” high-cost area loan limits for mortgage loans originated in 2011 apply to high-balance mortgage loans with a note date on or before September 30, 2011. The “permanent” high-cost area limits apply to high-balance mortgage loans with a note date after September 30, 2011. All of the loan limits apply to the original loan amount of the mortgage loan, not to its balance at the time of purchase by Fannie Mae.

Lenders are reminded of the following additional requirements:                   

A modified mortgage loan that had an original loan amount that exceeds the current loan limits is not eligible for purchase by Fannie Mae, even though the balance may have been paid down at the time of the modification to or below the current applicable loan limit.

High-balance mortgage loans are subject to unique eligibility and delivery requirements. Refer to the Selling Guide, Chapter B5-1, High-Balance Mortgage Loans.

Lenders who have questions about this Lender Letter should contact their Customer Account Team.

John S. Forlines

Vice President

Single-Family Chief Risk Officer

Kitsap County Fact

Posted in Shane's Blogs

Kitsap County Fact Sheet

• Home prices in the Bremerton-Silverdale market are expected to “shoot up by a total of 44.7 percent over the next four years – 9.7 percent annually – the highest forecast among 384 metropolitan areas survey nationwide per Moody’s Economy.com.          Bloomberg BusnessWeek August 3, 2010

• “The unemployment rate in Kitsap County dropped sharply in June to 7.2 percent….”   Kitsap Sun July 15, 2010.

• Kitsap gained roughly 100 jobs each in construction, retail and leisure and hospitality in June 2010.  Kitsap Sun, July 15, 2010.

• Newsweek Magazine identifies Central Kitsap High School, Silverdale, in the top ten high schools in Washington State.  Newsweek, June 2010

• Moody’s Economy.com “expects home prices in the Bremerton-Silverdale area to increase by an average of nearly 9 percent annually from the second quarter of 2009 through the same period of 2019.”  US News and World Report 2010 Money Guide, March 2010

• “Despite recent declines, median house prices have risen 47 percent in Kitsap Co. since 2002.  That beats the 37, 36 and 35% increases in King, Snohomish and Pierce Counties, respectively.”              Seattle Times  1/27/10

• US News and World Report Lists Bremerton/Silverdale as #1 of the top 10 housing markets for the next 10 years.  “A large military presence helps insulate the local economies from volatility.”

US News and World Report, June 2009

• “Home prices will increase an average of 5.2% annually in the next decade.” 

Kitsap Sun, July 09 (referencing US News and World Report)

• “BEST CITIES FOR A HOUSING RECOVERY” Bremerton, Washington is listed #5 on the list of “which cities are in the lead on the road to recovery”.  

  Forbes.com, August 13, 2009

EXPANDING MILITARY PRESENCE:

• Aircraft carrier USS Nimitz will be homeported in Bremerton starting Dec 2010 for 16 months of maintenance, potentially adding over 800 families to the community – Cmdr Traverse, Executive Officer, Naval Base Kitsap, March 4, 2010.

• “….Navy families already are starting to relocate to Bremerton in anticipation of the aircraft carrier USS Nimitz arriving in December.” Kitsap Sun May 18, 2010

• USS Pennsylvania arrived at PSNS for refueling, requiring 500,000 man-days of work.  This is a $201 Million dollar project.             Kitsap Sun 12/3/09

• A $124.5 million rebuilding of the pier that will house the Nimitz will be completed in time for the arrival of Nimitz.

• The House Military Construction Appropriations Subcommittee accepted an amendment from US Rep. Norm Dicks to add $6.2 million in improvements to Naval Base Kitsap’s Missouri gate.   Kitsap Sun, July 15, 2010

NEW BUSINESS DEVELOPMENT:

• The US Department of Energy awarded a $4.88 million grant to pay for energy use assessments in more than 5,000 business and homes, including 1,000 in Bremerton.  Kitsap Sun,  June 11, 2010

• Groundbreaking festivities were held on June 4, 2010 to mark the start of construction on the Hazelwood Family YMCA, an 85,000 square foot facility that is the first component of a campus that will “eventually become a hub for recreation and the performing arts, as well as the home of a new Silverdale library”.  Kitsap Sun June 3, 2010

• Tele Tech Holdings Inc. reports that they will hire 275 full time employees between March and the end of June, 2010 – a 55% increase in their work force in Kitsap County.       Kitsap Sun March 12, 2010

• The Port of Kingston and the community celebrated the christening of the Spirit of Kingston on Sunday. The $2.5 million boat (passenger only ferry) will serve commuter runs to Seattle this fall.   Kitsap Sun March 28, 2010

POSITIVE REAL ESTATE TRENDS

• “Through five months, NWMLS members in 21 counties have notched 35,398 pending sales, outpacing the same period a year ago by 6,707 transactions for an increase of more than 23 percent.”  Kitsap County Association of Realtors website,  June 4, 2010

• “The volume of closed sales rose 27.3 percent from a year ago, rising from 4,154 completed transaction to 5, 290 closings.”  Kitsap County Association of Realtors website , June 4, 2010

• There has been a dramatic (50+%) downturn in new construction listings in Kitsap County, with only 25 new listings in June 2010 as compared to 57 in June 2009.  Northwest Multiple Listings Statistics, June 2010.

Put your BAH to work for you

Posted in Shane's Blogs

Buy a home and put your BAH to work for you.

What allowance is specifically given to active duty members of the military to cover the cost of the roof over their head? The allowance is called Basic Allowance for Housing; most commonly referred to as BAH. This can be a great financial tool for the savvy consumer.

You’ll receive this income when you live outside of base housing. If you have a family you receive even more to cover the cost of a bigger home to provide your dependents a comfortable and safe place to live.

This allowance is something, as an active duty member, that you have earned as a form of remuneration and you definitely deserve to make the most of it.

If you’re an E-4 with dependents and in the market to buy an average priced 3 bedroom home in our area, you could easily pay the same amount whether you’re paying your landlord or a mortgage payment.

When you make a monthly mortgage payment you’ll receive a form from your lender for the full amount of the interest you paid out during the year. This interest may be deducted from your taxable income, greatly offsetting your tax liability.

Additionally, BAH is income you receive that you do not have to pay taxes on.

If you continue to rent, each month you give your BAH to your landlord to help pay their mortgage. They’ll claim the mortgage interest deduction on their taxes and may greatly offset their own tax liability, passing over your own financial interest.

Take the benefits of tax free income, apply it to an asset, in this case a house for you and your family, and help your money grow in more ways than one.

For those of you who don’t know, your loan is backed by VA. This means that a lender can make a loan for you and know that if you default, they will be recouped their losses by the government. Lenders love the reassurance of a loan that is backed by the government so they pass on better rates to veterans.

 From a Loan Officer’s perspective, VA loans are easy to set up. Lenders offer highly competitive rates compared to Conventional financing with the added bonus of no money down, even for first time homebuyers.

Renting is actually costing you money in the long run. A smart consumer would take this special allowance and put it toward an asset that helps them possibly pay less in taxes, grow equity (value) in their home, and have a place for them and their family to call their own.