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Apache is functioning normally

April 27, 2023 by Brett Tams

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) joined four other federal financial regulatory agencies, along with state bank and state credit union regulators, in issuing a statement that the use of United States Dollar LIBOR (USD LIBOR) panels will end on June 30, 2023. The statement reiterates the agencies’ expectations that financial institutions with USD LIBOR exposure should complete their transition of remaining LIBOR contracts as soon as practicable. Accordingly, the CFPB is urging banks and nonbanks alike to continue their efforts to adequately prepare for the sunset of USD LIBOR.

The financial services industry uses USD LIBOR as a reference interest rate for many consumer financial products, including adjustable rate mortgage loans, reverse mortgages, home equity lines of credit, credit cards, and student loans. The approaching discontinuation of USD LIBOR in June 2023 presents numerous consumer protection, financial, litigation, and operational risks. For instance, if financial institutions do not issue required disclosures, consumers may not know when the transition from USD LIBOR will occur or how the interest rates they pay will be calculated.

Both banks and nonbanks use USD LIBOR in setting consumer credit interest rates. Nonbanks have increasingly become involved in the issuance of consumer credit. For instance, nonbank mortgage lenders originated nearly two-thirds of loans for home purchasers in 2021. The CFPB is committed to helping both banks and nonbanks transition affected consumers from USD LIBOR in a transparent and orderly manner.

In October 2019 and December 2021, the CFPB published blog posts discussing the transition away from USD LIBOR to help consumers understand this market-wide change. In June 2020, the CFPB released an updated Consumer Handbook on Adjustable-Rate Mortgages to help consumers better understand these products and how their payments can change over time.

On December 7, 2021, the CFPB finalized a rule revising Regulation Z (Truth in Lending Act) to facilitate the transition away from the USD LIBOR interest rate index for consumer loans. The rule establishes requirements for how creditors must select replacement indices for existing USD LIBOR-linked consumer loans after April 1, 2022. The CFPB is currently assessing any further steps it needs to take as a result of the subsequent Adjustable Interest Rate Act and the Federal Reserve Board’s implementing regulation identifying benchmark rates based on the Secured Overnight Financing Rate (SOFR) to replace USD LIBOR in certain consumer contracts.

Read the Interagency Statement.

Consumers can submit complaints about financial products and services, by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

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The Consumer Financial Protection Bureau (CFPB) is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.consumerfinance.gov.

Source: consumerfinance.gov

Apache is functioning normally

April 27, 2023 by Brett Tams

As we settle more and more into our house, all of the blank walls are starting to stare at me. I think I’m ready to commit to some art. But when you’re in your forever home (and most of your walls are 150 yr old plaster which means they don’t like holes), there’s a lot of pressure to make the right choices. And while I’d love to run out and invest in some original art, I do still have things like sofas and fireplaces to pay for so I’ve got to find a balance. That’s why I’m currently obsessed with Silke Bonde.

Silke Bonde is a Copenhagen-based artist who is using watercolors to create soft but strikingly modern prints. I am particularly smitten with her “Looking Closer” collection.

Inspired by leaves and elements of nature, Silke explains ” “Zooming in on the lines and patterns you will find in a leaf. Each leaf is a unique piece of art created by nature. The organic watercolor shapes combined with the straight lines gives a minimalistic and natural expression.”

Silke’s own home is a study of a perfect mix of minimalism. I love how she intermingles soft colors punctuated with hits of black. Just like her work, her home feels soothing, yet inviting, leaving you wanting to know more. I think a couple of her prints could look lovely in our media room. Or dining room. Or really anywhere! I’m definitely going to snatch a couple up.

For our archive of Designer Files, CLICK HERE.

photography via silke bonde

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Source: apartment34.com

Apache is functioning normally

April 27, 2023 by Brett Tams

Continue reading the main story

Let’s say you would like to move but you’re handcuffed to your house by a low mortgage rate. If you move now, you’ll have to pay a much higher interest rate on your next home loan.

Sound familiar? It’s a situation that millions of Americans find themselves in. This chart, which I made using data supplied by Nancy Vanden Houten, the lead U.S. economist at Oxford Economics, shows the opening of a huge gap since the end of 2021 between rates on new 30-year mortgages and old loans — the stock of outstanding mortgage debt.

reported on Tuesday. “The share of new homes in total home sales has risen to 13 percent from about 10 percent over the summer, and likely will rise a bit further in the months ahead,” Kieran Clancy, the senior U.S. economist at Pantheon Macroeconomics, wrote in a note to clients.

People who were lucky enough to take out a 30-year fixed-rate mortgage in December 2020 got an average rate under 2.7 percent, according to Freddie Mac, the mortgage securitizer. The national average is now around 6.4 percent. Given those changes, “unless you’re a person who needs to make a move, there’s little incentive” to move now, Vanden Houten told me.

Of course, some people still are putting their homes on the market, and Vanden Houten herself was recently one of them. She sold a house in Teaneck, N.J., to move to Tucson, Ariz. She had an adjustable-rate loan on her New Jersey home, so the rate shock from moving wasn’t as big as it might have been. In any case, she said, “I’ve always loved the desert. I didn’t move for purely financial reasons.”

