What Home Loan is Right for You?
When you’re on the home purchasing journey, there are a lot of things to consider. From the finish on your front door all the way to the school districts around your house, home shopping is no joke. However, there are arguably few things as important as securing the right financing for your home. Whether it’s the type of financing you choose to take on or it’s the mortgage lender or broker you choose, selecting the right situation for yourself is essential.
At VRM Lending LLC, we focus mainly on 4 types of home loans: the Vendee Loan, the FHA Loan, the Conventional Loan, and the VA Loan. All 4 of these loans are equally great — but not all of them make sense for everyone. Today, we’re breaking down the different types of loans so you can choose the one right for you.
The Vendee Loan is a program that allows borrowers to purchase properties owned by the VA — giving borrowers a competitive rate that could save them big money in the long run. Though not everyone is eligible for a Vendee™ Loan, those who are can typically find a loan term at a competitive interest rate, along with possibly little to no money down and no mortgage insurance requirement.
The FHA Loan is a loan offering that allows people with less-than-stellar credit or poor financial histories to purchase a home — giving them a flexible loan option that doesn’t have incredibly strict requirements to take out. However, there are certain requirements that must be met in regards to the home itself, including the home cost and its general condition.
Conventional Loans, while not huge numbers-wise — they can be taken out up to $510,400 — come with a highly competitive interest rate and take away the need for private mortgage insurance in some instances.
If you’re a veteran, service member, or spouse, the VA Loan is a great, no-down-payment-required loan option. If you are eligible for the VA Loan, you may be able to get more favorable terms, a lower interest rate, and a more affordable home loan option.
At VRM Lending LLC, it’s our job and mission to help you find the right loan option for yourself and your future home. Whether it’s the VA Loan, the FHA Loan, or something completely different, our team is here to help you choose and apply for the right one. Using an efficient 3-step process rooted in our care and commitment to you, we’re here to assist. Contact us today.
*VRM Lending LLC is not affiliated with or acting on behalf of or at the direction of the FHA, VA, or Federal Government.*
With the VA Vendee™ Loan program, borrowers are given the option to take out on a loan for a house they love without the headache.
What Does a Closing Cost Include When Buying a Home?
When it comes to the property buying process, there’s a ton of terminology that needs to be kept in mind. From amortization all the way to contingencies, it’s essentially one vocabulary lesson after the other. As a real estate professional, closing cost is a term that will consistently be brought up — whether it’s by a fellow lender or a client. While you may know what it is on a high level, you may not know how to describe each piece of information that makes up a closing cost — and, as closing costs often make up anywhere between 2% and 5% of a home loan, it’s important to know the details.
Here’s what you need to know about closing costs and what’s included in them:
- Any lender fees: Lender fees are typically paid at closing. This includes any legitimate fees the lender charges to process, approve, decline, or fund the mortgage loan
- Appraisal fees: The cost of a property appraisal or survey is usually wrapped into closing costs, and they are typically always recommended (if not required) for any property purchase.
- Title fees and title insurance: Most of a closing cost is related to the title, which includes Lender title insurance (usually not an optional addition) and settlement fees. Title insurance is often not an optional addition.
- HOA fees or homeowner’s insurance premiums: Often, most property purchases require a year of property insurance to be paid in advance — and, depending on your location, homeowner’s association fees may also be paid in advance.
- Attorney fees: Depending on the state you’re purchasing property in, attorney fees may be added.
- Property tax: You will likely need to pay property taxes in advance — typically both buyer and seller pay a prorated amount of property taxes to cover charges for the amount of time they individually will/have lived in the property — which is rolled into closing costs.
- Private mortgage insurance: Depending on the amount put down at signing, private mortgage insurance (or PMI) may be required to protect the lender — especially if you put down less than 20%.
- Additional miscellaneous costs: While you shouldn’t be paying a ton of random costs — if any — in closing, there are several miscellaneous costs that may be included. From local requirements all the way to agent commissions, there are several things you’ll want to pay attention to.
