Here is where the Veteran Home loan program excels over competing loan products. VA mortgages allow for a home to be financed in one loan up to 100% of the acquired home’s value. In addition, the seller is allowed to pay most-if not all-of the closing costs and prepaid items. This means little to no cash out of pocket. Most housing types are eligible: residential homes, condominiums, townhouses, manufactured homes, new construction and even 1-4 unit rentals (additional conditions apply). If lack of available funds is the issue preventing home ownership, VA Loans offer the solution.

Still, very few veterans take advantage this type of mortgage. It is a shame that more veterans don’t familiarize themselves with this benefit. The interest rate is the same or lower than most conventional financing. The mortgage products offered range from 10-30 year fixed rate mortgages, ARM’s (adjustable rate mortgages), and even temporary buy-downs are allowed. The eligible loan amount is the same as a conforming conventional loan-currently at 417K. In addition, VA financing can be used for refinancing existing homes. As you can see, the product isn’t the problem. The product is as competitive as most that is available. The lack of awareness is the problem. Ask your mortgage broker or lender to explain your options. If they don’t offer the VA mortgage, then find someone who does. We at Venture Development offer VA loans. In the end, you may end up with a conventional or FHA loan if these products are better suited for your situation. Until you compare mortgage options you won’t know what is right for you.

Another advantage of a Veteran mortgage is the flexibility found within the underwriting process. Employment history is very flexible. Credit for all types of mortgages is more stringent today than in the past. That being said, the focus is going to be on the last 12 months of payment history. Underwriting can use alternative sources of credit such as utility bills and cancelled checks if the credit depth is weak. A prior BK or foreclosure is also forgivable. Depending on the type of bankruptcy, you would be eligible one to two years following your discharge date if you’ve reestablished positive credit.

Who is eligible to obtain this loan? Many veterans and even some of their spouses can obtain a veteran mortgage. Here is a very short list of who is eligible: Veterans who served during WWII, Korean Conflict, Vietnam War, or Persian Gulf Conflict AND who have served 90 days of active duty, or have been honorably discharged, or were National Guard/Reservists activated. Veterans with service during Peacetime periods and active duty military personnel must have had more than 181 days of consecutive active service before becoming eligible. Reservists and National Guardsmen are eligible after 6 years of enrollment in a selected service. There is even a program for non active duty spouses. Consider this: an un-married spouse of a veteran who died while in service or from a service connected disability or a spouse of a service person who is considered MIA/POW for at least 90 days are also eligible.

Veterans have spent a part of their live defending our way of life. Freedom isn’t free. Why shouldn’t they be allowed to participate in the very same American Dream that they selflessly protected for you and me. The VA loan was created to help those that have helped all of us. Collectively we can spread the word about the benefits of this unique type of loan.

Minnesota Mortgage Broker-Venture Development 952-285-4319 MN mortgage broker at my website at ventureloanapp.com John Mazzara sells Minnesota real estate in the Twin Cities(Minneapolis/St Paul), MN with RE/MAX 952-887-1290 MN real estate at my website at selling.mn We offer mortgage loans programs for First time buyers, investment property, refinancing & consolidation of debt

Types of mortgage loans

There are several types of mortgage loans, each suitable for specific situations. The most common types are fixed rate, adjustable rate, and balloon loans.

Fixed rate mortgage loans

In a fixed rate loan, the interest rate stays the same throughout the term of the loan. Consequently, the monthly payment does not change, regardless of the prevailing market rates. This offers more stability for the mortgagor, but at the price of higher interest rates.

Fixed rate mortgage loans usually last 15 or more years. When the mortgagee grants a long term loan, they take on the risk of rising interest rates. This means that if the prime interest rate goes up, the lender, instead of the borrower, will pay the difference.

Adjustable rate mortgage loans

Adjustable rate loans start with a fixed rate for the first three to seven years, and then switch to an adjustable rate after the initial period. In this type of loan, the interest rate changes according to the market rates. This means the mortgagor assumes the risk throughout the loan. When the market rates go up, the buyer pays the higher interest rate. As a sort of incentive, the interest rate for the initial period is lower than that of the fixed rate loan.

Balloon mortgage loans

Also called a reset mortgage, a balloon mortgage loan starts with a very low fixed rate for seven to 10 years. After that, the buyer has to pay off the entire balance. Many people take out these mortgage loans and refinance their homes before it reaches the balloon phase. However, the risk in this scheme is that there is no way to predict the interest rates at the time of refinancing.