Vanden Houten has company. Jessica Lautz, the deputy chief economist at the National Association of Realtors, told me that the inventory of existing homes for sale, while historically low, is nonetheless up about 5 percent from a year ago.

“A lot of people have earned a substantial amount of housing equity,” Lautz said. “Even if they have low interest rates on their current loans, they may be willing to make a trade because they’re paying all cash for the next property.”

Continue reading the main story

Source: nytimes.com

Apache is functioning normally

April 27, 2023 by Brett Tams

As I’ve made it rather clear over the years, I’m all about minimally styled interiors – less is more when you seek to curate a space that feels fresh and airy. But while sparse spaces photograph beautifully, monochromatic rooms can sometimes feel a bit stark in real life. I don’t know if it’s the fact that Valentine’s Day is tomorrow, or that all those pops of blush showing up on Pinterest have finally seared themselves into my brain – but either way – I have fallen in love with the peachy, dusty, blush pink in this nordic apartment.

Peach accents can break up a monochromatic scheme, adding warmth and playfulness to the space without detracting from an otherwise neutral interior. You might be surprised to learn that the rest of this apartment is essentially black and white. But just like I decided our house needed a room with bold color, this apartment shows you can maintain that modern chic feel, even with pink! You can take your apartment to the next level by incorporating a peach accent wall. Or if you want just dip your toe in this rosy water, start with some smaller statement pieces placed throughout your home. Any of the lovelies below will do!

SHOP THE LOOK: bowl / pendant light / poster / notebook / pillows / throw / chair

For more home tours, CLICK HERE

home tour courtesy of fantastic frank

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Source: apartment34.com

Apache is functioning normally

April 27, 2023 by Brett Tams

Factoring in the slowing economy, Fannie Mae said unemployment will likely rise to 4.4% by year-end and increase to 5.4% by the end of 2024. The group expects the headline and core consumer price indices close 2023 at around 3.3% and 3.9% annually. As such, Fannie Mae now anticipates the Federal Reserve to start easing … [Read more…]

Apache is functioning normally

April 27, 2023 by Brett Tams

Arizona-based lender On Q Financial will form a multi-partner mortgage banking joint venture with HomeCo Partners, a consortium of real estate brokerages and a builder, HousingWire has learned. HomeCo Partners had created a JV with New Rez, which is permanently winding down.

The JV, named Partners United Mortgage, has partners consisting of real estate brokerages and builders — including Dilbeck Real Estate in Pasadena, California; Lisa Burridge and Associates in Casper, Wyoming; Rockford Homes in Columbus, Ohio; Weichert ABG in Louisville, Kentucky; Weichert Space Place Huntsville, Alabama; Stark Real Estate in Madison Wisconsin; Weichert Advantage Plus in Knoxville, Tennessee; and Weichert Griffin in Fayetteville, Arkansas.

On Q Financial was originally looking to buy New Rez’s share of a joint venture created with HomeCo Partners, Pat Lamb, CEO of On Q Financial, said in an interview. After the deal fell through due to regulatory filings, HomeCo Partners suggested forming a new JV with On Q Financial.

“This JV actually, because it’s a consortium, allows real estate firms and home builders that don’t quite have enough size to go the full joint venture route to still get into the mortgage side of the business by becoming one of the partners in the JV,” Lamb said.

Unlike a traditional JV model, the consortium model doesn’t require real estate brokerages or builders to make a large upfront investment to start. It also gives the JV a geographical and business model dispersion.

“If one of our partner’s business slows down for a year, it doesn’t affect the seven other partners, and it doesn’t affect the overall performance of Partners United the same way it would if there was only one partner,” Bob Shield, president of Partners United Mortgage, explained.

On Q Financial is looking to benefit from servicing its referral partners throughout their lifecycle. The retail channel – which accounts for 85% of the lender’s entire business – is On Q Financial’s bread and butter, and the remaining 15% of production comes from the correspondent and wholesale channel, Lamb noted.

“We are constantly out building relationships with our referral partners, and doing it from initial introduction, where you’re doing a single transaction to try and to grow those relationships to become a preferred lender. Having the ability to do a consortium joint venture like this gives us the ability to grow with our clients,” Lamb said.

About 25 loan officers are expected to join the multi-partner JV with Partners United Mortgage, paying for On Q Financial’s backroom, HR and financial support.

“When the company makes money, they (the eight partners of HomeCo) split based on their percentage of ownership, not their contribution to the business. Maintaining strong compliance is important for On Q, and properly structuring ownership and distributions is critical from a Real Estate Settlement Procedures Act (RESPA) perspective,” Shield noted.

Most recently, On Q Financial brought on former employees from Celebrity Home Loans.

A deal to acquire eight production divisions of Celebrity fell apart due to a mass layoff at Celebrity in February. Afterward, On Q Financial brought over about 20% of what Celebrity was producing after several of Celebrity’s retail businesses transitioned to Luminate Home Loans in December and January, Lamb said.

