Help VA loan questions?!

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I messed up today. I offered $ 109,900 (0 down) and asked the vendor to $ 5,000 closing costs, including financing. We were given a loan rate of 6.375% of VA in the morning, but were then told that mortgage rates have made (not locked in yet). I have yet to assume a rate of 6.5%? We wanted to keep our premiums at about $ 750-775, $ 115 and we will assess taxes and insurance. Should I buy points to lower the rate? We only have a house plan for 5-7 years. If you can break things for me it would be nice. I try to do while my husband is in Iraq, and my head is spinning! (I’m almost hoping he does not accept the offer!)

  1. Reply
    April 29, 2011 at 11:30 pm

    Well for starters- you asked the seller to pay $ 5000 in closing costs! I doubt they will accept that unless they are desperate. The person you really need to be directing these questions to is your loan officer. They can explain it all. And ask why they didn’t lock in a rate already. We are closing in 3 weeks and our rate is locked already.

  2. Reply
    April 29, 2011 at 11:36 pm

    VA home loans are a unique way of extending support to the US war veterans, who committed their lives in safeguarding the interests of the country. Therefore, understanding these loans is beneficial. VA housing loan program provides financial assistance to veterans so that they can purchase home at a favorable rate of interest and convenient loan terms. Loans provided by the VA are fixedproperty in a safe locality. Next, the veteran has to go to a lender and apply for a home loan. VA guaranteed loans are provided by private lenders that include banks, mortgage companies and savings and loan associations. No prepayment penalties and long amortization terms are another advantage of these loans.

  3. Reply
    April 29, 2011 at 11:41 pm

    1st of all, even if the person accepts the offer, you can still back out. You have pretty standard contingencies in most purchase contracts.

    So if you’re really nervous, back out.

    Secondly, until you lock a rate, yes they can flucuate.

    You can also regegotiate an accepted offer and offer less.

    This is why you should have a good agent who knows this stuff.

    Just curious, why don’t you have a new rate? If your broker told you rates went up then they would have to know where they went up to.

    If you pay discount points you have to look at the difference in your payment and see how long it take to break even.

    For example: If by buying down your rate yo saved $ 30 per month, then $ 30 per month x 12 months= $ 360 per year in savings. If you paid 1 discount point or 1% of $ 109K then you would be paying $ 1090 up front. $ 1090 divided by $ 360 equals 3.03 years to break even. So in this simple theoretical example the answer would be yes if you plan on staying longer than 3 years, but you would need to plug in your actual numbers.

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