Everything You Need to Know about VA Streamline Loans

If you or someone you know and care for has served in the military, they may qualify for a VA streamline loan. This type of VA loan is one of the most common out there and offers quite a bit for our active duty and retired armed services members.

At Indigo Mortgage, we really like to show our support of the United States military, which is why we enjoy keeping you all updated on VA loans.

Veterans Affairs Streamline Loan

The VA Streamline Loan is a program that has been specifically and exclusively designed for our military members. Using certain approved lenders and guaranteed by the Federal Government, the VA Streamline loan is one of the most common VA loans.

The first step is qualifying and here is how you know if you do:

• Military service persons must have 181 days during peacetime and 90 during wartime or have served 6 years in the reserves or National Guard.
• Spouses of any service member killed in the line of duty also qualify.
• Typically, any honorably discharged soldier will meet the above criteria and qualify.
• You can also qualify while still in active duty.
• However, a dishonorable discharge will disqualify you from any Veterans Affairs programs and benefits.

In a nutshell, the VA Streamline Loan allows you to refinance and lower your monthly mortgage and as long as you meet the Veteran Affairs’ simple requirements, you shouldn’t have any problems.

The VA Streamline Loan requirements are as follows:

• Be current on your mortgage payment and have no more than a single 30-day late payment in the past year. Basically, you just need to have kept up on your original loan payment.
•  The new loan payment needs to be lower than the previous. Obviously, you would want that and this is here to make sure you don’t get used by some lesser than reputable mortgage company.
• You are not allowed to receive any cash from the Streamline Refinance.
•  You must provide documentation that proves you have previously resided at the property. In other words, you can’t lower your girlfriend’s second cousin’s mortgage payment with your military benefits or do so on an investment property.
• You must have previously used your VA eligibility on the very property you are using to refinance.

Due to its simple nature, the VA Streamline Loan is really quite popular and with requirements that are easy to meet, it is no wonder as to why it is the most used VA loan service. 

The Rundown on Your Credit Score

Credit is a big part of everyone’s lives. Sure, we don’t always want to get started and dip our feet in the world of credit, but it is pretty much a guarantee that you will need to at some point. 

Because unless you can pay for everything upfront, cars and houses all in full. You will need to take out a loan and borrow from a lender and this lender is going to be very interested in your credit history.  

This blog provides some key information on your credit and how to work on fixing your credit score if it is too low.

Analyzing Credit

The credit system is quite complicated, but not so terribly complicated that you cannot understand. Sure, you might not get every detail, but it is pretty easy to figure out the ones that matter.

Let’s start with something simple like the score. Just like in grade school when it comes to credit, the higher your score, the better. One example of a great credit score would be 830, which may not be the very best, but it is pretty close to it.

In contrast, a 550 credit score is an example of a very low credit score that will most likely not get you approval on any kind of loan. Once again, that score isn’t the very worst you can get, but it is also not good at all.

Your credit score is determined comparatively with millions of others. Companies will take a look at your credit report and then decide if the risk is too high or not for them to lend to you. Often times, it helps to be in the very middle of the risk factor as the banks look for people they feel will not default on their loans.  

Saving Credit

So do you have a low score? If that is the case, don’t fret because with some work you will find there are ways to get your score up. The first step is to make payments on time. Even if you are just paying the minimum, it is important that you make the payments on time.

The second step is that, once you have paid off your credit cards, be sure to keep their balances low. Banks see this, like this, and, as a result, will consider you to be less of a risk.

When applying for a home loan, remember that all companies assess risk differently, so if at first you don’t succeed, be sure to try again. Remember to keep your balances low and you will find your credit score on the rise. 

As a result, you will become less of a risk to the banks. When you are less of a risk, you are more likely to qualify for the mortgage loan you want to get that dream home.

The ABC’s of Mortgage Loans

When you are seriously shopping around for a house and mortgage company, you will probably begin to feel a bit overwhelmed. 

There are just too many types of mortgage loans out there. At Indigo Mortgage, we like to make sure you make the most informed decisions possible while shopping.

That’s why today we are going to talk about three of the best loans out there. They are common, relatively easy to get, and all around have the best interests of the customer in mind. So, what are these three loan types and where do they come from? 

Assumable Mortgage

Typically, when you go to buy a home, you have to shop around for a mortgage and so on and so forth. The Assumable Mortgage process skips all that and allows you to take over the previous owner’s mortgage loan.

There are a few things to keep in mind with this type of mortgage. Sure, you only have to pay off what they have left and, while that can be a very good thing, you could also get locked into a bad interest rate among other things.

Also, the assumable mortgage requires that you get approval from mortgage lender. Mainly, as a buyer, you should only really be interested in this type of mortgage if the interest rates have risen as you will get to jump in on the lower rates that come with the Assumable Mortgage, which will save you money.

Balloon Mortgage

The Balloon Mortgage is appropriately named. In the beginning, you will have a much lower interest rate than others, but after about 10 years (the time can be shorter as it is decided in the agreement), you will find that the rates could very well spike.