On Q Financial, which originated $2 billion last year in 46 states, is in acquisitive mode, Lamb added.

“We’re actively looking and in the market to acquire other companies that are deciding that maybe it’s time to leave the business or consolidate,” he said.

Source: housingwire.com

Apache is functioning normally

April 27, 2023 by Brett Tams

Posted on: February 2, 2022

A VA loan is a mortgage loan that’s backed by the U.S. Department of Veterans Affairs. These loans are reserved for military service members, veterans, and their spouses. The VA home loan program is one of the lowest-cost, most valuable mortgage loan options currently available.

See if you’re eligible for a VA home loan. Start here. (Apr 26th, 2023)

Benefits of a VA loan

VA loans come with a number of significant benefits to home buyers, particularly when compared with other types of mortgage programs.

Just a few VA loan advantages include:

No down payment required: Most other loan programs require at least 3% down ($9,000 on a $300,000 house).
Competitively low interest rates: Rates on VA loans are some of the lowest you’ll find. This saves you both monthly and in the long run.
Closing costs are limited: You can’t be charged an origination fee of more than 1%, and sellers can contribute a large portion of your closing costs.
No prepayment penalty: This means you can pay off the loan or refinance quickly without an added fee.
No private mortgage insurance (PMI) is required: The majority of other loan products require mortgage insurance, which adds upfront and monthly fees.

VA loans are also assumable, which means if you eventually sell the house, the buyer can take over your loan, too — a huge perk, given the low rates and other benefits VA loans come with.

VA mortgage rates 2023

When compared to other loan types — conventional loans and FHA loans, for example — VA home loans offer consistently lower rates than loans for the average consumer.

	VA	Conventional	FHA
December 2021	2.99%	3.38%	3.39%
November 2021	2.95%	3.32%	3.32%
October 2021	2.88%	3.22%	3.22%
September 2021	2.85%	3.17%	3.20%
August 2021	2.88%	3.19%	3.23%
July 2021	2.94%	3.27%	3.27%

Source: Ellie Mae Origination Insight Report, June 2021

*These rates are only averages. Your VA loan rate could be higher or lower than average depending on factors like your credit score and down payment size. Check with a lender to find out what rate you qualify for.

Click here to request a VA home loan quote. (Apr 26th, 2023)

Types of VA loans

There are several types of VA loans to choose from. The right one depends on your goals as a borrower, as well as how you’ll be using the funds.

The four main types of VA loans include:

VA purchase loan: These are VA loans designed for purchasing a property. You can buy a single-family home, a multifamily home with up to four units, a manufactured or mobile home, an approved condo unit, or a new construction home.
VA Streamline Refinance: The VA’s Streamline Refinance — also known as a VA Interest Rate Reduction Refinance Loan (IRRRL) — is for existing homeowners looking to refinance their mortgage and reduce their interest rate.
VA cash-out refinance: With a VA cash-out refinance, you take cash out of your home. It replaces your existing mortgage with a newer, larger one, giving you the difference in cash.
VA energy efficient mortgage: Also called EEMs, these are VA loans that can help you finance energy improvements on your home.

The VA also offers NADL loans, which are mortgages reserved strictly for Native American veterans buying on federal land.

VA loan eligibility requirements

VA loans are only for qualified veterans, active-duty service members, and, in many cases, their surviving spouses. To qualify, you’ll need to meet specific service requirements.

These service requirements vary slightly based on when you served, but generally speaking, you will need to have at least one of the following:

90 consecutive days of active service during wartime
181 days of active service during peacetime
6 years of service in the National Guard or Reserves
A veteran/service member spouse who died in the line of duty or due to a service-related disability or injury

To prove you have the above service record, you’ll need to submit a Certificate of Eligibility (COE) to your lender. This is a document that details your service record, the nature of your release from the military, and your VA loan entitlement.

You can get your COE through the VA eBenefits portal online. Or, when you apply for a VA loan, the lender can request a COE on your behalf. This usually takes only a few minutes.

Qualifying for a VA loan

Beyond service eligibility requirements, the VA doesn’t set specific financial standards for these mortgages. The individual private lenders that issue VA loans, however, often do. While these vary from one lender to the next, you can typically expect to need a 620 credit score and a 41% debt-to-income ratio or lower.

The good news is, there’s no down payment required for a VA loan. So eligible borrowers can qualify for a VA home loan with very little cash upfront.

VA property requirements

The VA home loan program is designed to help military service members and their families purchase a primary residence, which means you cannot use your VA home loan benefits to purchase a second home, vacation home, or investment property.

Additionally, the home must meet certain standards set by the VA to ensure the home is safe and livable.

How does a VA loan work?

The VA loan process is fairly similar to that of other mortgage programs, just with a few added steps along the way.

