Gone are the days of $450 appraisals. If an individual wants to purchase a home or refinance, they now have to pay $500 for an appraisal of a property. Alas, the VA could no longer hold off an increase in the VA appraisal fee amid the toxic loans and shrinking market values. As of April 1, 2009, the VA put out an update (26-09-4) which requires our esteemed VA appraiser to include the Fannie Mae Market Conditions Addendum, Form 1004MC, in all VA appraisal reports. Fannie Mae requires appraisers to document an overview of neightborhood market conditions and trends. Fannie Mae has the ability to buy loans from lenders, banks, etc. to keep the flow of money going so lenders have money to do more mortgage loans with the freed up funds. A lender needs to be sure that a loan meets Fannie Mae underwriting guidelines or they could be out of business pretty quickly if Fannie would not buy the loan.
The VA set the rate for the extra time this report takes at $50, which is passed on to the borrower. Appraisers' jobs are more difficult than ever. Many borrowers are frustrated at the costs of appraisals (people often tell me "the appraiser was only at my house for 30 minutes!"), but what they don't see are the hours of work behind the scenes. The extra $50 fee is in line with yet more responsibility heaped on the appraisers...this makes a better report for you and ensures that the deserving Veteran will buy the right house at the right price with more in-depth data to support the value. Solid data = a solid purchase, and long-term satisfaction with your purchase!
Feel free to talk with any of us about your VA home loan questions. You will have a great experience working with us. We are Veterans and we are in the business to help Veterans with the most important purchase most of us will ever make.
Michael Frakes, Retired U.S. Navy, Sr. VA Loan Specialist
Today I want to focus on a topic that, for veterans, may seem obvious, but for many outside of military circles, can be confusing: the VA Guarantee Loan. This loan has been around since 1944. It is a benefit you earn for your service in the military. These loans have remained solid during the current shaky real estate crisis. VA loans have a lower default rate than other types of loans, and for this reason, you can be proud of your VA loan if you have one. If you don't, please talke to us about qualifying for one. Even those veterans who have conventional mortgages can refinance into a VA loan and possibly reduce their interest rate as well as take advantage of the other perks that come with a VA loan. One of the reasons that VA loans are so stable is that veterans have to qualify for their loans on income, credit, and many other factors.
Many Veterans find themselves in conventional or other types of loans simply because the lender they used knew little about VA loans, and it was more convenient for the lender to sidestep the extra effort to get a Veteran into a VA loan. Here at Creekside Mortgage, we have our customers' interests at heart. In addition to our close working relationship with the Regional VA office, we specialize in VA loans, so we can leverage all of the benefits available for our borrowers.
Floyd N. Greenwald, U.S. Army Retired, Sr. VA Loan Specialist
Home Valuation Code of Conduct changes the business of appraisals
Let's talk about how the Home Valuation Code of Conduct (HVCC ), which went into effect in May of 2009, is impacting conventional home loans in Clark County. Appraisals are more expensive for the borrower, as well as time consuming. Additionally, by law, there is no contact between the loan officer and appraiser--not even the lender and appraiser. While these guidelines were established to ensure more accurate home valuation, it makes scheduling of appraisals to coincide with closing and updating borrowers more difficult. Additionally, the longer time period to get an appraisal makes it more difficult to close the loan in the same time period. The upside? We are working our hardest to make the transition and changes in the industry seamless for our borrowers!
FHA Home Loans
We love FHA! It's still the best first-time homebuyer program around! The down payment can be gifted by a family member, and closing costs and prepaids can still be paid by the seller. With lender guidelines tightening on credit scores, what program other than VA will allow a borrower to purchase a house or refinance their home with a 620 credit score, no reserves, and no hit to the interest rate?
USDA Home Loans
Thank goodness USDA home loans came along! Home loans through the United States Department of Agriculture are great 102% loans with no mothly mortgage insurance and great interest rates. Closing costs can be paid by the seller. For the buyer who wants to live in a rural area, and can meet the guidelines, it can't get any better! USDA loans do usually take longer to close due to the fact that Rural Development underwriters are slammed right now!
--Carole Collett-Wheeler, Government Mortgage Specialist