Refinancing mortgage loans

A common technique is to refinance a home while paying off a mortgage loan. This helps the owner find lower interest rates, reduce monthly payments, or avoid the risk of long term commitments. Refinancing can be done with most types of mortgage loans, depending on the mortgagors situation.

The simplest type involves switching between two adjustable rate mortgage loans. This is useful when the new loan has lower rates or shorter terms. It is also possible to switch between different types of mortgage loans, such as adjustable rate to fixed rate, or vice versa. The latter is usually done after the initial fixed rate period to maintain stability. Fixed to adjustable rates are ideal for people who do not plan to stay in the home for a long time, and thus may not find mortgage loans profitable.

Today with the state of the economy there are also loans called Short Refinance Loans. These help people where their equity in their home has fallen below their loan amount. For current information about this sort of loan do a standard search of Short Refinance Loan such as on Google.

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New Bank Policies

Recently, the government announced that, to provide relief to homeowners, mortgage giants Fannie Mae and Freddie Mac would offer qualifying homeowners the opportunity to change (that is, improve) the terms of their mortgages if they’re at least 90 days behind on their payments. This was welcome news for those homeowners facing possible foreclosure who had already seen their credit destroyed through late and missed mortgage payments.

But for those homeowners barely keeping their heads above water –that is, still paying their payments on time– this new policy didn’t offer any real assistance. Until recently. Now, banks like Citigroup and JPMorgan Chase are offering mortgage terms adjustments to homeowners even if they’ve missed no payments at all. Before you fall behind on your payments, you can contact your mortgage company to discuss the terms of your loans. This policy has been administered through many banks throughout the country, especially in the areas hit hardest by the housing crisis, Arizona, Florida, and California among them.

Qualifying for Assistance

Sound like a good option for those of you struggling to get your mortgage payments made on time? It is. But only if you qualify. Unfortunately, though the policy of offering assistance to struggling homeowners is spreading, there are many requirements to be met in order to qualify for assistance. The most important of these is that you be hugely strained by your mortgage financially.

The kinds of people who qualify for mortgage term adjustments are people who have seen or are about to see a change in interest rates that will make it impossible for a homeowner to keep their head above water. Or those who have recently lost an income or seen it drastically reduced. The bank will look at whether or not you are truly overburdened by your mortgage payments. And they’ll be strict about what they consider to be an overburden. In essence, if you’re not seeing 40% or more of your monthly income go to your mortgage payment, you won’t be approved for mortgage assistance. And even then, there’s no guarantee that you’ll get help.

How to Get Assistance

Many banks have established special phone lines to deal with clients looking to negotiate new terms for their mortgages. In order to get help with your mortgage, you’ll need to locate the correct department at your bank (if your bank offers this option at all– not all of them do). Ask for a loans modification specialist, or even better, take some time out from surfing internet dating sites and check out your bank’s website. Many banking websites contain information to help distressed homeowners.

When you finally reach the correct department within your bank to adjust the terms of your loan, the hard part will begin. Banks are struggling, too, and they do not want to adjust your loan any more than they have to– and if they don’t feel they have to, they won’t help you at all. So you need to provide a lot of evidence to show that you are in financial distress. In general, banks will request your recent pay stubs, tax returns, and even a letter detailing what has happened in your life or with your finances to necessitate a change in the terms of your mortgage. If they don’t feel you’re having a hard enough time with your mortgage payments, they’ll turn you down flat. So be ready.

Most people requesting help with the terms of their mortgage will be turned down. But those that do qualify for assistance will see a small monthly change in their mortgage payments that may make the difference between being able to make their payments and losing their home. While you shouldn’t expect banks to make any changes to the final principal owed on your home (they want their money, in the end), qualifying homeowners will see adjustments made to their interest rates or temporary adjustments to their principal. And for some homeowners, these small changes can make all the difference.

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For an owner builder to lock in an interest rate on the permanent mortgage prior to even beginning construction on the home, it would be a great advantage. Consider that most loan products on simpler purchase and refinance mortgages will allow you to lock in the interest rate for a period of 15, 30, or maybe 45 days at best. Now consider that an owner builder loan has a typical construction timeframe of twelve months. That’s a rate lock that will need to last for 365 days.