Are you considering a VA loan for your home purchase or refinance? Just follow these steps:

#1. Verify eligibility and request your Certificate of Eligibility (COE)

The first step is to make sure you meet the VA’s service requirements (you can see the full list here). If you do, you’ll need to request your Certificate of Eligibility, which proves you’re eligible for the program. You can get your COE in your eBenefits portal, request it by mail, or ask your lender to pull it on your behalf.

#2. Get prequalified

The next step is to get prequalified for your loan. To do this, you’ll give a lender some basic information about your finances. They’ll then determine if you’re a good candidate for a VA loan and how much home you can likely afford.

#3. Get pre-approved

Next, you’ll apply for a full pre-approval. This requires filling out an application and submitting to a credit check, both of which your lender will consider in detail. Once they’ve analyzed it all, you’ll get a pre-approval letter stating how much you can borrow and at what interest rate. You can use this to guide your home search.

#4. Put in an offer

After you’re pre-approved, you can start shopping for a house. When you’ve found that perfect property, submit an offer, and include your pre-approval letter. If the seller accepts, it’s time to move through the rest of the VA loan process.

#5. Go through the VA appraisal and underwriting

You’ll need to fill out your lender’s full loan application next, and your lender will order an appraisal of the property you intend to buy. They’ll also begin underwriting your loan, which essentially means verifying all your information to ensure you can meet the obligations and pay your mortgage.

#6. Close on your new home

When your loan is fully underwritten, you’ll be scheduled for a closing appointment, which is when you’ll pay your closing costs, sign your paperwork, and get your keys.

What is the VA funding fee?

The VA funding fee is a one-time fee you’ll pay at closing. It varies from 0.5% to 3.6% of your loan amount and is used to help sustain the VA mortgage program.

The amount of the VA funding fee you’ll pay depends on the nature of your military service, the size of your down payment, the type of loan you want and the number of times you’ve previously used your VA home loan benefit.

First-time use purchase VA funding fee

Down Payment	Veteran/Active Duty	Reservist/National Guard
Less than 5%	2.3%	2.3%
5% to 9.99%	1.65%	1.65%
10% or more	1.4%	1.4%

How does VA loan assumption work?

With a VA loan assumption, the VA loan transfers with the house. The buyer assumes the seller’s VA loan, including its same rate, terms, and balance, and resumes making payments as initially planned through the original loan. Though the buyer doesn’t need to be a veteran or military member to assume a VA loan, they do need to meet all the financial requirements of the loan program (and the lender) to be eligible.

Ready to get started? Request a VA home loan quote here. (Apr 26th, 2023)

VA Home Loan FAQ

What is a VA loan?

A VA loan is a mortgage backed by the Department of Veterans Affairs. Only active duty military members, veterans, and their spouses are eligible.

What are the benefits of a VA home loan?

There are many benefits to a VA loan. They require no down payment, have low interest rates, and do not require mortgage insurance. They also come with limited closing costs and are assumable.

How does a VA loan work?

VA loans are guaranteed by the Department of Veterans Affairs, meaning it will pay back the lender if a borrower defaults on the loan. This reduces the risk that lenders take on and allows them to offer loans with no down payments, no mortgage insurance, and lower credit score minimums.

What’s the difference between a VA loan and a regular loan?

VA loans are only for military members and veterans, so that’s the biggest difference. They also require no down payment, which is rare when it comes to mortgage loans. Most other loan programs require 3% to 3.5% down payments minimum.

What is the interest rate on a VA home loan?

Your interest rate will vary depending on your credit score, debt-to-income ratio, loan amount, down payment, and other details. Generally speaking, VA loan rates are lower or comparable to rates on other loan programs.

What credit score is needed for a VA home loan?

The VA doesn’t have a set credit score minimum for its loans, though individual lenders often do. This is typically between 620 and 640, depending on your mortgage company.

What is the minimum income for a VA loan?

There is no minimum income to be eligible for a VA loan. Your lender will, however, consider your debt-to-income ratio to be sure you can comfortably make your monthly payments.

What are VA loan limits?

There are no limits on VA loans. You can borrow as much as you can financially qualify for, given your credit history, debt-to-income ratio, and other financial details.

What is the VA funding fee?

The VA funding fee is a one-time fee all VA borrowers pay at closing. It goes toward supporting and sustaining the VA loan program. Funding fees vary between 0.5% and 3.6% of the loan amount depending on your down payment size, type of loan, and the number of times you’ve used your VA loan benefit.

What is needed for a VA home loan?

For a VA loan, you (or your spouse) will need to meet the military service requirements set out by the Department of Veterans Affairs. You will also need to submit a Certificate of Eligibility, as well as various forms of financial documentation, including tax returns, W-2s, and more.

What is needed to get a VA home loan?

To get a VA loan, you’ll need to work with a VA-approved mortgage lender, submit your COE, and meet the remaining eligibility and documentation requirements of your lender.

How does a VA assumable loan work?

VA loans are assumable, meaning when a VA-financed home is sold, the buyer may be able to assume the VA loan attached to it, too. The buyer does not need to be a military member for this to happen, though they will need to meet other financial requirements set out by the VA and the lender.

What are the pros and cons of a VA loan?

