About Tacoma's Puyallup

VA Guaranty Calculation Examples

The following examples illustrate some common situations involving VA-guaranteed loans. They are by no means comprehensive. Due to variations in the amount of entitlement available to an individual veteran, loan limits for individual counties, and purchase prices for homes, situations may arise which are not covered here. Lenders are encouraged to contact the appropriate VA Regional Loan Center prior to closing a loan if there are questions about the VA guaranty calculation.

Example 1

Veteran has full entitlement available and is purchasing a home for $300,000 where the county loan limit is $417,000.

$417,000 X 25% = $104,250 Maximum Guaranty and Available Entitlement

$300,000 X 25% = $75,000 Guaranty and Down Payment Combination Required

Since VA's guaranty is limited to the lesser of 25% of the county loan limit or 25% of the loan amount, VA will guaranty $75,000 on Veteran's $300,000 loan in this county. A down payment should not be required.

Example 2

Veteran has used $48,000 of entitlement on a prior loan, which may not be restored, and is purchasing a home for $320,000 where the county loan limit is $625,000.

$625,000 X 25% = $156,250 Maximum Guaranty

$156,250 - $48,000 = $108,250 Entitlement Available

$108,250 X 4 = $433,000 Maximum Loan Amount with 25% Guaranty

Since the proposed loan amount will be less than $433,000, the lender will receive 25% VA Guaranty on the loan of $320,000. A down payment should not be required.

Example 3

Veteran has used $104,250 of entitlement on a prior loan, which may not be restored, and is purchasing a home for $380,000 where the county loan limit is $815,000.

$815,000 X 25% = $203,750 Maximum Guaranty

$203,750 - $104,250 = $99,500 Entitlement Available

$99,500 X 4 = $398,000 Maximum Loan Amount with 25% Guaranty

Since the proposed loan amount will be less than $398,000, the lender will receive 25% VA Guaranty on the loan of $380,000. A down payment should not be required.

Example 4

Veteran has full entitlement available and is purchasing a home for $480,000 where the county loan limit is $417,000.

$417,000 X 25% = $104,250 Maximum Guaranty and Entitlement Available

$104,250 / $480,000 = 21.72% Guaranty

Since VA's Guaranty will be less than 25%, a down payment will likely be required to meet investor requirements.

$480,000 X 25% = $120,000

$120,000 - $104,250 = $15,750 Down Payment

Example 5

Veteran has used $27,500 of entitlement on a prior loan, which may not be restored, and is purchasing a home for $320,000 where the county loan limit is $417,000.

$417,000 X 25% = $104,250 Maximum Guaranty

$104,250 - $27,500 = $76,750 Entitlement Available

$76,750 / $320,000 = 23.98% Guaranty

$76,750 X 4 = $307,000 Maximum Loan Amount with 25% Guaranty

Since VA's Guaranty will be less than 25%, a down payment will likely be required to meet investor requirements.

$320,000 X 25% = $80,000

$80,000 - $76,750 = $3,250 Down Payment

Example 6

Veteran has used $36,000 of entitlement on a prior loan, which may not be restored, and is purchasing a home for $120,000 where the county loan limit is $417,000.

Since the loan amount will not be over $144,000, the veteran's additional entitlement cannot be used. Therefore, the guaranty would be 0%: $0 / $120,000

Example 7

Veteran has full entitlement available and is purchasing a home for $800,000 where the county loan limit is $729,750.

$729,750 X 25% = $182,437.50 Maximum Guaranty and Entitlement Available

$182,437.50 / $800,000 = 22.81% Guaranty

$800,000 X 25% = $200,000 Guaranty and Down Payment Combination Required

$200,000 - $182,437.50 = $17,562.50 Down Payment

All Tech Mortgage Inc. is your gateway to great mortgage products from Washington State's top mortgage lenders. Locally based in Tacoma, we shop, compare rates & fees and connect you with the best mortgage lenders in the Northwest. The interest rates we quote are typically .25% - .50% lower than most national mortgage companies. Plus our fees are some of the lowest in the industry.

We Specialize in No Cost and Low Closing Cost Purchase & Refinance Home Loans. All Tech Mortgage offers true wholesale pricing from our lending partners. At All Tech Mortgage, we never expect your business, but hope to earn it with our aggressive pricing, speed, and overall efficiency.

visit us online at www.VALoansTacoma.com

The Federal Reserve's plan to lower interest rates is working...

With interest rates again below 5.00% and lenders getting backed up, I thought I would pass along a few tips to make the refinance process a little less stressful.

1. Get an accurate balance of any mortgage liens on your property- 1st, 2nd mortgage's or HELOC's, or other items you may have purchased that are liens on your property ie. new windows, furnace. If you plan to keep your HELOC (home equity line of credit) open, contact that lender and ask for their "subordination requirements" and get a contact number for that department.

