Using a Texas Vet loan to buy a San Antonio house?

A home purchase is likely the biggest transaction you will ever make and picking the wrong lender can cost you big. If you are a Texas Veteran you are most likely eligible for a Texas Vet loan. A Texas Vet loan is a great option because the interest rate is not contingent on your credit score and you still get all the benefits of a traditional VA loan. If you are VA Eligible that you should strongly consider using Texas Vet loan to buy a San Antonio House. If you Qualify for a VA Loan and are a Texas Vet than you will almost certainly be eligible for a Texas Vet loan. Qualifying is easy, you can qualify with a short period of active duty or with six years of reserve duty. 

 

 

Not all loans are created equally, know what your VA financing options are before you commit.

 

I personally used a Tex Vet loan to purchase our home and we got an interest rate a full 1% below what we could have gotten with a VA or Conventional loan. The great thing about using a Tex Vet loan is that you get the lowest possible interest rate regardless of your credit score. All you have to do is qualify and you automatically get the lowest possible rate. You will also avoid the mortgage insurance that comes with Conventional and FHA financing. If you are planning on using a VA loan but don't have 20% down and stellar credit score than you should strongly consider trying to get a Tex Vet loan. 

 

 

If you are thinking of using a VA loan you will hear the term funding fee thrown around. This is the fee that you pay to use a VA loan however it is typically waived if you have a disability rating from the VA. A Texas Vet Loan has a slightly higher funding fee than a traditional VA loan, but in many cases it is more than made up for by the reduction in the interest rate that you receive. 

 

I had a client that wanted to use a VA loan but she went with an online lender that is based out-of-state. The out-of-state lender while licensed to do business in Texas did not offer her the option of using a Texas Vet loan. They approved her for a traditional VA loan which had an interest rate 0.75% higher than what she could have gotten with a Tex Vet loan. This is not to say that all online lenders are not going to offer state specific loans but this is where it pays to know your stuff. At the end of the day you and your real estate agent need to advocate for your interest. With Internet-based lenders you will never meet in person and most of your communication will likely be electronic. There is no personal touch with this, for me when I am making the biggest purchase of my life I want to be able to do business face to face. 

 

 

Whatever your communication preference whether face to face or electronic it pays to fact check what your’e being told. Know your options before you make a decision, at the very least if you do go with an online lender sit down with someone local and get a second opinion. It is not going to cost you anything and it could potentially save you big money in the long run. 

New cars and the true cost.

I am sure you have all heard of sticker shock in relationship to any given item. I experienced a bit of sticker shock today when I saw the statistic that Americans have over 1 Trillion dollars of car debt. You read that correctly, Trillion with a T. In a society where debt is passed out like candy, think about these two things before you take your next credit plunge: Face the reality of what we need vs what we want and face the truth of what will happen if you by a cheap used car and pay cash.

• To start with you need to face reality and consider the cost of buying things like a new car that will lose 11% of its value the moment you drive it off the lot. Ask yourself WHY, why do I really need a new car. The key word there is need, we have very few things in America that are truly a "need". We need food and water to live, we want a new car and nice things. So I ask again why do you NEED a new car and how much is it really going to cost you? 

• There are few things that depreciate faster than cars yet people continue to spend massive amounts of money on them. Now don't get me wrong, I like having a nice car as much as the next person and there is something to be said about reliable transportation. I have been there I paid $22,000 for my last car and sold it for $7,000 after I paid it off. It was the worst investment I have ever made. I now drive an 8 year old truck that I paid cash for, it is clean and reliable which is all anyone really needs in a vehicle. 

• There is a psychological side to having a nice car. Society has conditioned us that having a nice car is equated with success. Just stop and think about that for a second, you paid 20, 30 or 40 thousand dollars for a car. A car that you could not afford to buy so you financed it for five to seven years. This is a sign of a successful person in America today and one that millions of people buy into.  

Call a car what it is. Plain and simple, a car is a tool and like anything else it is there for a purpose. A car is nothing more than a method of getting us from point A to point B, nothing more nothing less. A car doesn’t better your quality of life, it doesn’t improve your health and it doesn’t make you more successful (no matter what society says). So break the cycle, if you have a car payment throw a little extra every month and pay it off. Drive it till it becomes more expensive to fix than to keep. When it does become more expensive to fix than to get rid of pay cash for your next car. It may not be the nicest car in your friend group but it will likely be one of the few paid for cars amongst you all. 

How to get a home with bad credit!

There is so much stress put on the credit score and what that means to your ability to qualify for a mortgage. Some people believe they can't buy without a particular credit score. There are three things to think about when considering whether your credit score will qualify you for a mortgage. What is the industry standard for a credit score, what is my bad score due to and what to do if I have a bad score due to lack of credit history.

• Firstly, what is the industry standard when it comes to a mortgage worthy credit score? The industry standard for a typical credit score is 640 or better. However, this number changes based off the type of loan you are trying to qualify for as well as the individual lenders. What this score means is that you are or are not worth the risk that the bank is going to be taking by giving you a mortgage.

• The second thing to consider is why your credit score is bad? Is it due to a lack of history or a history of late payments, missed payments and/or collections? If your score is low due to negative marks against your credit then, you will need to get it above the mark for the loan your trying to get. There are simple things to do if you're trying to get your score up, such as paying your credit cards down to below 50% of the available balance. If your balance is zero and stays zero, it doesn't improve your score, so put a tank of gas or charge something small every month. Don't immediately pay it off though, wait till you get your bill then pay it off and keep doing this every month.

• Finally, we come to the hidden gem of this post, what to do if your score is due to a lack of history. There is a process designed specifically for this situation, which is called Manual underwriting. It is likely a term that you have never heard of but it simply means that your ability to get a mortgage will be determined by a person. They will manually screen you on a list of factors; other than credit score. This means coming up with at least four alternatives to prove your worthiness. These options can include something as simple as a history of paying your rent on time. If you have an electric bill, water bill, phone bill or insurance bills and can prove that you have paid them on time for a period of 12 months, then they may qualify as substitutes. It is likely to be a more time-consuming process than merely getting qualified off of a credit score however, it is still a very viable possibility.

Michael Mershon REALTOR