The pros of a VA loan are many. There’s no down payment or mortgage insurance, and rates are competitively low. On the downside, they come with strict appraisals and can sometimes take a bit longer to process than loans through other programs.

Is a VA loan really worth it?

If you can qualify, VA loans are most often worth it. With zero down payment and no mortgage insurance requirement, they can make buying a house much more affordable than an FHA or conventional mortgage. They also have no hard-and-fast credit score minimum.

Do you pay back a VA loan?

You repay a VA loan just as you would any other type of mortgage or loan product. VA loans come with either a 15- or 30-year loan term, which means your monthly mortgage payments are spread out over either 15 years or 30.

If I’ve previously used a VA loan, can I use it again?

Your VA loan benefit never expires. After you pay off your existing VA loan, you can continue to use the VA loan again and again. In some cases, you may be able to have two VA loans simultaneously.

Are VA loans a good deal?

When compared to other mortgage loans, VA loans are absolutely a good deal. Thanks to the VA guarantee, your mortgage lender can afford to pass significant benefits along to borrowers. VA home loans have fewer upfront costs, low interest rates, and no mortgage insurance, making them one of the best mortgage loan products on the market.

See if you’re eligible for a VA home loan. Start here. (Apr 26th, 2023)

Source: militaryvaloan.com

Apache is functioning normally

April 27, 2023 by Brett Tams

Posted on: April 28, 2022

One of the biggest hurdles VA home buyers must clear is the VA appraisal. VA appraisals are much like regular appraisals — an approved appraiser will come out to the house you’re looking to buy and establish its value.

The main difference is the VA has stricter guidelines when it comes to houses. The Department of Veterans Affairs is a government agency that guarantees VA home loans, so they want to make sure the house meets its standards.

Check today’s VA rates (Apr 26th, 2023)

VA appraisal process

The VA appraisal process is very similar to any other home appraisal. Your VA lender will order an evaluation with a VA-approved appraiser as a part of the loan process.

The VA appraiser’s job is to establish a “fair market value” for the property and ensure the home meets the VA’s Minimum Property Requirements. If the requirements aren’t met, then a property may not qualify for a VA loan.

What if the VA appraisal comes in too low?

Unfortunately, VA appraisals can work against the home sale. If a VA appraisal comes in low compared to the loan amount, problems can occur.

For example, a home on the market for $275,000 can get a VA offer with all $275,000 financed. But if the VA appraisal report says the home is only worth $265,000, then suddenly the VA will only finance up to $265,000. This means the VA home buyer needs to make up the $10,000 difference between the purchase price and the appraisal value.

But even if your VA appraisal comes in low, you have options.

Getting a reconsideration of value

If a VA appraisal comes in low, a reconsideration of value (ROV) could be the best option.

An ROV is when the VA reevaluates how much the home is actually worth. Depending on how it goes, it could completely change the VA appraisal.

One way to get an ROV is to find better comps. “Comps” is short for “comparable homes” or “comparable sales”: similar homes to the one you’re trying to buy. If you can find comps closer to your expected price range, the VA may reevaluate their decision. For example, a similar home with no view may be valued the same as the home you’re buying. But that view has a market value, and you can make the argument the home should be valued higher.

There’s also always the chance the appraiser made an error in valuation, or they missed something when appraising the house. If this is the case, then a new appraisal could shift the value of the property in the borrower’s favor.

While they help some VA buyers, ROVs don’t always work out. If the appraised value is still too low, there are other ways to avoid paying huge costs to make up the difference.

Ask the seller to lower the sales price

One of the most common ways VA home buyers get around a low appraisal is by getting the seller to lower the sales price. Some homes are overvalued, and a low VA appraisal should be a wake-up call to the current homeowner that their home might not be worth what they think. They could then lower the asking price to the same value as the appraisal, clearing the way for the VA loan to go through.

Cover the ‘appraisal gap’ in cash

Another possibility is that you, the home buyer, cover the additional costs that exceed the mortgage loan. There’s a good chance you’ll have to cover the costs from out of pocket, meaning cash, if the downpayment is too low or if no downpayment is being paid at all.

Split the gap between buyer and seller

Then there’s the compromise between buyer and seller to split the additional costs equally. So, in our scenario where an additional $10,000 is owed, the seller would reduce the purchase price by $5,000 and the buyer would make up the additional $5,000.

Negotiate the extras

Along with these options, there are other ways to reduce the cost of the home. It’s common for home sellers to include appliances and/or furniture with the sale, including the costs in the total price. Unfortunately, VA appraisers won’t include this – their job is to evaluate the value of the home without including anything in it. Choosing to let the buyer keep the appliances can lower the total cost of the loan without changing the value of the house.

If all else fails, walk away

If there’s no way around the low VA appraisal, then you should always be prepared to walk away from the deal. VA appraisers are professionals, and they have to be certified by the VA to evaluate homes. If sellers are unwilling to budge or your Realtor cannot work out a new deal, it could be in the buyer’s best interest to find a different house. It’s not the happiest of endings, but it could be worth avoiding large, out-of-pocket payments just to get the specific home.

