I spend a lot of time looking at the latest mortgage products and finding out how to save my clients money.  I think that the VA loan program is one of the best programs in the market and very rarely do we end up using another program when my client qualifies for the VA loan.  But there are some negatives to using VA loans. 

•·        The appraisal process is more difficult and the VA appraisers tend to be a little more conservative than other appraisers.  Some VA loans have NOT gone through because of value issues.

•·        The upfront mortgage insurance can be as high as 3.3%.  For a $300,000 loan, that is almost $10000 that you are financing that you would not need to spend if you were using a conventional loan

•·        There are some special features to loans that help people maintain ownership of the home for a substantial amount less that what the VA charges, as much as $1000 per month on a $300,000 purchase.  If you do not feel that you are going to be prioritizing paying your loan off in the next 5 years, the VA loan may not be the best choice.

One of the services I offer to people that are looking at several lenders is a FREE Home Loan Report.  I try to show my clients how working with a consultant and having several loan options is the best way to find the right loan program and get the best service for your mortgage needs.  I keep my clients up to date on the best products and keep in touch with you for life to save you time and money on your home loan whenever possible.

For you, I did an analysis over 1 and 5 year periods of time for all the best 100% loan products.  I included a great product available at the 5% down level as well in case you make some money on the sale of your home.  Hopefully, this will give you an idea of how I analyze mortgages for my clients AND you decide that working with me is the best option for you.

Although I did my best to do a thorough analysis, not all of the information can be guaranteed.  I had to make assumptions for the 3 year fixed VA loan because after 3 years, we don't know what the rate will be.  After the first 3 years, the mortgage interest rate could go up by 1% per year, so I assumed the worst case scenario.

The other big factor that affects your loan cost is how much monthly Mortgage Insurance you will actually pay.  In some cases, after 2 or 3 years, I have been able to show my clients how to take their mortgage insurance off their monthly payment because they develop sufficient equity in their home.  Once again, I assumed the worst case scenario and assumed it would NOT be removed for the 5 year analysis period.  That is always going to make the VA loan look better, since there is no monthly Mortgage Insurance with that loan product.

The results of the analysis are interesting.  Look at the stats at the FREE Home Mortgage Report

We find that for the 1 year analysis the best loan by far are the conventional loans.   That is mostly due to the large upfront mortgage insurance from the VA.

By the 5^th year, the VA loans are the most attractive for someone looking to pay the lowest possible costs. 

The best loan option for someone that is trying to get VERY low monthly payments requires 5% down, but the loan would allow you to make payments that were $1000 less than the traditional 30 year fixed payments.  The payments for our 5/1 Hybrid ARM on a $300000 house including everything is about $1800 instead of $2800.

Our company has specialized in VA loans for 21 years.  I attend regular seminars to study the current VA guidelines.  I shared with you the VA loan fact sheet and the funding fee tables.  The VA loan fact sheet is very informative and I spent days reading throught the different VA publications to find that information. 

If you end up deciding that the VA loan is the best loan for you, we would be able to assist you with that loan as well. 

Thank you for taking the time to read this,

Scott

 PS  If you would like to arrange a meeting to go over some of this information, I have some time for you or your friends or neighbors this week.  Just give me a call to set up a time to get together.

Scott Hoag- Financing Specialist

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Gulf & Southern Mortgage
5521 38th Ave N
St Petersburg, FL  33710

Office:  727-344-3995
Cell: 727-644-3656