VA Loan Basics

VA loans are becoming increasingly attractive home financing options for military borrowers faced with tough credit and down payment requirements. These flexible loans, which come with some significant financial benefits, are at an all-time high in terms of average loan amount and guaranty amount.

More than 740,000 military borrowers obtained a VA-backed loan in 2017, and the program’s growth is likely to continue in the year ahead. But as with any mortgage product, it can’t be all smiles and sunshine. Both VA loan pros and cons are a part of the game. Let’s take a step back and look at some of each.

If you haven’t gotten started on your VA home loan application, talk to Veterans United today. We’ll walk you through the process.

VA Loan Pros

Here are some of the major advantages of the VA home loan program:

  • No down payment: This is such a significant benefit. Qualified borrowers in most parts of the country can purchase homes worth up to $690,000 without making a down payment. FHA loans typically require a 3.5 percent minimum down payment, and for many conventional loans it’s a 5 percent minimum. On a $500,000 home purchase, that’s a $17,500 down payment for FHA and a $25,000 for conventional.
  • No private mortgage insurance (PMI): This is required for conventional borrowers who can’t put down at least 20 percent. FHA borrowers have a couple forms of mortgage insurance, one that’s paid up front at the time of purchase and another that’s paid monthly. PMI typically disappears once you have about 20 percent equity in your home. There is no PMI on a VA loan.
  • Higher allowable DTI ratio: Lenders will look at the ratio of your total monthly income to your total monthly expenses. The VA typically wants to see a debt-to-income ratio of 41 percent or less. That benchmark is higher than what you would see on conventional and even FHA loans. And it’s possible for qualified borrowers with a DTI ratio greater than 41 percent to still secure VA financing.
  • No prepayment penalty: You can pay off your VA loan early with no fear of getting hit with any prepayment penalties.
  • Refinance options: The VA home loan program has a pair of refinance loans that can help qualified buyers lower their monthly payments or get cash back from their equity. The Streamline refinance, also known as the Interest Rate Reduction Refinance Loan (IRRRL), is for homeowners with existing VA loans. The VA Cash-Out Refinance allows VA and non-VA homeowners to refinance and get cash at closing to pay down debt or take care of other needs.
  • Flexibility with bankruptcy and foreclosure: Some borrowers who qualify can be eligible for a VA home loan two years after a bankruptcy or foreclosure. The wait can be much longer for different loan types.

VA Loan Cons

Now here are some of the potential drawbacks of the VA loan:

  • VA Funding Fee: All VA loans come with a mandatory VA Funding Fee charged by the VA. This fee goes directly to the agency and helps keep the VA home loan program running for future generations. It’s a cost you can finance into the loan, and borrowers with service-connected disabilities are exempt from paying the fee. But this isn’t something you’ll pay on a conventional loan or FHA loan. You can learn more about how much the VA Funding Fee is, who pays what and who is eligible for a refund.
  • They’re intended for primary residences: This isn’t a loan program you can use to purchase a second home or an investment property.
  • Sellers aren’t always on board: Some home sellers aren’t open to receiving offers from VA borrowers. A lot of this undoubtedly has to do with some of the myths and misconceptions surrounding VA loans.

Move Over, Solar Panels! Home Wind Turbines Are the Latest Green Energy Source for Homeowners

Wind power is one of the most popular forms of renewable energy, and in some parts of the country, you can drive by huge fields of turbines with their fanlike blades. Home wind turbines, like solar panels, capture energy and help lower your electricity bill. But can this clean fuel source actually power your entire house? And if so, at what cost?

How do home wind turbines work?

If you’ve ever seen a wind farm, you already have a general idea of what the turbines look like when they’re operating. But how exactly do they work?

“They convert the kinetic energy in wind into mechanical power, which in turn is used to run a generator that makes electricity for the home,” says Dan DiClerico, a home expert at HomeAdvisor. The turbine’s long, narrow blades are aerodynamically designed to capture the maximum energy from the wind.

“As the blades rotate, they turn a shaft that is connected to a generator, which produces electricity that is delivered directly to the home,” he explains.

Are home wind turbines practical?

Residential wind turbines are a good option if you live in an area with consistent wind flow—but not gale-force winds, which would cause the National Weather Service to issue a wind advisory.

