By Tammy Engel
Mortgage Advisor
Odds and ends
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For all my hoopla about VA loans lately, here’s something to consider if you want to use yours: If the VA has suffered a financial loss from you in the past, you may not be able to use your home loan entitlement.
Twice recently we’ve run into veterans who wanted to re-use their VA entitlement, and on both there was an old loss outstanding. One of those was from the 1980s. If you want to use your VA entitlement for home loans, you’d best get on the VA website and make sure your entitlement is clear.
It can be done, depending on how we structure financing, but here’s something you want to consider: Until you are formally divorced, you are still married. Regardless of loan type, this means your spouse will need to sign an Inter-Spousal Quit Claim before you can close escrow. The document acknowledges that although you are still married, your spouse has no ownership in your new home.
We recently encountered old judgments appearing on a title report when the debts had been discharged years back – except that the creditors had filed judgments against the house before the BK and the attorney hadn’t noticed. Since the filing did not specifically discharge the judgments, they remain as liens against the house and we can’t close escrow.
In Kern County, the current loan limit for FHA financing is $271,050. Remember that you could still use this loan type if you pay the difference between the loan limit and your home price as a cash down payment.
FHA loans have higher debt-ratio tolerances and lower credit score tolerances than conventional loans. Even with the mandatory mortgage insurance it might be prudent to weigh FHA versus conventional loans in some situations.
Last, your home purchase contract specifies who pays for a pest inspection and the repair of any items found. Usually the seller pays for the inspection, and the repair of any “section one” items, or current infestation issues. The “watch” items are listed as “section two” items, and sometimes the buyer will pay for those if found. Be aware that most lenders do not require mandatory repair of section two items unless they are water-related. Read the report thoroughly: If there are any water stains or leaks noted, they will need to be addressed by a licensed professional before escrow can close.
Tammy Engel is your local Mortgage Advisor, and has been working for your best interest since 1990.
Contact her for purchase, refinance, or reverse mortgage at 661/822-7325.
