VA and Things

[Hanshi]

So after all of these years and owning several homes I find out I'm eligible for VA Financing. I was a Reservist who served with a Honorable Discharge and it never occurred to me.

 

I have been in my house for 13 years and it's way too big plus the stairs are a killer so a downsize would be nice. I'm on a Modification at 2% for then 3% until it tops at 4% and then some fine print.

 

I was thinking of renting out the house and buying a small condo.

 

Are there any downsides to using a VA loan?

 

When I tried to find info on scoring it was vague?

 

What type of info is required for showing the house is rented?

[DBleynis]

The condo building would have to be approved by the VA prior to closing and there are a few hoops to jump through to get the building approved. If the building is already approved, it will save you dome effort.

 

To signify that your departing residence will be a rental, you will have to provide a lease, copy of security deposit check and first month payment from your tenant as well as your bank statement showing funds were deposited.

 

Its tricky but not impossible, EDITED TO REMOVE SOLICITATION

 

 

Best Regards,

 

Dmitriy Bleynis

[VAloanMaster]

So after all of these years and owning several homes I find out I'm eligible for VA Financing. I was a Reservist who served with a Honorable Discharge and it never occurred to me.

 

I have been in my house for 13 years and it's way too big plus the stairs are a killer so a downsize would be nice. I'm on a Modification at 2% for then 3% until it tops at 4% and then some fine print.

 

I was thinking of renting out the house and buying a small condo.

 

Are there any downsides to using a VA loan?

 

When I tried to find info on scoring it was vague?

 

What type of info is required for showing the house is rented?

 

Hi Hanshi,

 

No, there are no downsides to using a VA loan.

VA doesn't have a minimum credit score requirement so it's up to the lenders to set what scores they're comfortable with. Some will go down to a 580 while others will only go down to a 620.

If you want to keep your current home & rent it out you'll need to provide a lease agreement for at least 1 year as well as a copy of the cancelled check for 1st & security deposit.

I would steer clear of condos if at all possible for multiple reasons but you can use your VA eligibility to buy one as long as it's VA approved.

[cv91915]

 

So after all of these years and owning several homes I find out I'm eligible for VA Financing. I was a Reservist who served with a Honorable Discharge and it never occurred to me.

 

I have been in my house for 13 years and it's way too big plus the stairs are a killer so a downsize would be nice. I'm on a Modification at 2% for then 3% until it tops at 4% and then some fine print.

 

I was thinking of renting out the house and buying a small condo.

 

Are there any downsides to using a VA loan?

 

When I tried to find info on scoring it was vague?

 

What type of info is required for showing the house is rented?

 

Hi Hanshi,

 

No, there are no downsides to using a VA loan.

VA doesn't have a minimum credit score requirement so it's up to the lenders to set what scores they're comfortable with. Some will go down to a 580 while others will only go down to a 620.

If you want to keep your current home & rent it out you'll need to provide a lease agreement for at least 1 year as well as a copy of the cancelled check for 1st & security deposit.

I would steer clear of condos if at all possible for multiple reasons but you can use your VA eligibility to buy one as long as it's VA approved.

 

 

There are downsides to everything.

 

Some downsides to a VA loan:

 

1 - Some sellers won't deal with a buyer who is using a VA loan for the purchase. A VA loan can be a dealbreaker in a competitive housing market.

 

2 - Unless the applicant is exempt, VA loans have funding fees, which can be significant. Up to 3%+ of the loan amount.

 

3 - They can take a long time to close. See #1.

Edited January 20, 2018 by cv91915

[VAloanMaster]

 

 

So after all of these years and owning several homes I find out I'm eligible for VA Financing. I was a Reservist who served with a Honorable Discharge and it never occurred to me.

 

I have been in my house for 13 years and it's way too big plus the stairs are a killer so a downsize would be nice. I'm on a Modification at 2% for then 3% until it tops at 4% and then some fine print.