“Wind turbines operate within a range of wind speeds, below which they do not produce power and above which they will cut out to protect themselves from damage,” says Michael Ginsberg, author of “Harness It: Renewable Energy Technologies and Project Development Models Transforming the Grid.”

So, what’s a good wind speed range? Typically, 8 to 55 mph.

“The rated power output of the wind turbine is based on the rated speed, usually 25 mph to 35 mph,” Ginsberg says.

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Mortgage Rates Fall Back

Given the recent volatility of the ten-year Treasury yield, it’s not surprising that mortgage rates again have dropped. These low rates combined with high consumer confidence continue to drive home sales upward, a trend that is likely to endure as we enter spring.

How Much Home Insurance Do I Need? What Every Homeowner Should Know About Their Coverage

Have you ever wondered, “How much home insurance do I need?” Well, you might, especially when you’re faced with a lengthy list of policy options from your insurance agent. Do you really need all that coverage?

On average, at least 6% of homeowners make a claim to their home insurance company each year. This might not seem like many, but those claims are far from small. The Insurance Information Institute estimates that insurers paid out an average of $10,592 to homeowners last year, covering everything from fire and lightning damage to theft.

Choosing the right level of insurance is key—if you don’t buy enough, you’ll be out of pocket for any shortfall. Buy too much, and you’ll be paying for coverage you don’t need.

Here’s how to make sure your major costs are covered in case of an emergency, and why taking a close look at your policy can save you money and heartbreak down the road.

So really, how much home insurance do I need?

The goal of any home insurance policy is to ensure you’re covered in case of a total loss of your home, says Ralph DiBugnara, president of Home Qualified.

“This means if the home was destroyed, the policy will cover the cost to completely rebuild it to the exact condition of when it was insured,” DiBugnara explains.

If you have a mortgage on your home, your lender will likely require your coverage to equal 100% of the replacement cost of the home. And even if your home is paid off—or no requirement is in place—it’s still a good idea to buy enough coverage to cover complete replacement, DiBugnara says.

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What Is a Tankless Water Heater? The Key to Endless Hot Showers, but With a Catch

What is a tankless water heater? Also called “demand-type” or “instantaneous water heaters,” these devices deliver warm water only when you want it. Conventional water heaters, on the other hand, perpetually heat water whether you need it or not.

Traditional hot water tanks use electricity or gas to heat and store hot water until that magic moment you decide to take a shower or wash your dishes. As faucets dispense hot water, cold water refills the tank, and the heating process begins again.

If you use hot water faster than your tank can warm the water, you’ll find yourself feeling the side effects, in the form of a cold shower.

Tankless devices, on the other hand, heat water on the way to your faucet; as the name implies, there is no the storage tank. When you turn on the hot water tap, cold water flows into your tankless unit, which uses a much more intense electric current (or blast of gas) to quickly heat water on the way out your tap. Theoretically, the supply of hot water is unlimited.

Tankless water heaters, which can be as small as a suitcase, can produce hot water at the rate of 2 to 5 gallons per minute. If only one person is taking a shower, which requires a flow rate of about 1 to 2 GPM, then you’ll have a lovely, long-lasting hot spray.

Granted, a traditional hot water tank could also deliver the necessary 1 to 2 GPM for a long hot shower… but suppose you are taking a shower while someone is washing dishes (3 to 7 GPM), or your washer is cleaning a load of clothes (1.5 to 3 GPM). Add up all those GPM figures, and a regular heater falls short of your total hot water demand.

The solution is to either stagger hot water usage, install more than one hot water tank, or install a tankless water heater.

How much do tankless water heaters cost—and how much will they save you?

The U.S. Department of Energy says that if you use 41 gallons or less of hot water each day, tankless water heaters can be 24% to 34% more energy-efficient than conventional hot water storage tanks. If you use 86 gallons a day, the efficiency drops to 8% to 14%. The energy ratings institution Energy Star estimates a typical family can save $100 or more a year with a tankless water heater.

But here’s the rub: Tankless water heaters cost up to three times more than conventional heaters to buy and install. A whole-house tankless water heater costs $800 to $3,000, and installation—including upgrading electrical and gas pipe systems— can add $1,000 to $3,000 to those costs. As a result, it might take decades to recoup the cost of your energy-saving appliance.