So, like a balloon that rises until it pops and falls, your best bet with the Balloon Mortgage is to pay off the loan before the interest rate increases.

Conventional Mortgage

Finally, we have the conventional loan. This is one that is not insured by the government. However, as long as you work with a reputable company like Indigo Mortgage, you will be fine. 

When looking for a lender, it is important to never deal with Internet-based mortgage companies. Instead, it is important to partner with a lender that has a physical office where you can interact and get to know who you are doing business with when it comes to your Conventional Mortgage. 

Take Control of Your Mortgage Loan Shopping Experience

At Indigo Mortgage, we have talked more than once about recognizing less than reputable lending companies that like to use intimidation as well as other questionable methods when dealing with customers. 

We have also repeatedly spoken about the caution that should be taken when you are looking for a first or new mortgage lending company.

While warning you about the various methods some companies use to tack on hidden fees and other wallet-burning scams, we have always expressed that, when shopping around for a lender, the customer should take the tact of having complete control. 

When selecting a lender, do not be afraid to take control of a situation -- after all, in the end, it comes down to it being your choice.

Lender Shopping Tips

When shopping for a new lender, there are a few things to be cautious about. This is especially the case when dealing with a new company.

•  The first rule is to know your fees. Don’t listen to misleading ads promising lower rates or any other mumbo jumbo. Those sorts of things are blatantly false and here is why. It is impossible for a company to guarantee low interest rates without first conducting a check on the customer. This means that they would have needed to already know who you are and your credit score amongst other facts.
•  The second rule is to keep your eyes peeled for other fees. Should you wind up with an abnormally low interest rate, you probably aren’t just getting lucky. If It sounds too good to be true, it probably is. What typically happens in these situations is that the customer is charged a variety of hidden fees to offset the lower interest rate. Then, the customer will find themselves paying more than they would have in the first place. Sounds complicated -- well it really is not. Just remember to always ask about any fees or closing costs upfront as reputable companies will explain their procedures and will not try and go around your questions.
• The third rule is to research companies from the start. Know as much as you can before you even call to make an appointment and never deal with online only companies. In fact, it is best to deal locally as it is not only safer for you financially, but it is also a means of supporting your local economy.
• For more information, please feel free to contact our knowledgeable staff at Indigo Mortgage.

Staying Safe while Decorating this Holiday Season

Christmas is practically here and it’s pretty apparent all over with colorful lights on and around the roof and all the tree lots opening up this holiday. 

This year, when you are decorating for the family or perhaps some extra income, be sure to have a helping hand and to be extra careful. It’s always sad when accidents happen, but it somehow feels worst when bad things happen over the holidays.

Putting Up the Lights Safely

Let’s start with the Christmas lights. Sure enough, family comedies have joked about dad falling off the roof or hitting his thumb with the hammer when tacking up the lights. However, unlike in Hollywood, these little accidents are no joke and can and have ended pretty bad for some people.

So, next time you go on out to put up the Christmas lights, take a friend or a family member with you. Have them hold the base of the ladder to help keep it steady while you are up there securing the lights. 

If you actually tack them in or are setting them up for the first time, do be careful with the hammer. It doesn’t matter how steady the ladder is because if you fall off it when you hit your hand, you will also have the risk of hurting yourself further with the fall.

Other Tips for Decorating Safely

Believe it or not, it seems that there is always someone to find a new way to get hurt and it’s never a good thing. So, this holiday season, let Indigo cover the bases on Christmas decorating safety:

• When you go to bring in the Christmas tree, do not try to bring it in yourself. Those things are heavy and oddly shaped. Have a friend help you.
• When placing the tree, be careful to secure it well so that it doesn’t fall down later on top of someone as they place ornaments or pull a present out from under the tree.
• Some decorations are electronic, such as trains, indoor lights, a dancing Santa, and so forth. Please remember to unplug them at the end of every night to prevent a plug malfunction and possible fire.
•  If you have a fresh tree, make sure that you have plenty of water for it so that it does not dry out too quickly.

The holidays are a great time to bond with the family and spread cheer and joy. So, remember to do so safely with these tips. From everyone here at Indigo Mortgage, have a great – and safe – Christmas!  

Spot Problems with Home Inspections

When you buy a house, it doesn’t matter if it is a new track home from some big business developer or a home from the 1960s that may or may not be haunted. 

Home buying is one of the biggest decisions you will ever make, and somewhere down the line you might find yourself regretting it do to some astronomically priced repair that you wish you had known of before buying the home.

It’s for reasons like these that we always recommend a home inspector when buying a home. After all, you don’t want to go in blind and find out later that you just bought a ‘money pit.’ 

This blog post illustrates why it is important to get a home inspection.

The Importance of a Home Inspector

Sure, when you see that it’s going to cost you a couple hundred extra dollars out of pocket you might find yourself thinking, “No.” 

However, when you think about what a home inspector can save you from in the long run it is definitely a well spent few hundred bucks.