 

I was thinking of renting out the house and buying a small condo.

 

Are there any downsides to using a VA loan?

 

When I tried to find info on scoring it was vague?

 

What type of info is required for showing the house is rented?

 

Hi Hanshi,

 

No, there are no downsides to using a VA loan.

VA doesn't have a minimum credit score requirement so it's up to the lenders to set what scores they're comfortable with. Some will go down to a 580 while others will only go down to a 620.

If you want to keep your current home & rent it out you'll need to provide a lease agreement for at least 1 year as well as a copy of the cancelled check for 1st & security deposit.

I would steer clear of condos if at all possible for multiple reasons but you can use your VA eligibility to buy one as long as it's VA approved.

 

 

There are downsides to everything.

 

Some downsides to a VA loan:

 

1 - Some sellers won't deal with a buyer who is using a VA loan for the purchase. A VA loan can be a dealbreaker in a competitive housing market.

 

2 - Unless the applicant is exempt, VA loans have funding fees, which can be significant. Up to 3%+ of the loan amount.

 

3 - They can take a long time to close. See #1.

 

 

1) That's not the sellers, it's their uneducated agents that are driving that bus. In a hot housing market, Cash is first followed by conventional & then VA or FHA so unless you have enough cash to buy outright all of the other options are secondary.

2) The funding fee is a small price to pay considering the fact that you're putting no money down, you don't pay monthly MI & you're still getting some of the lowest interest rates available.

3) VA loans don't take any more time to close than any other loan.

[cv91915]

 

 

 

So after all of these years and owning several homes I find out I'm eligible for VA Financing. I was a Reservist who served with a Honorable Discharge and it never occurred to me.

 

I have been in my house for 13 years and it's way too big plus the stairs are a killer so a downsize would be nice. I'm on a Modification at 2% for then 3% until it tops at 4% and then some fine print.

 

I was thinking of renting out the house and buying a small condo.

 

Are there any downsides to using a VA loan?

 

When I tried to find info on scoring it was vague?

 

What type of info is required for showing the house is rented?

 

Hi Hanshi,

 

No, there are no downsides to using a VA loan.

VA doesn't have a minimum credit score requirement so it's up to the lenders to set what scores they're comfortable with. Some will go down to a 580 while others will only go down to a 620.

If you want to keep your current home & rent it out you'll need to provide a lease agreement for at least 1 year as well as a copy of the cancelled check for 1st & security deposit.

I would steer clear of condos if at all possible for multiple reasons but you can use your VA eligibility to buy one as long as it's VA approved.

 

 

There are downsides to everything.

 

Some downsides to a VA loan:

 

1 - Some sellers won't deal with a buyer who is using a VA loan for the purchase. A VA loan can be a dealbreaker in a competitive housing market.

 

2 - Unless the applicant is exempt, VA loans have funding fees, which can be significant. Up to 3%+ of the loan amount.

 

3 - They can take a long time to close. See #1.

 

 

1) That's not the sellers, it's their uneducated agents that are driving that bus. In a hot housing market, Cash is first followed by conventional & then VA or FHA so unless you have enough cash to buy outright all of the other options are secondary.

2) The funding fee is a small price to pay considering the fact that you're putting no money down, you don't pay monthly MI & you're still getting some of the lowest interest rates available.

3) VA loans don't take any more time to close than any other loan.

 

 

So third place out of four options is a strong position for a buyer in a competitive market?

 

And if it isn't the length of time required to close, what is the reason that VA financing is in the bottom half of desirable options to a seller?

 

A seller 's agent just wants to close with the fewest hassles so s/he can take the commission check to the bank. S/he wouldn't care if the buyer pays with old Diet Pepsi cans and pocket lint as long as the closing goes quickly and smoothly.

[Hanshi]

Thanks everyone for the replies.

 

I was wondering why the dislike for condos?