Closing costs when buying a property should never be a surprise — and your loan estimate will include a closing cost estimate, as well. To make sure you’re not paying too much, pay special attention to your closing disclosure — a document you should receive at least three days before closing that details your closing costs.
At VRM Lending, we strive to make finding — and financing — properties easy as possible. If you or a client is ready to get in a dream property, contact us today.
With the VA Vendee™ Loan program, borrowers are given the option to take out on a loan for a house they love without the headache.
What is the VA Vendee™ Home Loan?
When you’re looking to buy a home, it’s easy to get distracted and overwhelmed by the many options available to you. Everyone has different advice, each lender has different terms, and it seems like there’s a million directions you can go. How are you supposed to know which way is best?
With the VA Vendee™ Home Loan Program, borrowers receive a money-saving, competitive rate to purchase a VA, real-estate owned home for little to no money down. As a unique program through VRM Lending LLC, the Vendee™ loan gives borrowers the option to purchase a home owned by the Department of Veteran Affairs that will save them money, time, and headaches. But, like with any mortgage loan, there are lots of questions to be answered. Here’s everything you need to know about the VA Vendee™ Home Loan:
Why Choose Vendee™?
When borrowers choose the VA Vendee™ Loan Program, they’re able to choose from VA-owned properties across the country with financing that offers competitive, money-saving rates. Vendee™ loans are unique in several ways, from the competitive interest rates and little to no money down required to the lack of mortgage appraisal requirements and penalties for pre-payment.
When taking out a Vendee™ home loan, borrowers:
- Choose from 15 or 30-year loan terms
- Don’t need a large sum of money for down payment
- Aren’t required to have mortgage insurance
- Won’t have penalty for pre-payment
- May have the option to roll in origination and funding fees
- Have competitive interest rates
Who Can Take Out a Vendee™ Loan?
The VA Vendee™ Loan program is open to veterans, non-veterans, owner-occupants, and investors. Anyone can apply for a VA Vendee™ Home Loan, and you can start the process by contacting VRM Lending today.
What’s the Process to Take Out a Vendee™ Loan?
The process to take out a Vendee loan is simple and efficient, starting with pre-approval and ending with closing on your new home. Here’s a deeper look at the Vendee™ process:
- Pre-Qualify: First off, borrowers will verbally talk with a loan officer about everything from income to debts to see if they’ll be a good fit. The information will then be passed to the underwriter, who will review each case individually.
- Find a Home You Love: Borrowers will find a Vendee-qualifying home they love, whether by working with a realtor or perusing our properties.
- Apply: Once pre-qualified, the official application takes place with your name, your income, your Social Security number, a credit check authorization, the address and value of the home you’re wanting to purchase, and your desired loan value. The loan officer will run a credit check and send an initial disclosure, and you’ll choose to proceed with the process or not.
- Get Your Loan Processed and Underwritten: Once the credit is checked and the mortgage package is put together, it proceeds to the underwriter. The underwriter determines whether or not the package is acceptable, and gives the green light to those loans.
- Sign the Closing Disclosure: You’ll receive a 5-page disclosure detailing all of the details of your loan, from costs associated to your projected monthly payments. You’ll receive this at least three days before closing to ensure that you have ample time to review.
- Close: Once every I is dotted and T is crossed, the closing agent will schedule a time for you to sign the loan closing documents. Once everything is in order, the lender arranges for the funding of the loan. Signed, sealed, and delivered, it’s yours!
With the VA Vendee™ Loan program, borrowers are given the option to take out on a loan for a house they love without the headache. The easy process and competitive rates make it a no-brainer, and our borrowers can save thousands of dollars compared to traditional mortgages. Connect with a loan expert today, and we’ll help you get the home you’ve been waiting for with the rates you deserve.
