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If you are a veteran stationed at Ft. Carson, Schriever, Peterson or the Air Force Academy in Colorado Springs Colorado or any other qualifying veteran trying to sell your home, a VA compromise sale may be a solution worth looking into.

If you’re not familiar with the term, a VA compromise sale is designed to assist veterans who need to sell, but face taking a loss due to a declining housing market.

A VA compromise sale is designed for veterans that have a VA mortgage and need to sell in the current market for various reasons. You might be moving overseas as a change of station or going through a divorce. Whatever the case, taking a loss on the sale of your home could be financially devastating.

Fortunately, you may qualify for a VA compromise sale.

How a VA Compromise Sale Works

The benefit to a veteran approved for a VA compromise sale is simple. The VA will pay the difference between what you owe and what you are able to sell your house for.

Rather than take the loss on your own and possibly lose your VA eligibility in the process, VA assists in redeeming your remaining balance after the sale.

How to Begin the VA Compromise Sale Process:

• Provide proof of your financial trouble and an explanation as to why you need to sell the home.

• Provide a VA appraisal to prove the market value of your home at the time of sale.

• Closing costs must be common and typical for a VA loan.

• No second liens are allowed. However, VA does say they will make an exception if the total is not significant.

Another important part of the approval process is that the VA compromise sale must cost the government less than if the property went through foreclosure.

So in essence, if the cost to foreclose on the home is greater than a VA compromise or "short sale" on home, then there is a greater chance of getting a VA compromise sale approved.

You may also be required to sign a promissory note if your VA loan originated before December 31, 1989. This would involve you entering into a payment plan to pay back a portion of the loss that VA is taking on your behalf. This sum would end up being less than what you would owe if you did not originally have a VA loan, and the payment plan itself is formulated around what you would reasonably be able to pay.

If you think you are eligible for a VA compromise sale, don’t hesitate to contact me for further information.

VA Home Loan FAQ | What Is A VA Compromise Sale was written by Rebekah Radice

 

 

 

 

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It has come to my attention that Social Media Edge has had only about 100,000 listeners because it is not widely understood what it is. When questioning a few people I trust who are not regularly listeners it was soon obvious they had no idea what the 3 year old podcast is about. 

When I stared naming some of the guests people were stumped at why they did not know and how they could have missed 3 years of some of the best social marketing training, for free, available in the world. In fact let me drop a few names: Laura Fitton author of Twitter for Dummies, Chris Brogan author of Trust Agents, Jay Baer author of Now Revolution, Shel Isreal author of Naked Conversations, Shane Gibson author of Guerrilla Social Media Marketing with Jay Conrad Levinson and the list goes on and on and on ...

It's my fault you don't know. I have never really posted here in Active Rain about what Social Media Edge Radio, the podcast, is all about. After three years it's probably time. So here is all you need to do.

 

• Subscribe to Smokin' Hot Social Media News at http://eepurl.com/bypV1
• "Like" our new Facebook page at http://facebook.com/socialmediaedgeradio (even if you like our old page you need to like the new one - the old one is no longer in use) thanks to Mike Mueller
• Save time on Tuesdays at noon eastern to listen live and get in the chatroom or listen later at iTunes

 

The short history of Social Media Edge

I founded the podcast in August of 2008 as "Twitter Tuesday". In December 2008 Jason Crouch joined me as a guest and I invited him back to co-host the show regularly. In March we switched to the name Social Media Edge (which belonged to my friend Brian Person) and we've had 100's of truly amazing guests since then. The list, in fact, is much too long to publish here but you can see all of their faces at the Facebook page.

In summer of 2009 I invited Mike Mueller to bring a regular tech report about some tip or trick with social media. For a while he hosted his own show on Monday's on our same JCKC network.

Our first big time regular listener AND show sponsor was Clint Miller of Real Estate Client Referrals.

Later I invited Jeremy Blanton to contribute as a community builder and he still does to this day.

For a while we also had Real Estate Round Table and Twitter Queens Radio with Maya Paveza (thehiproof.com), Diane Guercio and Lesley Lambert.

We have now had over 100,000 listens and most shows have listens in the 1000s. So, why haven't you subscribed and started listening? Should we call it a weekly live webinar featuring some of the very VERY top names in Social Media Marketing and Technology or can we just leave it as Social Media Edge?

Social Media Edge Radio - seriously true professionals who won't misguide you with some crap they made up to sell more books and seminars. Every Tuesday at Noon eastern.

REtechRadio - part of the REtech family. Great tech information and updates from people who have the answers, people who speak and product and service users.