On top of that, tankless water heaters can be expensive to maintain.

“I’m not a big fan,” says Tom Bigley, a Pittsburgh plumber for 36 years and director of plumbing services for the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry. “They are maintenance-intense and expensive to repair. With parts and a basic service call, you’re at $300 to $400. Is the money you’re saving on energy bills worth that?”

Bottom line: As is the case with most energy-saving appliances, you should carefully weigh the costs of a tankless water heater against the long-term savings to determine whether one’s right for you. If your current setup gives you enough hot water, you’re probably fine as is; but if you’re cringing every morning at the prospect of a cold shower, a tankless water heater could be worth its weight in gold.

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The Week’s Most Popular Home Is a Mansion That’s Never Been Lived In—and You Won’t Believe Why

An art-stuffed mansion in Illinois is this week’s most popular home on realtor.com®. And as if its 9,721 square feet of extreme opulence weren’t enough, the enormous residence comes complete with a shocking twist.

Built in 2002, the $2.9 million home has been used exclusively to house the owners’ extensive art collection—and has never been lived in. Two decades later, it’s like buying a brand-new home.

The odd backstory and colorful art in the home’s listing photos make the place extremely clickworthy. Loaded with paintings, sculptures, and objets d’art, the interiors look otherwise untouched since the home was built 18 years ago.

For a buyer interested in breaking into the art market, any of the art inside or outside the home is available for negotiation, separately from the purchase price.

Aside from the mansion-museum, other homes you clicked on this week included the lovingly restored Baywood mansion in Pittsburgh, a hulking Victorian sitting on the Mississippi River Delta, and the architecturally significant Goodkind residence in Minnesota—all antiques in search of new owners to usher them into the future.

As you ponder the logistics of purchasing a mansion simply to house your art collection, we ask you to cast aside those dreams for a few moments and scroll down to peruse all of this week’s popular homes…

Read the Rest Here homes HERE

What are digital signatures?

Digital signatures are like electronic “fingerprints.” In the form of a coded message, the digital signature securely associates a signer with a document in a recorded transaction. Digital signatures use a standard, accepted format, called Public Key Infrastructure (PKI), to provide the highest levels of security and universal acceptance. They are a specific signature technology implementation of electronic signature (eSignature).

What’s the difference between a digital signature and an electronic signature?

The broad category of electronic signatures (eSignatures) encompasses many types of electronic signatures. The category includes digital signatures, which are a specific technology implementation of electronic signatures. Both digital signatures and other eSignature solutions allow you to sign documents and authenticate the signer. However, there are differences in purpose, technical implementation, geographical use, and legal and cultural acceptance of digital signatures versus other types of eSignatures.

In particular, the use of digital signature technology for eSignatures varies significantly between countries that follow open, technology-neutral eSignature laws, including the United States, United Kingdom, Canada, and Australia, and those that follow tiered eSignature models that prefer locally defined standards that are based on digital signature technology, including many countries in the European Union, South America, and Asia. In addition, some industries also support specific standards that are based on digital signature technology.

How do digital signatures work?

Digital signatures, like handwritten signatures, are unique to each signer. Digital signature solution providers, such as DocuSign, follow a specific protocol, called PKI. PKI requires the provider to use a mathematical algorithm to generate two long numbers, called keys. One key is public, and one key is private.

When a signer electronically signs a document, the signature is created using the signer’s private key, which is always securely kept by the signer. The mathematical algorithm acts like a cipher, creating data matching the signed document, called a hash, and encrypting that data. The resulting encrypted data is the digital signature. The signature is also marked with the time that the document was signed. If the document changes after signing, the digital signature is invalidated.

As an example, Jane signs an agreement to sell a timeshare using her private key. The buyer receives the document. The buyer who receives the document also receives a copy of Jane’s public key. If the public key can’t decrypt the signature (via the cipher from which the keys were created), it means the signature isn’t Jane’s, or has been changed since it was signed. The signature is then considered invalid.

To protect the integrity of the signature, PKI requires that the keys be created, conducted, and saved in a secure manner, and often requires the services of a reliable Certificate Authority (CA). Digital signature providers, like DocuSign, meet PKI requirements for safe digital signing.