Common VA appraisal problems & what to do

A VA appraisal is a critical part of the homebuyer process for veterans. The hope is that you encounter no issues and sail smoothly to closing. But some VA buyers will face appraisal problems.

Here’s what to do if you run into VA appraisal problems:

Repairs ordered

The Department of Veterans Affairs requires that all properties meet a list of ‘Minimum Property Requirements.” This list aims to make sure that veterans are moving into homes that are safe, sound and free of any living hazards.

Unfortunately, some homes will not meet these basic criteria. With that, the VA appraiser may order repairs before closing can occur.

If the appraisal comes back with ordered repairs, it is important to be open with the seller. Ask your real estate agent to share the list of required repairs. Let them know that you are unable to move forward with the home purchase unless these repairs are completed, due to the restrictions of the VA loan. In some cases, the seller will comply easily with the repairs or negotiate a new price that factors in the repairs for a smooth closing.

If the seller is unwilling to complete the repairs, then a VA homebuyer will not be able to move forward with the purchase.

Low appraisal value

The fast pace of the current market means some homes may be appraised low. If you receive a low appraisal, you can ask for a Reconsideration of Value from the VA.

If the reconsideration doesn’t affect the appraisal value, negotiating with the seller for a better price is an option. But in a hot market, most sellers will be unwilling to leave any money on the table.

If this happens, you have the option to make up the difference in cash. However, that may amount to more money than you have available. You may have to walk away from the sale if you’ve exhausted all of your options.

How to avoid VA home appraisal issues

VA appraisals aren’t as complicated as they may seem. There are early signs homebuyers can find to tell if a home will clear an appraisal or not. Here are some tips to find out more about how to avoid VA appraisal issues during the home buying process.

The VA appraisal process doesn’t need to be intimidating so don’t let it deter you from taking advantage of one of the best mortgage products on the market.

VA appraisal FAQ

Are VA appraisals typically low?

No, VA appraisals are not typically low. If you are looking at a VA mortgage, you may have heard the myth that VA appraisals are typically low. The good news is that is not the case. When an appraiser shows up to determine the value of a home, they aren’t looking at the type of loan you want to use. Instead, they are looking at the home’s features to determine its value.

How often do VA appraisals come in low?

Like any other type of appraisal, VA appraisals can come in lower than you expected. The unfortunate reality is that some homes are overpriced by the seller.

According to Fannie Mae, appraisals come in low around 8% of the time. With that, borrowers seeking a VA loan may find their appraisal comes in low. But borrowers with other types of loans are in the same boat.

How do I fight a low appraisal?

If a VA appraisal comes in low, you have the chance to appeal. Whether you are the buyer or seller, you can request a formal Reconsideration of Value.

With this, you may present facts about the property that the original appraisal may have overlooked. A few important facts could be recent sales of comparable homes in the area, errors on square footage, omitted upgrades, and more.

To challenge an appraisal, you can present these facts to the mortgage lender in writing. At that point, the original appraiser will consider the information. They may or may not adjust the appraisal amount. If the appraised value isn’t raised, you can ask for a letter detailing their reasoning.

If you are seeking a valuation change of more than 10%, the lender will send the request to the Department of Veterans Affairs. In that case, a member of the agency will review the original appraisal and submitted facts to issue a revised value.

What happens if the appraisal comes back low for the buyer?

If the appraisal comes back low, the lender will not lend more than the appraised amount. With that, the buyer will have the opportunity to make up the difference. The buyer can negotiate with the seller for a lower price or pay the difference out of pocket.

Does the borrower have to complete the sale if the appraisal comes in low?

If a home’s appraisal is lower than expected, the buyer may be able to walk away from the sale if there is a contingency clause in place. The contingency would allow buyers to not complete the sale without losing their earnest money.

With this in mind, a buyer should never waive their appraisal contingency unless they are willing to make up the difference out of pocket or lose their earnest money.

Is a second VA appraisal possible?

If a VA appraisal comes back with a significant error, you can challenge the report. In some cases, you can present facts about the property that the original appraisal may have overlooked. For example, the appraiser may have missed the fact that you are on city water or have miscalculated the square footage of your home.

With this document submitted, the appraiser may reevaluate their determination and adjust the property’s value. If not, you can appeal to the Department of Veterans if you are trying to adjust the property’s value by more than 10%. At that point, a VA employee will look at the documents to reissue a valuation.

If you are pursuing a VA Streamline Refinance, an appraisal isn’t required by the VA. However, your lender will likely require an appraisal to finalize the loan.

Check today’s VA rates (Apr 26th, 2023)

Source: militaryvaloan.com

Apache is functioning normally

April 27, 2023 by Brett Tams

A spendthrift trust is a trust that limits the beneficiary’s access to the trust assets according to specific terms the grantor sets. Spendthrift trusts help ensure that beneficiaries can’t squander their inheritance; they also protect trust assets from creditors.