When it comes to purchasing a home, there’s a vital step that needs to be touched on: taking out the home loan itself. The loan process can be a long (and stressful) one if you choose the wrong servicer, which is why it’s so important to find first-hand knowledge that makes taking out your home loan as painless of a process as possible.
What Does COVID-19 Mean for the Housing Industry?
Today is March 18th, 2020, and the world has come to a standstill. As of today, there have been a confirmed number of over 200,000 infected with COVID-19 and over 8,000 deaths around the globe. As this global pandemic increases and spreads from human to human, it causes one thing amongst all of society; fear. As the world fears and panics, it shows in their actions. People are stockpiling and purchasing more things than usual. Walk into many stores in America and you will see empty shelves where water bottles, toilet paper, disinfecting sprays and hand sanitizers used to be. Faced with the reality of being stuck at home for weeks at a time, the public is ensuring their preparation. The new Coronavirus and the reality of staying in your home are beginning to go hand in hand. But Coronavirus has another relationship with homes, the virus may have a significant effect on the housing market. As toilet paper sales increase, real estate sales could decrease. Let’s take a look at some of the ways our housing market could be affected by COVID-19.
What Does COVID-19 Mean for the Housing Industry?
But first, it’s important to note that no one knows for sure what exactly will happen as a result of these recent events. We can only speculate based on the effects we have already seen from the virus and the historical precedence, especially during the 2008 market crisis and recession.
#1: Supply lines are being disrupted:
One concrete effect of the virus is on home building itself. Home building may be a little tougher now than usual. A large percentage of home building materials are manufactured and shipped from China. As China finally starts to rebound from their own COVID-19 pandemic, they are only now able to start bringing their manufacturing output back to their volume before the virus virtually shut the country down. But it will not happen overnight and because China is one of the largest global distributors, this affects the housing market and the rate homes are able to be built in a considerably serious manner. As less and less materials are being shipped to the United States, this results in a decrease in production of home building.
#2 Lower Mortgage Rates:
The stock market fell to an all-time low this week, signaling the start of another recession. To counteract the economic impact of this crash and support banks and businesses, The Federal Reserve has begun taking drastic measures. Sunday night, the Fed announced further cuts to the benchmark interest rates, bringing it to zero percent. Additionally, as investors sell off their stocks and buy bonds, bonds increase in value and demand. The higher the price of the bond, the lower interest rates start to get. So what does this all mean for the housing market? Basically, when all of this starts to occur, mortgage rates tend to get lower too. We will see lower interest rates, more mortgage lending and more people refinancing their mortgages to lock in the low interest rate. What does this mean long term? It’s hard to know for sure but most economists believe we can expect to see an initial rise and then an eventual decline in the housing market, especially as we head into another recession.
Commercial Real Estate Will Decelerate:
Due to the scare of the virus and the potential spread of it from person-to-person, it is likely that this will hit commercial real estate hard. Quarantines will keep people away from brick and mortar stores, small business will be forced to close their doors, and big companies will begin downsizing. Current projects and construction will be delayed due to shutdowns, employee and material shortages. Potential buyers also won’t be viewing commercial properties currently on the market, resulting in a decrease in property sales.
We all want to know what the coronavirus means for the housing market. Will we see a crash reminiscent of the 2008 mortgage crisis? Will we bounce back quickly? Are we headed for a recession or a great depression? As dramatic as these question can be, they are important to address so we can prepare for whatever the outcome may be. No one fully knows what the effect of all of this will be. Although the scare of the virus is resulting in significant changes to the housing market, the market itself has not yet been drastically affected by the virus. As we’ve seen, however, the situation changes every day and hour, so who knows what tomorrow holds. Right now, it’s important to remain calm and avoid jumping to any drastic measures before we have a more concrete hold on the situation. Although surroundings may seem difficult, considering that inventory is low and demand is high, you can still purchase a home. Each individual has a different situation and the best solution is to make decisions based on that. If you have the right amount of money, and the property is right for you, check out our properties page, you still have the power to make that purchase, regardless of what virus is in the air.