 

Me I'm disabled and need something smaller and no upkeep also cheaper in the utilities. The house I'm going to rent out is 3500sqft and because of a loan modification has a cheapish mortgage. Uhhgh as long as it's rented but it was included in a BK with no reaffirmation so I'm not worried.

[LoanChic]

Hit man, are you a loan officer? I close about 60-70 VA loans a year and your advice to OP is misleading and inaccurate.

 

I have closed many, many VA loans in as little as 21 days--contract to close. There is nothing in the VA loan process that makes it any longer to close than a conventional loan, especially if someone is working with a loan officer experienced with VA loans.

 

The funding fee for the first-time use of a veteran's eligibility (OP has never had a VA loan) is 2.15% of the loan amount, which can be financed in the loan. If you have 5% to put down, your funding fee will be reduced to 1.5% and if you have 10% or better to put down, your FF will be 1.25%. Any subsequent VA loan would carry a 3.3% FF.

 

With VA rates being typically a half percent or more lower than conventional rates, the borrower is far better off with a VA loan if he plans to be in the home long term. And as another poster mentioned, there is no pmi on a VA loan. IMO, it's the best loan program available.

 

In my market--and it's a hot one--VA loans are more than welcome. The only reason a seller might not accept a VA offer is if they are selling their house "as is." VA has more stringent requirements for the condition of the home than conventional loans, which is to protect the veteran. So if a seller won't take a VA offer, it's likely the house needs repairs the seller isn't willing to make.

 

Hanshi, condos are considered riskier properties for a lender. It is challenging to get one approved by VA and that can indeed be a lengthy process. If you really want to purchase a condo, look for one that is already VA approved. You can search here: https://vip.vba.va.gov/portal/VBAH/VBAHome/condopudsearch. And check with your lender because rates for condos are usually a little bit higher. You might be better off looking for a townhouse, which is treated in underwriting just like a single family residence.

 

Best of luck to you!

Edited February 23, 2018 by LoanChic

[cv91915]

Hit man, are you a loan officer? I close about 60-70 VA loans a year and your advice to OP is misleading and inaccurate.

 

I have closed many, many VA loans in as little as 21 days--contract to close. There is nothing in the VA loan process that makes it any longer to close than a conventional loan, especially if someone is working with a loan officer experienced with VA loans.

 

The funding fee for the first-time use of a veteran's eligibility (OP has never had a VA loan) is 2.15% of the loan amount, which can be financed in the loan. If you have 5% to put down, your funding fee will be reduced to 1.5% and if you have 10% or better to put down, your FF will be 1.25%. Any subsequent VA loan would carry a 3.3% FF.

 

With VA rates being typically a half percent or more lower than conventional rates, the borrower is far better off with a VA loan if he plans to be in the home long term. And as another poster mentioned, there is no pmi on a VA loan. IMO, it's the best loan program available.

 

In my market--and it's a hot one--VA loans are more than welcome. The only reason a seller might not accept a VA offer is if they are selling their house "as is." VA has more stringent requirements for the condition of the home than conventional loans, which is to protect the veteran. So if a seller won't take a VA offer, it's likely the house needs repairs the seller isn't willing to make.

 

 

The way mortgage pricing works it would be expected with any type of loan that paying 1.25%-3.3% of the loan amount upfront would get you a lower interest rate compared to paying no "points" (whether it's called points or a funding fee). That's not exactly a unique feature in mortgage financing.

 

 

I didn't give OP any advice. I listed some factors to consider. There are no blanket statements that apply to everyone's individual circumstances, which is why I said "some sellers" and "can take a long time."

• It can be harder to find an appraiser, and the appraisal process can take longer to complete.
• The appraiser may decide that in order to protect his license and continue to be eligible to do appraisals for the VA that additional inspections are required, which adds time to the process.
• Condos may take significantly longer with VA for the reasons you outlined.