Ken Cook - Community Outreach Leader Southeast Region (I make friends, handle social media, SEO/SEM/SMO that's my job :) - We do FHA, USDA, VA and Conventional Home Loans (678) 439-8683 NMLS ID 208452

My employer: AmericaHomeKey, Inc., 2300 Windy Ridge Parkway, 8th Floor North Tower - 840N, Atlanta, GA 30339. NMLS ID 102930. Georgia residential mortgage licensee 23191. Equal housing lender.

 

 

When shopping for a mortgage, one needs to know and understand their specific goals, and this should be done even before you start to look at a home or speak to a loan officer.  The reason being is because there are several ways of looking atzero points, in which some advertise with no points or no costs, and if you should pay points for your interest rate.

The first step is to have a list of  your short term and long term goals.  Not only should you know your goals, but your loan officer should be asking about your goals.

Below is what I consider to be the most important questions that should be asked in the first 5 to 10 minutes.

• What mortgage payment would you feel comfortable with. (not the max amount that you could be approved for)
• What are your goals, short term and long term.
• And I ask questions about their assets.  Ie. : checking account, 401-k, or if they could get a gift.

Having answers to these questions, I can formulate some game plans on how to utilize the borrower's assets to best help them out now and in the future. Keeping in mind that things do change later on in life, that we don't have crystal balls. I also make sure the borrower is aware of this.

I do want to point out one thing. There are some borrowers that just know what they want. Some will call up and say,  "I want Zero points" and or "those no cost loans". Just because the borrower says that they want this type of loan, doesn't mean that it fits their needs.  I love to explain, to educate, and to show in comparisons.

 

Here is an example of paying points or not paying points, aka no points or zero points.

In this example, there are $930 in standard lender closing costs.  You would be paying these out of pocket with the lower interest rate of 4.75%, so I included these fees in the total points.  With the higher rate, I am including the fees in the interest rate. This means that you are paying the lender fees in the rate and not extra monies at the closing table.  I could show you this example with the fees outside the rate, but I wanted to make a point on how to get the best bang for your buck.

As you can see, comparing basic apples to apples, it would take you 7.76 years to recoup the points just from the monthly savings. What some loan officers fail to show are the total savings from different categories. You need to look at :

• Your monthly savings
• Difference in principal remaining
• Tax write off on the points paid at closing
• Tax write off on the interest

.

Here are why goals are important. In my example below, let's say your goal is to live in the house for 5 years.  I am also using a tax bracket of 28 percent for income tax purposes.

Your real break even point after all the variables is 5 years.

Sometimes these scenarios are tough to show, because the interest rates have been ever changing. And because the spread between each 1/8 th of a percent is normally 3/8 th's of a point, but the interest rates have not been reflecting that in the last few weeks to a month. For example purposes, I am not going to get into the details. The main focus point should be that your loan officer should compare several scenarios on your behalf, making sure that you are using your money wisely.

 

Conclusion : Over the years, I have heard many rumors that paying points to lower your interest rate costs you more money, which is why some lenders talk you into a higher rate. Some times they can make more money on the back end.  If you have the money or can get a gift, know your goals, and have a very good idea on how long you will be in the house... as you can see, it pays off down the road.

 

Disclaimer - Everything mentioned above is of my opinion and knowledge with 18 + years experience in mortgage lending. Please consult your CPA or Tax Accountant.

Colleen Craig wrote this excellent post on no cost mortgages.  Myths on No Cost Loans - The bottom line is that every lender and or bank will get it from you one way or another. Hence why I prefer having the borrower pay points and no lender costs.

 

UPDATE : @ 6:47 pm - You need to read the whole post and the charts. On the surface, it looks like you break even in 7.76 years, but after reviewing all of the categories to look at, your actual break even point is 5 years... and that I am including the lender costs in the total scenario. I will say this.. if you went back about 6 months and longer, the breakeven point usually comes out to 3.5 to 4 years. Why?  Because some coupons for lower rates would be cheaper. But it's to expensive to drop to 4.625% right now. FYI..  

 

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- FHA Loans - USDA Loans - VA Loans -

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For more information on FHA loans, please go to this link. The FHA Expert

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!

 

For information about FHA myths & FHA rumors, please read : FHA Myths & Rumors

 

Copyright © 2011 by Jeff Belonger of Infinity Home Mortgage Company, Inc

 

Energy Efficient Mortgages aren't talked about much, which some might think they aren’t as good as a regular FHA loan. In my opinion, it’s because many loan officers and or lenders don’t know much about them. Yet there is no huge difference between the two. And one could easily associate an energy efficient mortgage with a FHA 203-k loan. But that would be a very bad assumption, because there isn’t much more to an energy efficient mortgage, known as an EEM loan, as opposed to the paperwork and understanding that goes into a 203-k loan.

