Category Archives: Economic News

VA Loans: What they Are and How they Work

By John Voket

Most active-duty service members and veterans and some National Guard members and reservists can seek out home-related loans through the U.S. Department of Veterans Affairs (VA).

VA home loan programs may be used to finance the purchase of homes, condominiums or manufactured homes, refinance an existing home loan, or install energy-saving improvements. The three main types of guaranteed home loan benefits are:

• Purchase Loans
• Cash-Out Refinance Loans
• Interest Rate Reduction Refinance Loans

Qualified vets need suitable credit, sufficient income and a valid Certificate of Eligibility (COE) to be eligible for a VA-guaranteed home loan. Private lenders underwrite and fund VA home loans according to VA standards. VA’s partial guaranty for these loans means that nearly 90 percent of all VA-guaranteed home loans are made with no down payment required.

If a VA-guaranteed loan becomes delinquent, the VA will work with the borrower to avoid foreclosure, including providing financial counseling and, in some cases, direct intervention with a mortgage loan servicer on the borrower’s behalf.

Any veteran or service member having difficulty making mortgage payments should call (877) 827-3702 to speak with a VA Loan Technician. More information about avoiding foreclosure can be found at: benefits.va.gov/HOMELOANS/resources_payments.asp.

Native American veterans who want to live on Federal Trust land can seek assistance through the VA’s Native American Direct Loan (NADL) program, which provides direct loans to eligible Native American veterans for the purchase, construction or improvement of a home.

The VA also offers grants to veterans with certain service-connected disabilities to build an adapted home or make modifications to an existing home. Three types of grants exist: Specially Adapted Housing, Special Housing Adaptation, and Temporary Residence Adaptation.

Homeless veterans, or those at imminent risk of becoming homeless, are urged to contact their local VA medical center, call (877) 424-3838, or visit va.gov/homeless.

Consult your real estate professional to learn more about the VA’s home-related services, or visit explore.va.gov/home-loans-and-housing.

Thanks for visiting my Blog site. If you would like to discuss this topic with me or get more information please contact me by calling 919-247-4667 or emailing me at Tim@TheTrianglesBroker.com. And you can always visit my personal real estate website for lots of additional information and to search for homes at www.TheTrianglesBroker.com or www.BuyAndSelllingTriangleHomes.com McBrayer – The Triangles Broker.

New Survey Shows that Retirees Want to Stay in Their Homes

An overwhelming number of people nearing or in retirement want to remain in their current home as long as possible, according to the results of a new survey released by The American College of Financial Services.

The Home Equity and Retirement Income Planning Survey found that 83 percent of the respondents do not want to relocate in retirement.

“One very interesting notion was that the desire to age in place increases significantly as you get older,” says survey author Jamie Hopkins, Professor of Retirement Income Planning and Co-Director of The American College New York Life Center for Retirement Income Planning. “We saw more uncertainty between the ages of 55 and 62. But once we started getting past 62 and you start moving into retirement, we saw that these individuals really don’t expect or want to leave their homes.”

The study also saw almost no homeowners with a strong desire to rent in retirement.

The survey, created to better understand retirees’ attitudes about home equity and housing decisions, also revealed that 44 percent have considered using home equity in retirement, but that only 25 percent feel comfortable spending it as a source of income. It also found that only about 20 percent of the respondents felt that it was extremely important to leave their home as a legacy asset to their children or other heirs, while 45 percent listed it as not important.

The results were based on surveys of more than 1,000 people between the ages of 55 and 75 with at least$100,000 in investable assets and $100,000 in home equity. About 53 percent of the participants were male, 47 percent female.

7 in 10 Don’t Understand Reverse Mortgages

Another purpose of the study was to gauge retirees’ knowledge of reverse mortgages. According to the survey, just 30 percent of the participants earned a passing grade on basic knowledge about reverse mortgages. Furthermore, 10 percent of respondents answered all ten questions incorrectly.

“This is really going to open a lot of eyes about just how little people moving into retirement with some home equity know about reverse mortgages,” Hopkins says.

Other key findings include:

Despite a strong desire to age in place, only 14 percent of the respondents had considered a reverse mortgage, with only one respondent having entered into a reverse mortgage;
The number one reason (44 percent) people did not enter into a reverse mortgage was they did not need it because of sufficient income. Other reasons, in order, were “too young” (18 percent), “not ready” (10 percent) and “too risky” (9 percent);
The respondents were generally misinformed about reverse mortgages, while holding a slightly negative view on reverse mortgages as a retirement tool;
Respondents thought they were more knowledgeable on reverse mortgages than their knowledge quiz answers suggested, showing both some degree of overconfidence and misunderstanding.

So what to make of this new research? Hopkins says financial advisors need to do a better job educating and talking to their clients about home equity. Additionally, products and strategies like reverse mortgages need to be given a second look by consumers and advisors as there are a lot of misconceptions out there today as evidenced by the survey.

“Hopefully that’s the biggest takeaway from this survey,” he says. “Advisors and consumers need to start thinking about home equity, including reverse mortgages, as part of the retirement income planning process.”

For more information, visit www.TheAmericanCollege.edu.

Thanks for visiting my Blog site. If you would like to discuss this topic with me or get more information please contact me by calling 919-247-4667 or emailing me at Tim@TheTrianglesBroker.com. And you can always visit my personal real estate website for lots of additional information and to search for homes at www.TheTrianglesBroker.com or www.BuyAndSelllingTriangleHomes.com McBrayer – The Triangles Broker.