Therefore, to achieve this unusually long rate lock, an owner builder will need to find a construction loan that is a true construction-to-permanent loan, meaning there is only one closing that covers the entire process. The land purchase, the construction phase, and the permanent mortgage are all wrapped into one product. In this way, the loan can establish the permanent rate up front, prior to the start of construction. And, in this way, the owner builder can take advantage of today’s relatively low interest rates.

Looking at the big picture, specifically the country’s long term history of interest rates, you can get a 30 year fixed mortgage today at an interest rate that is pretty close to the lowest rates ever available. In other words, there is no reason to believe that interest rates are going to go down over the long term. Focusing on the big picture, interest rates will have to trend higher eventually.

So, if you want to build your new home with an owner builder construction loan, you may need a full twelve months to complete the construction. You will be managing the process yourself, overseeing the sub-contractors and the delivery of the materials. Therefore, twelve months is not an unrealistic timeframe for the construction period.

If you can lock in your permanent rate now, prior to construction, you can protect yourself against the possibility of interest rate increases over the course of the following year. For example, an owner builder who locks in an interest rate of 6.25% today for a 30 year fixed mortgage on a $250,000 loan will save almost $60,000 over the next 30 years as compared to someone who gets a fixed interest rate of 7.25%. Just that one percent increase in rate will make a difference of almost $60,000 over the life of the mortgage.

Therefore, if your owner builder loan offers the option of locking in the permanent rate prior to construction, then you may want to jump at the chance while the federal government is attempting to keep rates as low as possible to stimulate the economy. However, some people will feel that locking the permanent rate now is depriving them of the chance to hitting the jackpot in case interest rates happen to decrease over the next twelve months.

Though interest rates today are relatively near their historic lows, there is always a chance that they could go down even more over the next year. Therefore, make sure that your owner builder construction loan provides some protection for you. For example, if your loan does not have any pre-payment penalties on the permanent rate, then you can always refinance once you are done building your home. This refinance will act like a second closing, so there will be some closing costs involved. However, if you plan to stay in the home for a long time, the savings over the life of the mortgage should be well worth it.

For an owner builder construction loan to offer a permanent rate lock that lasts a full twelve months instead of the standard 15 days or 30 days, it provides a great opportunity for you to take advantage of the current rates before you ever even hammer the first nail for your new home. And, if you want even more protection in the event that rates drop even more over the next year, then make sure your owner builder loan provides an easy means for you to refinance upon completion of construction – though you probably will never need it.

Chris Esposito works with the Owner Builder 101 program to provide owner builder construction loans for people who wish to manage the construction of their own homes, without hiring a general contractor. Visit OwnerBuilder101.com, or call (877) 876-3688.

What is an Endowment Policy?
Endowment policies are usually used to pay off interest-only mortgages. There are two parts to the policy; the investment, and life cover. The policy lasts for a set amount of time.

If the policy dies during this time, the mortgage is automatically paid off. If the holder is still alive at the end of the ‘life’ of the policy, it should be worth an amount which is enough to pay off the mortgage; but this is not guaranteed, it depends on how the markets perform.

In recent years, some policy holders have found that their endowment is unlikely to reach the valuation that was predicted when they took out the policy. This leaves them unable to finish paying off the mortgage, and can lead them to have to find other ways to pay off the mortgage. Consequentially Endowment Policies have not been as popular in recent years, with many lenders no longer offering them.

Pros
There is still a chance that your endowment will be worth enough at maturity to pay off your mortgage and some.

Cons
If the policy doesn’t perform as well as expected, it might not pay off the mortgage.

Endowment policies will only repay the assured sum if you die, you may have cause to buy extra life cover to provide for other debts.

When the policy expires, so does your life insurance.
How do I know if my Endowment will pay off my mortgage?
Speak to your endowment provider. If it seems likely that your policy is unlikely to be worth enough to pay off your mortgage at maturity you should speak to an Independent Financial Advisor (IFA). You can find your local IFA at Yell.

For more information you can contact the Financial Services Authority, who are in charge of dealing with complaints about endowment policies. It is also responsible for securing compensation for anyone who thinks they may have been wrongly sold an endowment mortgage.

There are private endowment buyers who are willing to purchase with-profit endowment policies of a certain type. This can recover some of the value of your endowment policy. Patient investors will buy up several small endowment policies and wait for them to mature, something you may be unable to do.

John Mce writes on behalf of AAP. Find out all you need to know about endowment surrender, selling endowments and cashing in policies from the UK largest buyer, AAP.