Let's give OP a full set of facts and let him decide. Your best-case-scenario examples help, but they need to be counterbalanced with the rest of story.

 

I also firmly believe that putting people who have almost no savings into a home isn't always doing them a favor. There are risks involved that must be weighed carefully. But too many people just want to buy a house, and it's not very hard to find someone who will sell them a product and earn a commission to get it done.

 

It's not that different from walking into a car dealership $8,000 upside down on your current vehicle, and walking out two hours later with a new car without squeezing out a fresh nickel of your own into the deal. That doesn't make the consumer smart or the dealer benevolent.

[repairing]

Rates change everyday. I remember last year the spread between FHA and conventional was significant.

 

Do a break-even analysis to see what works best for you given you situation: timelines, dti, credit score, cash available to close, etc.

 

Then when you find the perfect place, and if you decided to go VA, have Plan B in place to close with a different product.

 

If the VA appraisal is no good, then you will have to order a different appraisal for Plan B.

 

I suggest a 45 day to close on the contract and conduct the appraisal the first week of contract, to give you enough time to change course if the appraisal fails.

 

Appraisal is key.

Edited February 23, 2018 by repairing

[LoanChic]

 

Hit man, are you a loan officer? I close about 60-70 VA loans a year and your advice to OP is misleading and inaccurate.

 

I have closed many, many VA loans in as little as 21 days--contract to close. There is nothing in the VA loan process that makes it any longer to close than a conventional loan, especially if someone is working with a loan officer experienced with VA loans.

 

The funding fee for the first-time use of a veteran's eligibility (OP has never had a VA loan) is 2.15% of the loan amount, which can be financed in the loan. If you have 5% to put down, your funding fee will be reduced to 1.5% and if you have 10% or better to put down, your FF will be 1.25%. Any subsequent VA loan would carry a 3.3% FF.

 

With VA rates being typically a half percent or more lower than conventional rates, the borrower is far better off with a VA loan if he plans to be in the home long term. And as another poster mentioned, there is no pmi on a VA loan. IMO, it's the best loan program available.

 

In my market--and it's a hot one--VA loans are more than welcome. The only reason a seller might not accept a VA offer is if they are selling their house "as is." VA has more stringent requirements for the condition of the home than conventional loans, which is to protect the veteran. So if a seller won't take a VA offer, it's likely the house needs repairs the seller isn't willing to make.

 

 

The way mortgage pricing works it would be expected with any type of loan that paying 1.25%-3.3% of the loan amount upfront would get you a lower interest rate compared to paying no "points" (whether it's called points or a funding fee). That's not exactly a unique feature in mortgage financing.

 

 

I didn't give OP any advice. I listed some factors to consider. There are no blanket statements that apply to everyone's individual circumstances, which is why I said "some sellers" and "can take a long time."

• It can be harder to find an appraiser, and the appraisal process can take longer to complete.
• The appraiser may decide that in order to protect his license and continue to be eligible to do appraisals for the VA that additional inspections are required, which adds time to the process.
• Condos may take significantly longer with VA for the reasons you outlined.

Let's give OP a full set of facts and let him decide. Your best-case-scenario examples help, but they need to be counterbalanced with the rest of story.

 

I also firmly believe that putting people who have almost no savings into a home isn't always doing them a favor. There are risks involved that must be weighed carefully. But too many people just want to buy a house, and it's not very hard to find someone who will sell them a product and earn a commission to get it done.

 

It's not that different from walking into a car dealership $8,000 upside down on your current vehicle, and walking out two hours later with a new car without squeezing out a fresh nickel of your own into the deal. That doesn't make the consumer smart or the dealer benevolent.

 

 

It irritates me, even though I know you are probably very well meaning, when people give advice or pointers to people on subjects for which they are not experts. I am an expert. I am licensed, trained continuously on compliance and changing guidelines, and I'm on-the-job experienced. A funding fee has nothing to do with the points you are referring to. I'm very well aware of how mortgaging pricing works. I work for a direct lender who does not charge an origination fee or discount points, like most banks do. If a buyer wants to buy down his rate, of course we offer that option. That's when he would pay discount points...but I'm sure you know that.

