by California FHA Mortgage Loan Expert on August 1, 2010
Along with other great programs, the Department of Defense is trying to help veterans obtain affordable housing. Through the Basic Allowance for Housing, or BAH, program, veterans are guided in the direction towards affordable and less burdensome housing expenses.
How does BAH work?
BAH provides service members on permanent duty within the U.S. with suitable housing compensation when government quarters are not available, according to the DoD. The reimbursed amount is based on housing costs in the local area in which the service member lives. People on active duty overseas are eligible for Overseas Housing Allowance, or OHA.
The stipend awarded is also determined when looking at the military member’s duty location, pay grade and dependency status. Although the current BAH system allows for many service members to live without any out-of-pocket expenses, some costs may have to be covered. It depends on the housing market. Either way, a veteran and his or her family can save funds.
Sometimes BAH rates are subject to decrease. However, individual rate protection prevents the decrease of a BAH rate as long as the duty status of a service member remains the same. And when the new 2010 BAH rates go into effect, this protection assures that the service members’ out-of-pocket costs may be less but not more.
BAH Rates
As stated before, BAH rates an increase and decrease, but individuals are protected from losing allowances. People with dependents can get about $316 more than single persons. Persons without dependents receive what’s called Partial BAH. There’s also BAH II and BAH Diff for persons paying child support.
Buying a Home with BAH
The VA mortgage plan is a program that makes it possible for veterans to buy their dream home. The U.S. Department of Veteran Affairs secures the VA loan. With the BAH program, a veteran could use his or her allowances to pay monthly mortgage which with the VA program is less stressful than conventional loan mortgages. One of the biggest features of the VA plan is no down payment. So, veterans and their families do not have to come up with a large lump sum of money towards the purchase of their home. Talk with a VA loan specialist today and see how BAH funds could help you to purchase a home!
August 1, 2010
by California FHA Mortgage Loan Expert on July 15, 2010
Oh I love rules and guidelines. This is especially true when it comes to helping more people buy homes. We have mortgage guidelines, real estate home purchase guidelines, credit guidelines, debt guidelines, and a smattering of state and local jurisdiction guidelines. One guideline that many first time home buyers have trouble with is where their down payment can come from.
You may not know this, but one place where you can get your down payment from is your IRA – Individual Retirement Account. What’s even better about this is that you may be able to tap into this pool of money – if you are fortunate enough to have it – without penalty if you are a first time home buyer and meet certain requirements. If this is you, keep reading…
Back in 1997 the US Government enacted the Taxpayer Relief Act which made it possible under certain conditions to tap into a traditional IRA or a Roth IRA for the purpose of buying a first home without penalty. Safe to say, as of 2010, you have a lifetime cap of being able to withdraw up to $10,000 from your IRA as a first time buyer.
I’m not a qualified financial planner or tax preparer so I cannot specifically speak to your situation or tell you definitively what you may or may not qualify for as a first time home buyer with using your IRA for your down payment. But I will tell you, there is definite merit with checking into this program if you don’t have a whole lot of money in your checking account but your IRA does.
Oh, and another possibility…are you expecting to get some money from a parent or relative in the form of a gift for your down payment. If so, you may want to check out the rules about getting money as a gift from parents to put into your IRA. You may find that they can gift you money ahead of the time which would allow you to start or add to your IRA and possibly make some interest in your account while you wait. You never know – some parents have this thing inside them when it comes to helping their kids out with retirement.
July 15, 2010
by California FHA Mortgage Loan Expert on July 11, 2010
Interest rates on California jumbo loans are low. Not the lowest on record, but they are now at lows not seen since 2003. And for many people who have been “stuck” in their jumbo loan, now is the time to refinance that big loan and save on your monthly mortgage payment.
Courtsey WSJ
According to the WSJ:
Just a year ago, the average rate on a 30-year jumbo mortgage—a loan of more than $729,750 not backed by government-sponsored agencies Fannie Mae or Freddie Mac—was 6.86%, according to Greg McBride, a senior financial analyst at Bankrate.com. Now it is 5.48%—a rate that rivals those available during the height of the credit bonanza.
“In just the past couple of months, jumbo loans have really started to be competitively priced,” says Keith Gumbinger of HSH Associates, a publisher of consumer-loan information.
The recent low rates on jumbo loans has caused an uptick in refinancing activity – with some jumbo lenders reporting that jumbo refinancing up as much as 50% vs. what it was last year.
California Jumbo Loan Refinance: Big Savings?
Simple math tells you that the larger the loan balance of a jumbo loan, the more money each month can be saved when the interest rate is lowered. For bigger loan amounts, those monthly savings can easily add up to thousands of dollars A MONTH in savings. For example, a homeowner with a 30-year fixed-rate $800,000 mortgage at 6.86% pays $5,247 a month. If he were to refinance at 5%, his monthly payments would be reduced by $952.
Jumbo Lenders in California: Still Available
Many of the lenders who were loaning money on jumbo loans just a few years ago are no longer around. They have went broke, merged with another company or even gotten out of the jumbo lending market. When shopping for a lender, be sure to speak with at least a couple of lenders who specialize in helping people with their jumbo loan needs — each lender will have different guidelines and different interest rates – and by shopping for your jumbo loan, you will save thousands and get the best possible deal.
July 11, 2010