*We are not financial advisors and any decisions should be made by each individual themselves, based on their own economic situation. *
Real estate investments are a good way to build wealth and have financial freedom. A key part of successful real estate investing is finding the best real estate deals on the market. When purchasing an investment property, clever investors ensure that they are getting a great deal. However, getting a good real estate deal is usually not easy, particularly for first-time investors. So, how do you know if a real estate deal is a good one? In this article, we discuss what makes a good deal in real estate. Read on to find out.
What Is a Great Real Estate Deal? Things to Look For
1. Low listing price
An investment property’s listing price is critical when looking for a good real estate deal, depending on your financial capacity. As a real estate investor, you should never purchase what you can’t afford. An expensive real estate investment property will usually have high operating costs too. Purchasing an investment property below market value could provide you with a higher return on investment.
To know whether the purchase price of an investment property for sale is reasonable, you need to compare it with its fair market value. If the listing price is lower than the fair market value of the property, it would probably be a good real estate investment deal. Consider doing a real estate appraisal to estimate the value of the rental property for sale.
2. A profitable location
Location is one of the most important factors when it comes to investing in real estate. A rental property’s location will determine the rental income and occupancy rate. When looking for a good real estate venture, you first have to research the real estate market at both city and neighborhood levels. A great location can make up for some of the limitations of a rental property. However, there is little you can do if you invest in a poor location.
Here are some general features of a good investment location:
- Job opportunities
- Low crime rates
- High population growth
- Nearby amenities like hospitals, restaurants, etc.
- No zoning issues
- Public transportation
- Future developments
- Booming tourism industry
- Safe from natural disasters like earthquakes and floods
3. High rental income
The main purpose of purchasing an investment property is to generate income. As a real estate investor, it’s best to find an investment property with a high monthly rental income. If your monthly rental income is high enough to cover your monthly rental costs, you will be able to create positive cash flow. And as you know, cash flow is a top priority! Before making an offer on a property, research the average rental rates of comparable rental properties in the area, and estimate its rental income.
A good way to find a great real estate deal based on the rental income is to follow the 1% rule in real estate. The 1% percent rule measures the ability of the rental property to generate rental property cash flow. This rule of thumb states that the monthly rent should be equal to or higher than 1% of the total purchase price of a real estate investment property. This rule is used to determine whether or not the monthly rent from a rental property will be enough to cover its monthly mortgage payments. Worst-case scenario, you should break even on the rental property.
4. Low rental expenses
Rental expenses are also essential in finding a good real estate deal since they will also affect rental property cash flow. Before purchasing an investment property, you should find out all costs associated with purchasing and operating it. Expenses may be in the form of repair and maintenance costs, insurance, property taxes, HOA fees, and mortgage payment.
If rental expenses are too high, they will eat into your rental income and likely lead to negative cash flow. If you are wondering how to determine a good rental property, rental expenses are something that you should unquestionably take into consideration.
5. Low repair cost
While purchasing below market value rental properties has its benefits, a beginner real estate investor should be cautious about buying a fixer-upper. If a rental property needs a lot of repair work before it can be rented out, it can wash out any profit you may have made from rental income.
Therefore, when looking for a good real estate deal, you should do a home inspection to know the repairs required and how much they will cost. A rental property that is in excellent condition can be rented out right after purchasing. You don’t have to wait long before you start earning rental income.
Nevertheless, you can also buy an income property that needs repairs. Just make sure you account for those costs when determining your return on investment. This will help you understand if purchasing the property is a good deal or a bad real estate deal.
6. Real estate appreciation
Aside from the profitability of an investment property now, an investor should also consider its potential to grow in value over time. Real estate appreciation is normally realized when one is selling a property after an increase in the selling price. To get a good estimate of whether an investment property will appreciate, check local real estate market trends.
