Veterans Buy NOW, Refinance Later

Good competitive rate today, and you can get the house and pay less for it. And then when rates drop, you can come back VA has something. All right. Hey, and welcome back. And today we got Bob back with us the master of the loans. And today we're going to be focusing on the VA loan home buyers. We're talking about we're going to talk about some of the benefits of the VA and why if you are in the market today, why the VA might be the biggest advantage for you to get the VA loan today, or in the future, we'll see how that makes sense here a little bit. So Bob, thanks so much for coming back and recording with us. Yeah, thank you, Scotty, for having excited to be with the Gifford group. Yeah, appreciate that. So today, like, in this market, we have seen some rates are starting to creep back down. I think the Fed is, you know, talking about cutting those rates in the future. But like, if you're a veteran, and you are in the market to buy, like, I personally think it's one of the best loan programs around if you are a veteran, especially if you have any type of disability, right, because you can get that VA funding fee waived, which is a huge benefit. And if even with the VA funding fee having to pay a little bit of that, it's still a great loan program, because you can get that 0% down, right? Well, it's 0% down. And what a lot of people don't realize, a conventional loan, your credit score determines your interest rate. On a VA loan, if you have a 640 FICO, or 780 FICO, you get the same interest rate. On a conventional loan, if you have a 640 FICO versus a 780 FICO, it's a totally different because of all level price adjustments that Fannie Mae and Freddie Mac put based on credit score, the credit score in a VA loan does not affect that's one of the huge benefits. You mentioned the other one, it's zero down. And the fantastic part about this, thank you for all veterans. I love helping veterans. Thank you for serving our country. I hope that love to help them get into loans. And I learned about 20 years ago, the VA wants to put veterans in homes. So they're more lenient than FHA conventional, meaning you could have a high if you have a decent credit, I've been able to approve loans with a higher DTI debt to income on a VA that I could never get approved conventional or never get approved FHA. Because that goes back to the VA system, which is different. You go in there and they approve the loan. What part of the myth about VA loans are, they're harder to get, they're really easier to get. Some people, professionals in real estate also think that they're harder to appraise, and they're not harder to appraise and the loan doesn't take any longer to do. The only difference is, on VA, you order the appraisal through a VA portal, and a VA approved appraiser appraises a house. And a lot of people I know that have been doing real estate for decades think, oh, it's a harder appraisal. And no, it's not. It's no different than an appraiser walks in a house and sees a chandelier has been taken down and the electric wires are hanging down. An appraiser is going to note that. A VA or FHA appraiser is going to say that's a health and safety issue needs to be repaired. But they're not going to, I like to tell people, appraisers don't carry ladders. I've never seen an appraiser drive up to a house with a ladder strapped on the back of their Toyota Camry or they don't carry toolboxes. That's the difference between an inspector and an appraiser is important. All the time that I've been associated with the mortgage business, VA appraisals are easy. They're not a challenge. They don't come in undervalued. And here's my thoughts. Here's what I'm telling clients today. If you are in the market and you're a veteran and you don't have a home, especially if you're a first time homebuyer, take advantage of what the VA benefits have and buy a house. And you may say, well, I was waiting for rates to come down. My speculation, I'm not an expert. If I was, I wouldn't be on this podcast, I'd be on my boat in the Bahamas, you know, on a yacht, if I could predict exactly what's going to happen with interest rates. And I'm obviously, you see, I'm not. So it's just experience and speculation. But I believe that interest rates will come down. As soon as they start to come down, we're going to see exactly what happened when interest rates were lower, home prices were up. And I think you've seen as a professional real estate person, Scotty, haven't you seen a little bit more competition and home staying on the market longer and not selling as fast as they were two years ago? Yeah, definitely. With the rates being higher, we've seen home sitting longer. And you know, some some sellers are offering, you know, some concessions to help move their homes, right, which then people could use to apply to their closing cost and maybe either buy their rate down or to just bring their last cash to close, which has been more advantageous for the buyers right now in this market. So less competitive, you got to be your your credit being lower. I mean, that's a big advantage of the VA and then not really having this upper limits that are predefined on the DTI ratios or the debt to income ratios is our huge bonus for the VA buyers. And just cap all that off like being a homeowner. We know that's one of the well ways to build wealth in America, right? Because the home is an appreciating asset and a lot of unlike a lot of things Americans buy, which depreciate or don't have any value like furniture or cars, right, that will lose value pretty quickly after we buy them. So at least that's why I think the veteran VA is so big on pushing homeownership, right? Because they know it's good for the good for them. And good for America, right? So like, why not? So those are both great things are all three things that I think are really great about the VA loan. And I would add on, if you buy one now and you get a good view, you get a better rate than conventional VA rates are, our government rates are always lower. So you get a good, a good competitive rate today. And you can get the house and pay less for it. And then when rates drop, you can come back VA has something that is, it's called an EARL. And that's not EARL like your buddy EARL. It's a VA EARL I R R R L, which stands for interest rate reduction, refinance loan. I know it's the government, so they got to have everything spelled out that way. But a VA EARL is fantastic for a couple reasons. One is, it's got to be a benefit to the veteran. So if they get a home today in the 6% interest rates, and rates drop down to 5%, they can do a VA EARL and reduce their payment, reduce either the payment and or the months that they owe on the on the house, they can, we can do loans for any year, not just 30, not just on the 30 and 15. And all that we can do that a lot of during the refi, we'll do a lot of 23 year loans or 19 year loans, because they'll keep the payment the same, they just drop a ton of years, which saves them hundreds of thousands of dollars over interest over, if you say not 10 years off, but an EARL is non income qualifying. So you don't have to prove income. So