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When is the VA Loan not my best option?

When is the VA Loan not my best option?

For most borrowers, the VA loan represents the best available option for a home refinance or purchase. The terms of the loan, the minimal requirements and guidelines and especially the no money down option make the VA loan the perfect choice for almost every military borrower. The whole premise behind the loan program is to nearly guarantee that a veteran of the military or a surviving spouse have the availability to purchase a home. There is really no other alternative if you qualify for some type of VA financing.

One Scenario When VA Financing is not the Best Option

The only scenario out there for veterans and surviving spouses who want to choose a conventional loan over VA financing is cash reserves. If the veteran or spouse has more than enough reserves to cover the 20 percent down payment requirement, then it is possible to obtain a lower rate than you would get from the VA. However, it is still probably not the correct alternative to VA financing. The borrower can hang on to their cash reserves, still receive a low interest rate and use the reserves to maintain their new home. The benefits from VA financing are far greater than any type of conventional financing. That is why military borrowers should always consider going the VA for any type of home purchase or refinance.

Finding Help With MortgageDepot

If you still feel like exploring other options aside from the VA, then MortgageDepot can help. We are a well-respected team of mortgage experts that guide you through the entire process. We help you make the correct choice on any type of mortgage financing, whether it is conventional or through the VA. Give us a call today and find your best available option.

Contact us today at 800-535-0270 for more information or email us here.

What is a difference between eligibility and pre-qualification?

What is a difference between eligibility and pre-qualification?

Many veterans who are looking to qualify for a VA Loan often confuse eligibility and pre-qualification. It is important to keep in mind that not every veteran who is eligible for a VA Loan can secure a loan. Just because you are eligible for a VA Loan does not give a guaranteed approval. There are certain underwriting guidelines that need fulfilling before anyone is pre-qualified for a loan. There is a step that goes a little further than pre-qualification, which is outright pre-approval. When you are pre-approved, you are basically guaranteed that you qualify for one or more VA Loan Programs.

The Difference Between Pre-Qualification and Pre-Approval in Action

Based on the amount of credit information you provide the lender who provides a VA Loan, they are able to pre-qualify you in the form of an estimate that shows how much you can receive from a VA Loan. Eligibility means you meet the initial qualifications for a specific type of VA Loan, but again it is not a guarantee of approval. Pre-approval assures that the bank is ready to offer you some type of VA financing. The financing is often used for a new home purchase or refinance of an existing VA Loan. The difference between each term is quite simple and helps guide you through the VA Loan process.

Using MortgageDepot for your VA Mortgage

If you are struggling with the entire process, then we can help. We have a team of mortgage specialists who work exclusively with VA and FHA loans in the New York State area. We guide you throughout the entire process which requires very little effort on your part. If you want to simplify the process as much as possible, then you certainly need to contact us.

Contact us today at 800-535-0270 for more information or email us here.

Can I pay off a VA Loan early?

Can I pay off a VA Loan early?

Many military borrowers of VA loans often wonder if they can pay off their loan early. With conventional loans, you can pay off your loan early but there is a huge pre-payment penalty. The penalty is usually 20 percent of the original principal balance. Traditional VA loans do not work that way, there is no penalty for paying off your loan early or having another military veteran assume your loan. The focus lies in the benefits of paying off your loan early and how you can save thousands of dollars on your fixed rate 30 year loan.

How to Benefit From Paying Off Your Loan Early

If you have a traditional 30 year fixed rate VA loan, you can expect to pay tens of thousands of dollars in interest. You can also expect to pay more if you stay in the home for the full 30 years. One way to shave off thousands of dollars in interest is to pay a little extra on your mortgage payment. If you can pay anywhere from $50 to $100 on your mortgage payment each month it leads to you paying off your loan early and saving thousands of dollars. Just notify the lender on your payment that the extra funds are to reduce the principal balance of the loan or they will put the funds in an escrow account. Keep that in mind when you are paying extra on your mortgage.

Where to Find Help for Your Early Pay Off

If you have questions about paying off your VA loan early, do not hesitate to contact us. We are a professional mortgage service firm based out of New York with a strong reputation for helping people with their mortgages. We guide you by the hand throughout the entire mortgage process.

Contact us today at 800-535-0270 for more information or email us here.

How do basic and bonus entitlement work?

