I have been working with a service connected, disabled Veteran, since he is a first time home buyer and requested that I assist him through the buying process. I have found that there is still a great deal of misinformation from both lenders and real estate agents about the V.A. Home Mortgage Loan Program. As a result, I will be writing about my experiences, so this reflects one post within a series. Stay tuned!
Are you thinking of buying using your V.A. home loan benefit? Good for you! Do you have 100% service connected disability/ities? If so, you will receive a waiver of the V.A. funding fee, along with the standard benefits, such as no required down payment.
After securing proper financing, home ownership represents a significant source of personal wealth in the United States. Home ownership and net equity are together about one – third (1/3) of net worth of American households. Recognition of the U.S. government of this fact is represented in the provision of significant subsidies to home owners. Except for the uncertainty the 2007 housing meltdown created and the ease in which hard earned financial stability and overall family financial legacy could be lost, it is still a safe bet that home ownership is a good, long term investment. Overall, home related subsidies in 2009 reached a whopping $137.6 Billion in 2009! Of that total, mortgage interest tax deduction represented the majority. Clearly, if you are renting, you are missing an important source of help when building your family’s overall financial stability.
It should be comfort to any Veteran set to embark on utilizing his or her V.A. home loan benefit that the Denver regional office of the V.A. has been a great source of valuable information. Everyone I talked to has been quite helpful. While I personally asked for a reference of any information I received, so I could research it myself at a later time, I would suggest relying on the information received from your regional office first over what your real estate agent or even lender may say.
What kind of house should you buy? It is estimated that around 10% of Americans currently live in manufactured housing in 2015 (a value created from estimation of Americans who live in manufactured housing versus the total estimated U.S. population in 2015 ). Since, manufactured houses represent a path toward affordable home ownership and typically cost less than conventional, stick built homes, an upward trend is expected in the number of families who will own a manufactured home. The main factor for the lower pricing is attributable to the controlled, factory based assembly process of manufactured houses. It produces significantly less waste and reduces time spent on the assembly process.
Unfortunately, lenders can still tack on as much as a full percentage point to your overall interest rate. It reflects a penalty in fact for purchasing a manufactured home and the practice is based on old stigmas. This is despite the evidence that manufactured homes can be more energy efficient and better built than conventional ones! For example, an Energy Star qualified model can cut your average energy costs as much as 30%!
After I assisted in cleaning up the Veteran’s credit history by contacting the credit bureaus, closing delinquent accounts that were outside of the state’s Statute of Limitations (he had never filed for bankruptcy) and by definition eligible to be closed, his FICO credit score went from 550 to almost 700 in about a 45 day period!
If affordability and predictability of your monthly mortgage payment are factors high on your list of criteria, prepare to make a purchase now by cleaning up your credit history and then select the kind of house that maximizes your present buying power. It is always preferred that any purchase includes the property to maximize the long term investment represented in your place of residence and “new” or new to you manufactured home!