Do you have high energy bills? Unless you are having a new home built that could be an energy efficient home, in many cases, the older home probably won’t be up to the current standards, which could cost you hundreds of dollars monthly. So how can you over come this problem? Very easily with an EEM loan.

Quick history about EEM’s -  Congress started a pilot program in 1992 demonstrating the use of energy efficient mortgages, known as EEM’s. (Energy Efficient Mortgages) EEM’s recognize that reducing utility expenses will allow a homeowner to pay a higher mortgage payment to cover the cost of the energy improvements that were financed into the mortgage. A main reason is because it offers homeowners who couldn’t initially afford the cost of these energy saving improvements out of pocket, giving them the chance to finance them. These loans can be both done when purchasing a new home or when refinancing. 

 

FHA has adopted this into their financing options which allows a borrower to :

• save money monthly
• incorporate the improvement costs into the mortgage
• these improvements are installed after the loan closes
• this program allows you to use normal FHA guidelines with FHA mortgages

 

How does the Energy Efficient Mortgage program work?

The maximum amount of the portion of the EEM for energy improvements is the lesser of 5% of:

• the value of the property
• 115% of the median area price of a single family dwelling
• 150% of the conforming Freddie Mac limit.

 

Eligibility Requirements

• Properties that are eligible are One to Four unit existing and new construction properties.
• Borrowers are approved through the normal FHA mortgage guidelines for obtaining a mortgage.
• The cost of the energy-efficient improvements that may be eligible for financing into the mortgage is the lesser of 5 percent of the property’s value, depending on 3 different equations. Please refer to these changes above.
• To be eligible for this mortgage, the energy efficient-improvements must be cost effective, meaning that the total cost of improvements is less than the total present value of the energy saved.
• The cost of the energy improvements and the energy savings must be determined by a home energy rating report which is done by a home energy rating system (HERS) or energy consultant. The HERS report usually costs from $250 to $350 and can be paid by the seller, the buyer, or sometimes included into the mortgage.
• The energy improvements are installed after the loan closes. The money is placed into an escrow account and is released once an inspection verifies the improvements are completed and that the savings will be achieved.
• Because of this program, the final loan amount can exceed the maximum mortgage limit by the amount of the energy-efficient improvements. Here is a list of the FHA max mortgage limits.

 

EXAMPLE :

 

 

 

 

 

 

 

 

 

***I am not using a particular credit score and all closing costs are the same for either loan example.***

As you can see, it’s not a huge savings, but it does add up. Just in 1 year you saved $1,135.20. And the cost of the energy improvements that were added onto your mortgage now become a tax write-off.

**** My examples in the cost of improvements and your monthly bills, will vary depending on several different factors, such as age of air conditioner or heating, lighting fixtures, etc, etc. And also depending on what you pay per month. I only used these figures as examples.****

 

Reminder : There are special and certain tax credits both nationally and locally. For tax purposes, there is a $1,500 tax credit until the end of the year. Not sure if the government is going to extend this. There are also state credits and sometimes credits given by your utility companies. Just be careful though, because sometimes you have to use those they recommend when doing the energy inspection report.

 

Realtors : If your referring mortgage partner or in-house lender doesn't educate you on this kind of mortgage, either ask questions or possibly seek someone that understands this type of financing and who is very creative.  An excellent loan officer is not always one that can close your loan or who calls back, but one who can do all of the above and provide excellent education and program scenarios. This will not only make happy buyers, but possibly provide more referrals. For more education and creative financing, please vist FHA loans & other mortgage options

 

Here is a link to a list of the past mortgagee letters for everything about Energy Efficient Mortgages.  FHA Energy Efficient Mortgages – Mortgagee Letters

 

Energy Efficient Mortgage Series

Energy Efficient Mortgages – EEM loans – Part 1 of 2 – FHA loans going ‘Green’

Energy Efficient Mortgages – EEM loans – Part 2 of 2 – VA loans going ‘Green’

 

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                                                                            FOLLOW ME ON FACEBOOK

 

 

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages - 

- Conventional Loans - 203 k loans -

- FHA Home Loans - Mortgages -

 

Experience & Knowledge at its BEST !!!

 

 

Follow me on:

 

_____________________________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!

For information about FHA myths & FHA rumors, please read : FHA Myths & Rumors

 

Copyright © 2010 by Jeff Belonger of Infinity Home Mortgage Company, Inc