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VA & USDA Fee Changes

UPDATE 10/6/2011: We just received notification that VA has rescinded the recent change in the VA funding fee until November 17, 2011. The legislation has passed that changes the funding fee, but is still awaiting the President’s signature. The signing date of the legislation by the President will determine the fees effective on or after November 18th, 2011.

Since the beginning of the year, there’s has been a lot of talk about changes coming to VA (eligible US Military veterans) and USDA loans (eligible in most rural, and many suburban, areas of the Country; Wisconsin and California are, of course, included).

Both of which offer 100% financing to those that are eligible.

The eligibility requirements for each of these loans are a topic for another day, so please just contact me for a no-cost and no-obligation consultation to verify your eligibility for each program. The list above is not exhaustive of all eligibility requirements.

Here is a summary of the official changes coming, effective October 1, 2011.

It’s getting less expensive, in many cases, to obtain one of these loans!

USDA and VA Fee Changes for US, WI and CA Home Loans

The information above is deemed accurate at the time this was published, but cannot be guaranteed. If you have any questions, comments or concerns, please contact me. Furthermore, please also contact me for a no-cost, no-obligaton consulation if you would like to see if you are eligible for these programs, or any other programs that we offer; I would love to help you!

Are You Shopping for Different Lenders?

Here are 10 basic questions (and their suggested answers) you should be asking any lender you consider doing business with. Not only will it help you get to know your lender, it will help you know that you are dealing with a career-professional who has the expertise necessary to get you the loan that’s right for you and get it closed smoothly, without surprise.

Can you provide me with the contact information for at least three of your past purchase clients from the past two months? (You are the one doing the interviewing; be sure to do your homework! Many of my past clients have written recommendations for people like you, they can be seen here and my business references are here)

How long has your company been in business and how long have you been originating loans? (For Envoy, it’s over 15 years, for myself, over eight years, but really, three years or more would be considered acceptable)

Are you a mortgage banker or a mortgage broker? (Dependent upon the situation, mortgage brokers tend to have higher fees and higher rates than mortgage bankers because, mortgage brokers are intermediaries between you and your lender where mortgage bankers work for your lender; Envoy is a mortgage bank and I am a mortgage banker.)

Is your company licensed and are you personally licensed to originate mortgages? (Visit http://www.nmlsconsumeraccess.org/ to search for the company and the loan officer; Envoy is licensed in many states, I am licensed in Wisconsin and California.)

How long will it take to complete the loan process? (It should take 3-4 weeks in most cases; sometimes even faster. The average is about 3.5 weeks. If the candidate says it will take only days, or five weeks or more, this should raise a red flag.)

Are there any up-front fees to work with you such as application fees, appraisal fees, credit report fees, other fees? (Before paying any sort of up-front fee, it’s crucial that you are happy with the lender you have chosen, that you understand what you are paying for and that you know when you will be paying for it. Typically, as is the case with Envoy, the only fee you should pay is the appraisal fee, once you have made an application and signed-off on the loan disclosure documents. Also be sure to find out how or if the up-front fee is reimbursed to you should you decide to no longer work with the lender.)

How many loan products do you offer? (As always, the more the merrier! Envoy is a full service bank with full access to traditional FHA, VA, USDA and Conventional products. We also have access to hundreds of specialty jumbo programs and government programs like HomePath and DU Refi + programs.)

What will my total housing payment be – including items like principal, interest, real estate taxes, home insurance and, if applicable, mortgage insurance? (It’s important that your loan officer quote you the total cost of the home.  Many times, a loan officer will simply tell you a payment of $____ and that only includes the principal and interest.  In states like WI and CA where the real estate taxes are relatively high, it’s possible that your mortgage payment, as  quoted for only principal and interest, could be as much as one-third short of the actual cost of the home each month.)

When will I receive a Good Faith Estimate? (It’s required by RESPA – a Federal Law – that you get this estimate within three days of submitting a complete application. Furthermore, you must have this estimate prior to any up-front fee [there’s an exception for a nominal credit report fee] is charged to you.)

Will you stand by your Good Faith Estimate? (A law that took effect on January 1 of 2010 has made it much more difficult for a lender to use the GFE for a game of Bait and Switch – it was simple, and legal, to do that in the past – but there are still many ways an intentionally dishonest lender can make this form look a lot nice than the reality of the final numbers.  The easiest place for a lender to do this is in the pre-paid items so make sure your escrows, HOA fees, interest through the day of closing, etc, are all correct.)

Fore more information, please contact me using any of the methods shown here.