 

For your education, a funding fee is a fee the VA charges--and which goes to the Department of Veterans Affairs, not the lender--at closing. The VA guarantees a portion of a veteran's loan amount to the lender. In fact, they guarantee 25%. So if a veteran were to default on his/her loan, the lender would file a claim with the VA for the loss. The VA uses the funding fee to keep it's coffers full for any payouts. The FF has absolutely nothing to do with lender points or fees. Apples and oranges, Hit Man.

 

The VA created its program as a benefit to veterans. The 100% no down payment benefit is a way for many young veterans to get a leg up on home ownership. It can be more difficult for a young military family than most civilian families who don't move constantly to save enough for a conventional down payment, especially when the veteran isn't making what his counterparts in the civilian sector make, or the spouse is a stay at home spouse because he/she's moving every two to three years in support of her active duty spouse and has never had an opportunity to create her own career and well-paying job. Of course, that is not true for everyone. I just closed a VA loan where my veteran put 10% down. Even with the funding fee, he see's the benefit of the lower interest rate and no pmi. Also, in a lot of cases, as it is in my market where rent is very expensive, it makes much better financial sense for veterans to buy rather than rent. In about 80% of my deals, my active duty veterans have house payments--to include taxes and insurance--are far less than the rent on a small, crappy apartment. And in most cases their BAH (that's basic housing allowance, a non-taxable allowance based on zip code) covers all of their housing expense, plus utilities.

 

I've seen conventional loan nightmares as well as VA nightmares. I get irritated when people make assumptions based on past history (like 10 years past or longer) about the mortgage business when it's changed so much over the years. The compliance requirements and guidelines are tough. Working with an experienced loan officer is crucial to making the transition as smooth as possible and to overcoming any potential problems before they happen.

 

I do get paid on commission. That means I put a lot of effort up front, weighing a borrower's options, providing them with several loan options, making recommendations, being available 7 days a week for questions, holding their hands, being their psychologist, being their cheerleader, fixing problems they didn't even know they had in ways they would never understand, and attending their closings just in case something comes up they don't understand. I earn my commission and I earn every referral I get from my clients because I genuinely care about them and care about making their home buying experience an educated one.

 

Oh, and just for the record, there have been many times I've put in all that effort and I didn't get paid when a borrower decided to walk away from a deal at the end for whatever reason, or decided two weeks into the process after all the hard work's been done, to jump ship on me and go with an internet based lender to save 1/8 of a point, even though that loan officer sits in a cubicle thousands of miles away and knows nothing of my market or the potential issues that can come up with certain properties. But buyers usually get what they pay for and it's just the nature of my business. But i have enough business that I don't ever sweat over losing a deal. I'm able to put my clients' best interest before mine although the same cannot be said about every loan officer in the business.

[repairing]

I think the takeaway from both your comments is that SO MUCH goes into to calculating the rate.

 

One HUGE item that is left out of this, is the purchase price.

Since the home needs to be in in better condition with a VA than conventional, you will likely pay retail.

Does the cost savings of a VA, if any, really trickle down in the end.

 

It's so case-by-case.

[cv91915]

 

 

Hit man, are you a loan officer? I close about 60-70 VA loans a year and your advice to OP is misleading and inaccurate.

 

I have closed many, many VA loans in as little as 21 days--contract to close. There is nothing in the VA loan process that makes it any longer to close than a conventional loan, especially if someone is working with a loan officer experienced with VA loans.

 

The funding fee for the first-time use of a veteran's eligibility (OP has never had a VA loan) is 2.15% of the loan amount, which can be financed in the loan. If you have 5% to put down, your funding fee will be reduced to 1.5% and if you have 10% or better to put down, your FF will be 1.25%. Any subsequent VA loan would carry a 3.3% FF.