2. Pull together all the necessary items you may need in order to speed up the application process:
A. 2008 & 2007 W2 Forms
B. Paystubs - Covering a 30 day period'
C. 1-2 Months bank statements - all pages
D. 1-2 Months stock, retirement or other asset account
F. 2007 tax return if self employed, you have investment property, or commission income
G. Name & Phone number of your homeowners insurance agent
H. Copies of your current mortgage statements - helps the escrow or title company order your payoff statement.

3. Be available for the appraisal appointment as soon as the appraiser can come out. - Otherwise they may not be back in your area for a few days.

4. Plan to spend 5-15 minutes on the phone asking questions about the process, timing, and other factors involved in refinancing your home.

Another thing to remember, Not everyone can benefit by refinancing!

There has to be a clear benefit before you should consider refinancing. If you would like a second opinion on refinancing and have already selected another lender, feel free to use us as a second set of "eyes" to make sure your getting the right loan for you're particular situation. My direct number is (253) 472-1500 ask for Kevin

Tacoma, WA - Mortgage Rates

Interest rates for home loans under $506,000 in Pierce, King and Snohomish counties continued their trend under 5.00% for the second straight week. We are starting to see a lot of refinance activity, especially those with equity and good credit scores. What some people don't realize is that there are several factors that determine the final interest rate they will pay on a mortgage. Gone are the days you can call and just ask "What's Your Rate?" Here is a brief list of all the factors that can increase or decrease the interest rate you will pay on a mortgage or home loan:

1. Credit Score -Your most important score is the middle score. For example if you have a high score of 759, a mid score of 739, and a low score of 702, the 739 becomes your "decision score" The next step is to look at which bureau is reporting your mid score. If you notice any errors or discrepancies from that bureau, for $30.00 you can request a "rapid re-score" If you can get your mid score up by just 1 point, it could save you $1,000 in fees on a $400,000 cash out refinance loan. Not a bad investment...

2. Loan To Value Ratio (LTV) -This is the amount of your new loan divided by the value of your home. Anything below 60%LTV is usually golden. Once you go above 60%, then the interest rate depends on the next factor - Purchase or Refinance.

3. Purchase or Refinance - The interest rates for refinance and purchase home loans can be different depending on factors 1 & 2. As a general rule, purchase home loans have less factors that determine the final interest rate.

4. Refinance - Rate Term vs Cash Back - This factor applies to refinancing when you are paying off any debt other than the underlying first mortgage. Once you start paying other debt with the exception of a purchase money second mortgage, your interest rate quote will likely go up. This includes things like HELOC's, credit cards, car loans and other personal debt. Plus there are several new rules coming Jan 1, 2009 that limit your ability to do a rate term refinance if the previous loan you just closed was a cash out refinance. The new rules require you to wait 6 months before your eligible to refinance again. Also if you home was listed for sale on the MLS, certain rules require you to wait 6 months before you can refinance.

5. Loan Amount - Loans under $417,000 generally have the lowest interest rates. Although the new High Balance loans up to $506,000, with low loan to values under 75% LTV, and a high credit score will qualify for the lowest interest rates.

6. Subordinate Liens - If you plan on keeping your current Home Equity Line of Credit open and having your lender subordinate their lien, in some instances your interest rate may be higher.

7. Paying Property Tax & Insurance - If you plan on paying your own property tax and insurance, most lenders will charge an extra .25% fee to do so. That's $750.00 on a $300,000 loan.

All Tech Mortgage Inc. is your gateway to great mortgage products from Washington State's top mortgage lenders. We shop, compare rates & fees and connect you with the best mortgage banks in the Northwest. The interest rates we quote are typically .25% - .50% lower than most national mortgage companies. Plus our fees are some of the lowest in the industry.

We specialize in No Cost and Low Closing Cost Refinance home loans. All Tech Mortgage offers true wholesale pricing from our lending partners. At All Tech Mortgage, we never expect your business, but hope to earn it with our aggressive pricing, speed, and overall efficiency.

Good news for home buyers or borrowers looking to take advantage of today's low interest rates. This puts mortgage rates at historic lows. Here's a sample of a recent rate quote from All Tech Mortgage this morning: 12/10/2008

Refinance: Paying off the existing first mortgage

Value of home: 350,000

Loan Amount: 280,000 Current Rate 6.25%

Loan Type: Conventional

Fico Score: 746

Rate Quoted: 4.875% 30 day lock (4.984% apr)

Loan Fee: 1% + 3rd party closing costs or 5.25% with 0 loan fee with 3rd party costs

Monthly Payment Savings: $212.00

Rates fluctuate daily so if you are considering refinancing or buying a new home -- The time to lock in and Save is Now!

For high loan balances up to 75% LTV with credit scores + 740, Paying off the existing first mortgage only, the above scanerio will work with loan amounts up to $506,000.

Serving Northwest Homeowners since 1996 WA Mortgage License: 510-MB-18885