it's truly a, it's a, a fast interest rate reduction loan, there's benefit to the veteran. And they've got, they got to have two things, we run a, a mortgage only credit report, and it just shows that they pay their mortgage on time. And if they do, and they have that, then they qualify for an EARL, which is an easy loan to do. So by the house now, where you don't pay 2550 $75,000 more for that house, and then refinance it in nine, seven months, VA loans, you have to hold the loan for seven months to be able to do a VA EARL. So 200, actually 210 days. So that's something to take into consideration. But that's what I'm recommending. Yeah, so like, and I'll try to get this video out as soon as possible. But realistically, like in today's market, where the houses are kind of sitting longer, you know, sellers are kind of more, they can't be as picky, right when a buyer comes along. So they have to kind of do with, you know, maybe the buyer has more of a little bit more power than before. And when we're in the seller's market, so maybe the buyer can negotiate, and we've helped buyers negotiate, you know, $10,000 in closing costs towards there. So they get less money out of pocket today. And VA is already have one of the lowest out of pockets costs already, but they can get most of that paid for by the seller. And then in a year or two, if rates do continue to go down, like we think they will be, then they can refinance. So they got the home today, the home continue to appreciate three to 4% on year, you know, we typically see. So now you're, you got the lower rate in the future, versus just sitting on the sidelines, and then waiting, and then prices continue to go up. And then you don't get that advantage, because everyone else jumps back in the market, because rates that drop, and now you're competing with everyone else again, right? Right. And, and a seller can give up to 4% seller contributions on a VA loan. So if you buy a $400,000 house, that's $16,000, we have zero down payment, 16,000 will pay most of your closing costs and prepaid. What prepaid are, as you know, are one year of insurance in your prepaying the taxes. So it's a great time not to think, well, wait till everybody's back in the market, because a couple years ago, it was definitely a seller's market. And right now, I would say it's kind of a buyer's market. But once rates go down, it's going to go back to a seller's market, because it's going to force what it's going to force people that have, you know, their first or second home, and they're thinking about a bigger home to have more kids, then they'll say, well, let me sell my house, and I'll buy a bigger house. And that's, that's the cycle that we go through. Yeah. And we, we were talking just we, you know, have a VA buyer that's buying right now. And we told them to like this kind of a stronger home for them, right? There's a couple with no kids right now. But eventually, they talk about having kids. And it's like, hey, you can, you can either refinance your conventional in that home in the future, if you want, or you could keep that loan, and then go use conventional on the next time you buy, because usually sometimes the second time, when you're buying the VA loan, you might not get those benefits, because you use your entitlement. And if you're not selling that home, your entitlement will stay with the property. But conventional, if you can save the 5% down, like you can use that right in the future if you want. So you can get into the first home, very little down, build the equity over, you know, the five, seven years while you're there, and then move up to the next house and then keep down as a rental, and we can wash most of that income away, or debts away with a rental property. So it's like, I like playing the real estate game. I'm a real estate guy myself. That's where I'm all in on. Like, and one more thing that I'll mention, I think we can wrap this video up if the people are still sticking around watching this is that if you are interested in getting the VA loan, you can check out the giftforgroup.com. We have a mortgage calculator, we have a buyer cost calculator where you can put in the VA and show that hey, you got zero down, what's your closing costs, give it a good estimate of what that would be. And then obviously, we can help you out doing the loan. And me and Amber can help you if you want to help you find that home here in Houston market area or anywhere in Williams, Texas. So, you know, one thing I want to add, which is really very important. It's the VA gives you a certain amount. It's called the Certificate of Eligibility. And I've done a lot of loans where somebody gets a VA loan, and they buy a $250,000 house, and they get it, and then they want to buy another VA loan. And if they have enough eligibility, they can buy they can have two the people don't realize you can have two VA loans. Now you can have a $750,000 first purchase and then try to buy another $900,000 house on a VA loan. So if you're buying a lower priced house, because it's your first house, there's a chance you could keep that as a VA loan converted to an investment property and buy another house with a VA loan if it is if you have enough eligibility. Yeah, it just depends on how much eligibility you have left on your on your COE. One other huge thing is for veterans, if they want to buy it used to be limited to, you know, a few years ago, it's 417,000. And then it went up to to the normal conventional limit, which is 750 plus 1000 right now. But I've done a lot of VA loans that are 1.4 million 1.2 million 900,000. You can go up, they passed that ruling a couple years ago. So somebody could buy a $1.4 million home on VA and no down. That is huge because they're in a jumbo, they'd be putting $280,000 down 20% on a $1.4 million house. So just want to throw that in. Also, yeah, I know that people that are buying their first $400,000 thinking about a 1.4 million. But the person who has a five or $600,000 house now, three more kids, they want a bigger house. And they're a veteran, they can use their veteran benefits to buy a jumbo home. Yeah, no, that's great point right there being Yeah, not having to worry about putting that 20% down on those over $800,000 homes right now is just gonna be saving tons of money cash, right, which then and I do think like, if it's a $800,000 house versus a $400,000 house, well, they're both kind of gonna appreciate the same rate, right? I mean, at the $800,000 house, you're gonna see a lot more wealth built in that home as it appreciates versus the, you know, the less expensive home. So plus they get VA pricing versus jumbo investor pricing. And I could go on for 15 or 20 minutes on that I won't, I'll just tell you, VA pricing is better than anything else you can get. Awesome. Oh, well, hey, let's let's do this, Bob. Let's, we'll end the video here on this one. And then we'll bring you back and we'll talk about VA loan assumptions, because I know that's kind of big right now with the market people are looking at. So check out the next video with Bob, and we'll talk about more about the VA loan assumptions. Sounds great. Thank you, Scotty. Thanks.