 

With VA rates being typically a half percent or more lower than conventional rates, the borrower is far better off with a VA loan if he plans to be in the home long term. And as another poster mentioned, there is no pmi on a VA loan. IMO, it's the best loan program available.

 

In my market--and it's a hot one--VA loans are more than welcome. The only reason a seller might not accept a VA offer is if they are selling their house "as is." VA has more stringent requirements for the condition of the home than conventional loans, which is to protect the veteran. So if a seller won't take a VA offer, it's likely the house needs repairs the seller isn't willing to make.

 

 

The way mortgage pricing works it would be expected with any type of loan that paying 1.25%-3.3% of the loan amount upfront would get you a lower interest rate compared to paying no "points" (whether it's called points or a funding fee). That's not exactly a unique feature in mortgage financing.

 

 

I didn't give OP any advice. I listed some factors to consider. There are no blanket statements that apply to everyone's individual circumstances, which is why I said "some sellers" and "can take a long time."

• It can be harder to find an appraiser, and the appraisal process can take longer to complete.
• The appraiser may decide that in order to protect his license and continue to be eligible to do appraisals for the VA that additional inspections are required, which adds time to the process.
• Condos may take significantly longer with VA for the reasons you outlined.

Let's give OP a full set of facts and let him decide. Your best-case-scenario examples help, but they need to be counterbalanced with the rest of story.

 

I also firmly believe that putting people who have almost no savings into a home isn't always doing them a favor. There are risks involved that must be weighed carefully. But too many people just want to buy a house, and it's not very hard to find someone who will sell them a product and earn a commission to get it done.

 

It's not that different from walking into a car dealership $8,000 upside down on your current vehicle, and walking out two hours later with a new car without squeezing out a fresh nickel of your own into the deal. That doesn't make the consumer smart or the dealer benevolent.

 

 

It irritates me, even though I know you are probably very well meaning, when people give advice or pointers to people on subjects for which they are not experts. I am an expert. I am licensed, trained continuously on compliance and changing guidelines, and I'm on-the-job experienced. A funding fee has nothing to do with the points you are referring to. I'm very well aware of how mortgaging pricing works. I work for a direct lender who does not charge an origination fee or discount points, like most banks do. If a buyer wants to buy down his rate, of course we offer that option. That's when he would pay discount points...but I'm sure you know that.

 

For your education, a funding fee is a fee the VA charges--and which goes to the Department of Veterans Affairs, not the lender--at closing. The VA guarantees a portion of a veteran's loan amount to the lender. In fact, they guarantee 25%. So if a veteran were to default on his/her loan, the lender would file a claim with the VA for the loss. The VA uses the funding fee to keep it's coffers full for any payouts. The FF has absolutely nothing to do with lender points or fees. Apples and oranges, Hit Man.

 

The VA created its program as a benefit to veterans. The 100% no down payment benefit is a way for many young veterans to get a leg up on home ownership. It can be more difficult for a young military family than most civilian families who don't move constantly to save enough for a conventional down payment, especially when the veteran isn't making what his counterparts in the civilian sector make, or the spouse is a stay at home spouse because he/she's moving every two to three years in support of her active duty spouse and has never had an opportunity to create her own career and well-paying job. Of course, that is not true for everyone. I just closed a VA loan where my veteran put 10% down. Even with the funding fee, he see's the benefit of the lower interest rate and no pmi. Also, in a lot of cases, as it is in my market where rent is very expensive, it makes much better financial sense for veterans to buy rather than rent. In about 80% of my deals, my active duty veterans have house payments--to include taxes and insurance--are far less than the rent on a small, crappy apartment. And in most cases their BAH (that's basic housing allowance, a non-taxable allowance based on zip code) covers all of their housing expense, plus utilities.