Here is why it might be a good idea to work with a home inspector:

• When you hire a home inspector, you are no longer blind. With their help, you will learn every dark secret about the home – from the foundation to the attic and everywhere in-between. You will learn the repairs that are needed and just how worthwhile your investment is not to mention it can give you a great number of reasons for backing out of the deal at the last minute should anything turns out to be too major.
• It’s a safety thing. For instance, a home inspector tests for carbon monoxide and other things that can potentially hurt you.
•  It can even help cover legal issues. A home inspector will be able to tell you if some sort of work was done to code or if it was even reported at all.
• You will get an idea of future costs for repairs that could be needed, such as how much longer the roof or plumbing may have left before it is time for replacement.
•  It puts negotiations on the table. If you discover this massive problem, you will suddenly hold a card or two and that brings up bargaining and getting the house at a cheaper price.

As you can see, that investment of a few hundred dollars is well worth it, considering how much time, money, and hassle it can save you in the long run, showing you upfront whether your dream home is still a dream or has suddenly become a nightmare!

Spot Problems with Home Inspections

When you buy a house, it doesn’t matter if it is a new track home from some big business developer or a home from the 1960s that may or may not be haunted. 

Home buying is one of the biggest decisions you will ever make, and somewhere down the line you might find yourself regretting it do to some astronomically priced repair that you wish you had known of before buying the home.

It’s for reasons like these that we always recommend a home inspector when buying a home. After all, you don’t want to go in blind and find out later that you just bought a ‘money pit.’ 

This blog post illustrates why it is important to get a home inspection.

The Importance of a Home Inspector

Sure, when you see that it’s going to cost you a couple hundred extra dollars out of pocket you might find yourself thinking, “No.” 

However, when you think about what a home inspector can save you from in the long run it is definitely a well spent few hundred bucks.

Here is why it might be a good idea to work with a home inspector:

• When you hire a home inspector, you are no longer blind. With their help, you will learn every dark secret about the home – from the foundation to the attic and everywhere in-between. You will learn the repairs that are needed and just how worthwhile your investment is not to mention it can give you a great number of reasons for backing out of the deal at the last minute should anything turns out to be too major.
• It’s a safety thing. For instance, a home inspector tests for carbon monoxide and other things that can potentially hurt you.
•  It can even help cover legal issues. A home inspector will be able to tell you if some sort of work was done to code or if it was even reported at all.
• You will get an idea of future costs for repairs that could be needed, such as how much longer the roof or plumbing may have left before it is time for replacement.
•  It puts negotiations on the table. If you discover this massive problem, you will suddenly hold a card or two and that brings up bargaining and getting the house at a cheaper price.

As you can see, that investment of a few hundred dollars is well worth it, considering how much time, money, and hassle it can save you in the long run, showing you upfront whether your dream home is still a dream or has suddenly become a nightmare!

Posted by Alison at 1:34 PM No comments:

The Benefits of an Escrow Account

As a homebuyer, unless you are very wealthy, it is a more than likely chance that you will be dealing with a lender to take out a mortgage to pay for homeownership over time – typically 15, 20, or 30 years. Essentially, after everything has been approved, you will be paying the lender back for covering the cost of your new home.

In addition to paying your mortgage loan, you are also required to have (and pay for) what is called hazard insurance and property taxes. Unlike other bills, these bills only come once or twice a year and, when they do, they are often large.

At closing, you are given two options for handling these bills (sometimes only one, depending on your financial situation). The first option is to open an escrow account that bills you monthly so that you have a substantial amount of funds to pay off the bills when they come. 

The other is to go it alone and save on your own and then pay off the bills when they come.

Indigo Mortgage suggests that escrow accounts are usually the best solution and this blog post explains the benefits of selecting an escrow account.

Ease of Use

It’s true really -- with an escrow account, the lender takes care of everything. All you have to do is keep up on the bills. Speaking of the bills, how does paying into an escrow account quite work? Say you have $12,000 a year in hazard insurance and property taxes. Every month, you will be billed $1,000 by your lender.

In actuality, the lender may require a bit more to ensure the account has padding in case the hazard insurance and property tax bills increase. 

During the year, the lender will send a payment to the hazard insurance company as well as well as to the property tax department of your city or state.

The benefit is that it is stress free for you because it is handled for you and all you do is pay a slightly higher mortgage bill each month to collect that necessary money for those payments.

The only downfall is that your mortgage lender gets to keep any interest earned on that money while it sits in the account because you are technically paying into their account.

Money Management

Another benefit of an escrow account is the fact that you will be able to do much better with your money management. It is easier to keep up with smaller payments than to save to make one large payment. 

After all, if you were saving up to do the one big sum, it really takes quite a bit of discipline to not spend the money you are saving in the first place.  

Help is Here!

At Indigo Mortgage, we must stress that handling hazard insurance and property taxes on your own may not be the best idea and is not actually allowed on a mortgage where there has been no down payment or a down payment of less than 20% is made at purchase. 

Our mortgage professionals are here to help you by explaining the escrow account process and why it will help you keep up with all your obligations and enhance your money management skills.

Posted by Alison at 1:26 PM 1 comment: