Buying a Home with a VA Loan in Maryland

The average cost of a home in Maryland is higher than in most areas of the United States. Homes in Maryland average around $250,000 with homes priced higher than $500,000 not being uncommon. To the prospective homebuyer in Maryland, trying to find financing to secure a higher priced home can seem like a daunting task, but if you are a veteran, active duty member, or an eligible spouse, securing financing for your home in Maryland is easy with the VA home loan program.
What is a VA Home Loan?
Since 1944, the VA has provided millions of veterans and active duty service members the chance to achieve homeownership through the VA home loan program. The VA partially insures each loan which allows the VA loan program to provide excellent benefits to service members that they wouldn't be able to find with regular lending programs. Some of the VA programs more popular benefits are competitive interest rates, flexible eligibility requirements, and lenient loan terms, but also include:
• Zero down payment required
• No mortgage insurance required
• Flexible debt-to-income ratios allowed
• Regulated closing costs

Who is Eligible for a VA Home Loan?
The VA home loan program is dedicated to helping veterans and active duty service members purchase homes. Because of the nature of the real estate economy across the country, it is becoming harder and harder to finance homes (or refinance existing home loans) in the conventional manner. Nearly 80% of all veterans and active duty service members who obtain financing through the VA loan program would not have been able to do so through a conventional loan program. To initially meet eligibility requirements for a VA home loan, borrowers must obtain a Certificate of Eligibility and:
• Have served 181 days on active duty or 3 months during war time
• Or have served 6 years in the National Guard or Reserves
• Or be the spouse of a service member who was killed during active duty

Although the eligibility requirements to secure financing through the VA home loan program are limited, most VA-approved lenders will require a mid-range credit score of at least 620 to qualify a borrower. Even those who are skeptical of their eligibility are still encouraged to apply for a VA loan as even those with an imperfect credit history have been approved.


Thanks to James Kelley of vabenefitblog.com for this useful info.

1809 DARRICH DR, PARKVILLE, MD 21234

1809 DARRICH DR, PARKVILLE, MD 21234

FHA to Implement Policy Changes

Congress passed H.R. 5981 a few days ago. This bill allows FHA to change some policies and guideline in regards to issuing loans to home buyers. The main changes are as follows:

1. The upfrom mortgage insurance premium will be REDUCED from 2.25% to 1.0%. This is great news, right. Well hold on for a minute....

2. The monthly paid MIP rate which currently has a cap of .55% of the loan amount divided by 12 months, will now have a cap of up to 1.55%. This is where the impact come in.


Most home buyers using an FHA loan have little cash at hand. The typical buyer can come up with the required 3.5% downpayment and not much else. Usually the buyer asks the seller for "help" with their closing cost and right now the seller is allowed to "help" up to 6% of the purchase price. This may seem like a lot, but Maryland's fees and taxes for purchasing a home are some of the highest in the US. The upfront MIP is allowed to be rolled into the loan amount, so the buyer has never had to tackle this expense right out of their pocket with cash, it has always just increased their monthly payment marginally.

Now, however, the monthly MIP will be increasing the monthly payment for all buyers. These changes are set to effect FHA case numbers issued after September 7th, 2010. For an example of how this would effect a buyer, go to : http://www.allhomes4me.com/ and click on current real estate news.