 

I've seen conventional loan nightmares as well as VA nightmares. I get irritated when people make assumptions based on past history (like 10 years past or longer) about the mortgage business when it's changed so much over the years. The compliance requirements and guidelines are tough. Working with an experienced loan officer is crucial to making the transition as smooth as possible and to overcoming any potential problems before they happen.

 

I do get paid on commission. That means I put a lot of effort up front, weighing a borrower's options, providing them with several loan options, making recommendations, being available 7 days a week for questions, holding their hands, being their psychologist, being their cheerleader, fixing problems they didn't even know they had in ways they would never understand, and attending their closings just in case something comes up they don't understand. I earn my commission and I earn every referral I get from my clients because I genuinely care about them and care about making their home buying experience an educated one.

 

Oh, and just for the record, there have been many times I've put in all that effort and I didn't get paid when a borrower decided to walk away from a deal at the end for whatever reason, or decided two weeks into the process after all the hard work's been done, to jump ship on me and go with an internet based lender to save 1/8 of a point, even though that loan officer sits in a cubicle thousands of miles away and knows nothing of my market or the potential issues that can come up with certain properties. But buyers usually get what they pay for and it's just the nature of my business. But i have enough business that I don't ever sweat over losing a deal. I'm able to put my clients' best interest before mine although the same cannot be said about every loan officer in the business.

 

 

If my posts irritate you, just put me on ignore.

 

As for my observations being out of date, I used an example from earlier in this thread of a condo project that isn't already VA-certified, plus I made a couple of observations about the appraisal process. If the appraisal comments are outdated please let me know; I'm not here to spread misinformation.

 

I know the difference between points and a funding fee. Points are just prepaid interest, while the VA funding fee reduces the risk of the loan. Both result in a lower interest rate.

 

An apple is like an orange, because they share some beneficial qualities (you can eat them, and they're both healthy snacks).

 

I get that you are passionate about the product you sell, and for some situations it's undoubtedly the best option that works out overwhelmingly well.

 

Along the way there will be plenty of people who get VA loans and buy low-end properties in stagnant markets who find out the hard way that doing a 102% LTV loan on a home that doesn't appreciate isn't a winning proposition when it's time to sell in two years and buyers are scarce.

 

Meanwhile they're also paying 26.99% interest on balances on each of two Capital One cards for repair bills for the AC and some plumbing problems they hadn't anticipated... and the sale of the home won't unlock enough equity to even pay the REALTOR® commissions.

 

These are the people I worry about.

[LoanChic]

It really is so case-by-case with every situation. I see and agree with your points as well. My comments are biased solely by virtue of the market I am in. Even if everything went south, like it did 10 years ago, and a home owner found himself underwater, he would have no trouble renting his property in my area. It's one of the things so many of my veteran clients see and why they are not afraid of buying a house and then getting orders out in two years. They know they will be able to rent their home for their mortgage plus some.

 

I agree with you that some do not consider all the risks of home ownership and it certainly isn't for everyone.

[cv91915]

It really is so case-by-case with every situation. I see and agree with your points as well. My comments are biased solely by virtue of the market I am in. Even if everything went south, like it did 10 years ago, and a home owner found himself underwater, he would have no trouble renting his property in my area. It's one of the things so many of my veteran clients see and why they are not afraid of buying a house and then getting orders out in two years. They know they will be able to rent their home for their mortgage plus some.

 

I agree with you that some do not consider all the risks of home ownership and it certainly isn't for everyone.

 

That's really all I was trying to say. This is the most complex financial decision that most people make, and the best answer/solution for one person varies wildly from the best answer for another.

 

We just paid off a 7/1 ARM on our second home, and we are currently burning down the balance on a 3/1 ARM on our primary residence.

 

These products have saved us a ton of money in interest compared to conventional 30/fixed, but the loans we chose could be incredibly risky solutions for people who are differently situated. I would never recommend these products to my brother, for example.