How to Find Good Real Estate Deals
Now that you have the answer to the question “what is a good real estate deal”, the next thing is to know how to find real estate deals. With many people getting into real estate investing, it’s becoming even more challenging to find a good real estate deal. As a real estate investor, what can make the difference is using the right tools to do your due diligence in real estate. If you are thinking of how to analyze real estate deals in the best way, consider working with VRM Lending LLC.
The best way for investors to find good real estate deals in the United States housing market is by using the Listing Portal (vrmproperties.com). With this tool, you can search for the best performing investment properties in your market of choice that meets your search criteria. The portal allows you to set your search criteria using filters like budget, the number of bedrooms, location, and property type.
The Bottom Line
Successful real estate investing starts with understanding how to manage a good rental property. The above features provide the solution to the question “what is a good real estate deal?” So, next time you are looking for a real estate investment property to buy, be sure to consider the above features.
5 Common Mistakes Short-Sale Buyers Make
- Skipping the home inspection.
- Ignoring property problems.
- Ignoring legal and insurance information.
- Leaving too little time for closing.
- Falling hard for a bad home.
Know what you’re getting into before you buy a short sale or foreclosure property, and be watchful of these five common mistakes.
1. Skipping the home inspection process
Tag along when your home inspector shows up at the property. You might be surprised what you can learn.
- Ask for repair estimates when an inspector notes a problem, or do some research on your own later. Many homeowners underestimate how much renovations can cost.
- You may want to use specialized inspectors to look for expensive problems such as mold, structural damage, and termites, especially if it’s a common problem in your area.
- Be sure to hire an inspector that’s highly rated. Get recommendations from friends, or weigh online user reviews carefully. Like with all industries, there are excellent, marginal, and bad property inspectors.
- You are granted a certain window of time to inspect the home, known as the inspection period. Reducing an inspection period may give you leverage in a regular real estate situation when you’re placing a bid, but don’t skip or skimp on the inspection period when you’re looking to buy a foreclosed or short-sale home. Utilize this time to make an informed decision.
2. Ignoring property problems
Homeowners who face foreclosure can become angry and take their anger out on the house they’re about to lose.
Vacated houses in foreclosure may sit empty for months or years before they’re bought. As a result, problems occur, such as mold, leaks, termites, thieves, filth, and squatters.
There are a couple of little-known loan programs, the FHA 203(k) and Fannie Mae HomeStyle, which offer solutions for homebuyers who want to renovate.
3. Ignoring legal and insurance information
A standard disclosure statement will usually reveal whether a house is in a flood plain or had any unpermitted renovation. But REO properties often sell as is, without disclosure, so buyers need to do extra research on the home.
Ensure that all renovations have been permitted and approved. If not, and there is an issue, the city can cite you.
4. Not leaving enough time for closing
Short sale and foreclosure home buyers need to be cognizant that the sale won’t necessarily close as soon as it would for a regular home purchase. The short seller’s lender must approve the foreclosure terms or short-sale price, which will be less than what the seller owes. Banks may also be slow to respond.
It’s not always possible or even advisable to get a home loan from the bank that has a mortgage on the short sale you’re buying. In fact, it’s best if you show the lender a preapproval letter that you received from your own lender inside the last 30 days.
5. Falling hard for a bad home
Never just assume you’re getting a great deal.
Ask yourself these common-sense questions:
- If you were to buy this property, could you afford to rent it out for as much as, or less than, your mortgage payment? Use the VRM Lending payment calculator to estimate your mortgage payment.
- If the home’s value falls 20 percent, will you still feel satisfied with your purchase?
- How much money will you have to spend on the property to make it livable?
As long as you completely understand how foreclosures and short sales work, nothing should stop you from getting a great deal and finding the house of your dreams. Just be sure to fully consider the home inspector’s advice and report before making your final purchasing decision.