How do basic and bonus entitlement work?

If you are seeking out a VA Loan, it is important to know that each eligible veteran has a basic and bonus entitlement. However it is important to learn what an entitlement is and how it affects your VA loan amount. The simple definition reads as follows, “Each veteran is entitled to a certain amount of money that the VA will guarantee.” So, here is a breakdown of basic and bonus entitlement work in action:

  1. A basic entitlement guarantees that the VA will cover up to $36,000 of a loan while the bonus entitlement covers $68,250. What this means is the VA will guarantee that $104,250 of any loan under $417,000 will be paid in case of default.
  2. The $417,000 figure represents the amount of loan funding available from Fannie Mae and Freddie Mac. These two institutions guarantee securitization on private loans, VA loans and FHA loans. However, in most states throughout the country, the maximum loan amount remains at $417,000. Fannie and Freddie will not buy any loan that is over that benchmark loan amount.
  3. Any loan amount over $417,000 is considered a jumbo loan, and the only way to obtain this amount of financing is through private lenders who use guidelines outside of the VA and FHA.

Important Facts to Keep in Mind

Most private lenders will loan up to four times the amount of basic and bonus entitlement amounts. The only barrier is the $417,000 benchmark loan amount. However, the guaranteed fund coverage provided by the VA ensures you will receive a quality loan that is quite affordable.

How MortgageDepot can Help

We are a leading mortgage finance company based in New York. We have a quality staff that specializes in VA Loans. Since basic and bonus entitlements are tricky, it is wise to seek out the advice of our specialists. We guide you through the entire process and guarantee we will place you in a loan that works in every way.

Contact us today at 800-535-0270 for more information or email us here.

How long do I have to wait after bankruptcy to get a VA Loan?

How long do I have to wait after bankruptcy to get a VA Loan?

Many borrowers often wonder how long they have to wait in order to obtain VA Financing after bankruptcy. Many people who file for bankruptcy are under the impression that they are no longer eligible for any type of VA Loan. Bankruptcy and your ability to qualify for a conventional loan are damaged, but not your ability to qualify for a VA Loan.

Chapter 7 Bankruptcy

If you file for this form of bankruptcy in order to liquidate your assets, you must wait at least two years before you can reapply for VA Financing. Keep in mind that the two years begins upon discharge of the bankruptcy, and not the date of actually filing for bankruptcy protection.

Chapter 13 Bankruptcy

If you file for this form of bankruptcy, you are actually consolidating all your debt into one affordable monthly payment. The waiting period for this type of loan repayment plan is one year, and again, is contingent on the actual discharge date. Remember to obtain permission from your trustee if you plan on applying for VA Financing. One other thing to keep in mind; although you have filed for bankruptcy but did not meet your payment obligation, then you are ineligible for any type of VA Loan Financing. A proven track record is the key to obtaining a loan after bankruptcy has been discharged.

Looking to MortgageDepot for Help

We are a leading mortgage institution in the state of New York. We help you find a way to qualify for VA Loans even if you are struggling with meeting your repayment obligation. Our network of lenders are willing to help with providing you a Veterans Administration loan that works within the guidelines of your bankruptcy. Seek out the guidance from our loan professionals.

Contact us today at 800-535-0270 for more information or email us here.

Who sets the VA Loan guidelines, the VA or my lender?

Who sets the VA Loan guidelines, the VA or my lender?

Many new borrowers who inquire about a VA Loan often wonder who sets the guidelines, the lender or the VA. It may seem confusing at first, but the truth of the matter lies in the fact that the guidelines set forth are administered by the VA, and the lender must follow a strict set of guidelines. A VA Loan is designed and developed by the Veterans Administration and the lender must comply with the VA in order to sell the loans.

Why the VA Does not Offer Loans Directly

In simple terms, the VA does not have time to administer a loan from application to final closing. That is why the VA builds the loan program from scratch including all the loan guidelines and leaves the administering of the loan to private lenders. However, private lenders are not free to pick and choose who qualifies and who does not qualify. They must follow a strict set of guidelines laid out by the Veterans Administration or face losing their ability to offer a VA Loan. This could cost the lender millions of dollars in business if they are no longer able to offer any type of VA Financing.

Contact us today at 800-535-0270 for more information or email us here.

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