Rather than allowing the beneficiary to receive a lump sum, the trustee releases the money incrementally

. For that reason, a spendthrift trust can be especially useful if your beneficiary is:

Not mature enough to make wise spending choices.
Impulsive with money.
In heavy debt, or at risk of going into heavy debt.
Easily fooled or defrauded.
Suffering an active addiction that might cause excessive spending.
A child with functional needs and is eligible for SSI or Medicaid

.
Involved in or at risk of getting a divorce (courts may not consider trust assets as marital property when dividing assets)

.
Employed in an industry where lawsuits are common (creditors typically can’t seize trust assets to pay settlements).

How does a spendthrift trust work?

A spendthrift trust is a separate legal entity with three major elements:

A grantor: Also known as a “settlor,” the grantor is the person who creates the trust and transfers their assets into it.
A beneficiary: This is the person who receives benefits from the trust.
A trustee: This is the person who manages the trust assets in accordance with the terms of the trust. You may be able to appoint yourself as trustee, but if you do so, you’ll need to also appoint a successor trustee who can take over after you die or become incapacitated.

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Key characteristics

Special wording

What distinguishes a spendthrift trust from other types of trusts is that it contains a spendthrift clause (also known as a spendthrift provision). This spendthrift clause designates the trust itself as the only owner of trust assets, rather than automatically transferring ownership to your beneficiary when you die. The terms of the trust explain exactly how and when the trustee will release the funds to your beneficiary over time according to a schedule you create.

Creative timing

You can limit the beneficiary’s access to funds. The trustee can transfer fixed amounts on fixed dates, for instance, or you can allow the beneficiary to draw up to a certain amount of money from the trust at certain times. You can even design exceptions for emergencies.

Potential creditor protection

Although assets in a spendthrift trust are often safe from creditors, there are a few exceptions to be aware of, and you should check your state’s rules before proceeding:

Child support obligations.
Creditors with an enforceable court judgment against the beneficiary.
Trust income that’s higher than the beneficiary needs for support.

Alternatives

One alternative to a spendthrift trust is a spendthrift living trust (an inter vivos trust), which disburses funds in increments while you’re still alive. You can act as trustee and make the scheduled disbursements yourself. However, you must name a successor trustee who can take on this responsibility after you die.

Spendthrift trust examples

Here are a few examples that show a spendthrift trust in action.

Miriam is 95 years old and wants to leave her entire estate, worth $450,000, to her beloved great-nephew, Kyle. Although Kyle is mature and responsible, Miriam doesn’t want to give him access to his inheritance all at once. Kyle is still carrying massive medical debt from a major emergency surgery that he’s fighting with his health insurance company to cover. With it unlikely that the insurance company will ever pay out, and creditors constantly hounding Kyle, Miriam decides to create a spendthrift trust that gives Kyle a monthly allowance of $3,000. This will give Kyle enough to make his life more comfortable as he recuperates, but it will also protect the bulk of the estate from creditors, because whatever remains in the trust is considered a trust asset and not Kyle’s personal property to garnish.
Edward wants to leave his granddaughter, Amanda, $50,000 when he dies. Although Amanda is a sweet and loving granddaughter, she’s only in her early twenties and has a notorious history of reckless spending. To prevent Amanda from squandering her inheritance, Edward decides to create a spendthrift trust that allows Amanda to draw up to $1,000 monthly from the account. This lets her treat herself to some luxuries without immediately spending her whole inheritance.

Are spendthrift trusts revocable or irrevocable?

Spendthrift trusts can be revocable (meaning they can be modified at a later date if desired) or irrevocable (meaning they cannot ever be changed).

Revocable spendthrift trusts have the advantage of flexibility, so that you can adjust the terms if your beneficiary matures or their situation changes.
Irrevocable spendthrift trusts have the advantage of potentially reducing estate taxes.

Spendthrift trust pros

Spendthrift trusts bring a number of advantages:

May protect the beneficiary’s trust assets from most creditors and lawsuits.
Gives the beneficiary a reliable stream of income while preventing irresponsible spending of the assets.
Grantor can retain control over the assets.
Spendthrift trust assets are often excluded from the overall estate for tax purposes.
Not subject to probate if established while you’re alive.

Spendthrift trust cons

There are a few disadvantages to spendthrift trusts:

They can be costly to set up and maintain.
If your trust is irrevocable, you won’t be able to modify it if circumstances change.

How to set up a spendthrift trust

You can set up a spendthrift trust yourself by using an online estate planning platform that can guide you step by step. However, you may prefer working directly with an estate planning attorney because even minor errors could compromise or invalidate your trust. Also, states have different rules about when spendthrift trusts are allowed; which creditors can go after assets in spendthrift trusts; and what can happen to the disbursements.

Consider a few important questions that can help ensure your trust will operate according to your needs and wishes:

Who will act as trustee? If you’ve chosen yourself as trustee, who will be your successor trustee if you’re no longer able to fill that role?
Do you want your trust to be revocable or irrevocable?
How often should the beneficiary receive payments, and in what amount?
Do you want the payments to be a percentage of the trust principle or a percentage of trust income?
Should payments occur on a strict schedule or leave room for some flexibility?
For how many years should payments continue? Do you want payments spread over the expected lifetime of the beneficiary or over a limited number of years?

Source: nerdwallet.com

Apache is functioning normally

April 27, 2023 by Brett Tams

Love. Terror. Giddiness. Teeth-gnashing desperation. Buying your first home involves all these emotions, and more. And like so many other milestones in life, you won’t fully understand it until you go through the process yourself.

In an effort to clue you into some of the challenges you’ll face as a first-time home buyer, we asked some folks who’ve already gone through the wringer to spill what they wish they’d known earlier that would have saved them a ton of time, effort, and tears. Here’s to hoping their 20/20 hindsight will help pave your own path to homeownership.

First-time homebuyers: even if a home looks ‘perfect,’ it has problems

First-time home buyer Hunt Ethridge fell hard for a recently renovated house in Jersey City, NJ, which looked like it was in absolutely perfect condition. What could go wrong?

The home inspection, that’s what.

“My home inspector found a laundry list of issues,” Ethridge says. “He pointed out that the hardwood floor had been lacquered without sweeping, so dirt was sealed into it. Kitchen appliances were broken. Some windows were missing caulking. Worst of all was an old underground oil tank.”

After recovering from his shock, Ethridge used this info to renegotiate a lower price with the home sellers. He is grateful he didn’t pass on the home inspection and urges all home buyers to never skip this step.

“The last thing you want to discover after you buy is a major problem that could have been identified early on,” he says.

The takeaway: No matter how nice a home looks, a home inspection is the only way to make sure you aren’t buying a lemon, says Jane Peters, broker and owner of Home Jane Realty in Los Angeles. “You don’t have to ask the home seller to make repairs,” she adds, “but you do need to know whether you should proceed with the purchase or not.”

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First-time homebuyers: step away from the computer

Jonathan Cooper and his wife had a baby on the way, so they were ready and raring to buy their first home in Royersford, PA. They spent hours scrolling through real estate listings and Googling questions such as “how much home can I afford?”

This was all well and good, but at some point, a mortgage broker gave him some sage advice: “Stop Googling, move away from the computer and into the real world.”

Sure, online surfing and research serve a purpose, but if you’re serious about buying a home, “it’s not until you get pre-approved for a mortgage that the home-buying process gets real,” Cooper points out.

The takeaway: “You can’t get pre-approved by plugging in simple numbers on a mortgage calculator,” Peters says. “You need an experienced lender who will take a detailed history and require documentation of your assets and income. This is the only way you’ll establish if you qualify for a mortgage and for how much.”

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First-time homebuyers: Never miss a deadline

When Steven Mingilton and his brother found the perfect condo in Denver and their offer was accepted, they wanted to celebrate. However, their lender informed them that the closing process would take about two months. “And within those 60 days, we had a hefty to-do list,” Mingilton says.

Mingilton and his brother struggled to keep up with the copious paperwork and nearly missed an essential appointment to complete their loan.

“We had to beg and plead our case,” Mingilton remembers. “Thankfully, we were able to hustle and finalize.”

The takeaway: “Buying a home requires you to stay on top of your to-do items, especially during the escrow process where there may be penalties for missing a deadline,” says Peters. “Prime among this is the three-day requirement to send in your deposit. Miss that and you may miss out on the deal.”

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First-time homebuyers: choose a lender you like

Newbie home buyer Aaron Norris loved the real estate agent who helped him find his Riverside, CA, residence, but his lender was a “total jerk.”

“I couldn’t believe how disengaged and unprofessional he was,” Norris recalls. “He wouldn’t return emails or phone calls in a timely manner. He dragged his feet on a transaction that required speed, and he simply did not communicate.”

Although everything worked out OK in the end, he regrets not shopping for a lender he liked: “I felt like I was working for him and that he was not on my team.”

The takeaway: “A lender can make or break a deal, so choose wisely,” says Peters. “One of the main things to look for besides the loan rate is the responsiveness of the lender. They need to move fast or the deal may fail.”

Here are some questions to ask mortgage lenders to help you decide which one is right for you.

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First-time homebuyers: summon reserves of patience

While hunting for their first home in Omaha, NB, Jordan Bath and her partner put in several offers on different properties—all of which fell through.

“At the time, it was a major disappointment,” she recalls. Their real estate agent kept advising them to be patient. Sure enough, after a year of losing out on properties, the perfect home fell into their laps.

“Our agent overheard a contractor mention he was doing work on a house in our dream neighborhood,” Bath recalls. “She asked him for the address and seller’s information, and we were able to purchase the house without it ever hitting the market.”

Now, Bath says, they can look back at those frustrating “misses” and realize “they weren’t meant to be.”

The takeaway: It’s tough not to get disheartened while house hunting, says Peters. “Competition is fierce, and you need to prepare yourself for the long haul.”

You may need to adjust your criteria so more possibilities are opened up. In the meantime, “keep making those offers,” Peters says. “One of them will get accepted.”

Source: realtor.com