Webinar: Which Home Loan is Right for You?
by Lizann Lightfoot - March 18th, 2022
Finding the right fit for home loans
We are wearing ball gowns in honor of ODYD (Operation Deploy Your Dress), and also to celebrate a fun milestone at PCSgrades. We just published our 100th Area Guide this week! We have detailed information about 100 different military bases across the country, so you can get the info you need to make informed decisions before your next move.
What are the loan options when buying a home, and how can someone tell what is the best for them?
Lauren: At CrossCountry mortgage, we have many types of loans-- VA loans, conventional loans, FHA, jumbo, all sorts of loan types depending on your needs and your financial situation. We do a lot of VA loans here, being in a military town.
There is no down payment for a VA loan, and there is no loan insurance. Typically, the rates are a little better and more competitive than conventional loans. Also, you can use the VA loan over and over. You don’t need to have perfect credit for a VA loan, because the credit requirements are a little more relaxed.
Read all the benefits of the VA loan here.
VA loans have changed in recent years, and now the VA loan limits have been removed?
Lauren: Yes, the VA Loan limits went away in January 2020, so now it is all based on how much you can afford--how much income you have, and how much house you can afford. Each individual will have different limits. There are times when loan limits apply, because there is a VA entitlement amount. So if you have never used it, you have the full amount available. But if you already used the VA entitlement to purchase a home, and you have bonus entitlement left (based on your location), you could rent out that house and qualify for another VA loan with no down payment. That’s the only time the limits come into play.
As long as you have lived in your home for over a year, you are eligible to use the VA loan for another home that will become your next primary residence.
In the current housing market, why are some people struggling with VA loans? What are VA loan myths?
Lauren: There are a lot of people who don’t understand the VA loan, so having a real estate agent and a lender who understand the VA loan is very important. There are a lot of myths out there about VA loans:
It’s less likely to close with a VA loan. This isn’t true. I have less trouble closing a VA loan!
It takes longer to close. Also false, we can close them in 21 days, depending how quickly the client is answering questions and turning in documents.
So it’s important to get the right real estate agent, who can debunk myths and educate the listing agent. Get a lender who understands and can explain things to the listing agent. Some people think because there is no down payment that the buyer is less responsible. This is also false. You can add a down payment if you want, but I don’t think it’s necessary.
How does the loan officer fit into your team when you are buying a house?
Lauren: The loan officer is the one giving you the home loan. Your first step is to get pre-approved. NOT just pre-qualified with a bank, but actually pre-approved. Getting pre-qualified is a basic financial review and a ballpark number based on self-reported numbers. Getting pre-approved means actually pulling financials, credit scores, verify income, etc. The loan officer gathers all your paperwork and lets you know your full buying power so you can make sure your monthly payment is right where it needs to be up front. We try to communicate at least once a week, so it becomes like one big family all the way to closing!
How do you find a loan officer who is familiar with the VA loan?
Lauren: Each lender chooses what products they offer, so if you want to use the VA loan, absolutely go with someone who has been trained in it specifically and understands the requirements. Use your resources: PCSgrades has great info and can connect you to a military-friendly lender! The base housing office has good information. And word of mouth is always a good way to get connected with someone who understands our community too.
What initiatives does CrossCountry Mortgage have for military spouses?
Yvonne: We recently started CCM, CrossCountry Military, which is our military division to hire military spouses and veterans across the country to be those loan officers. It’s someone who understands military life, has PCSed before, and is also trained on the mortgage side of things, so they understand both military life and the loans process.
If you have excellent credit and have 20% to put down, which loan is better?
Lauren: In that situation, I would recommend the conventional loan. Because once you have 20% down on the home (which is home equity), there is no mortgage insurance.
You can also check the Home Loan guide on PCSgrades, which is a free download to explain the advantages of a VA loan so you know which is the right fit for you!
What goes into the pre-approval process?
Lauren: First, I’ll have you do an application, and then it will tell you all the documents you need: your most recent LES, your past 2 years of W-2s, any other income, and most recent bank statements. Then I pull your credit score, and once you’re under contract, there will be another round of paperwork to finalize everything.
Yvonne: Don’t be afraid to shop around and go to multiple mortgage companies, and just do a soft application to do an initial inquiry. You should shop around and talk to at least three lenders, because you don’t know what else is out there. People often get sent to bigger banks and call centers, but it can be helpful to talk to smaller companies too, so you get more feedback and often times a faster response.
When should you contact a loan officer during the home-buying process?
Yvonne: Anywhere during the process! Everyone is different, but I prefer to do it at the beginning and have that knowledge going in. But it’s best to do the pre-approval ahead of time, because this market is moving so quickly. You can contact a lender before you find a real estate agent. A good real estate agent should not take you around looking at houses if you aren’t pre-approved yet, because you may not be able to afford the homes you are looking at. And you don’t want to lose a house you love while waiting on the pre-approval.
Since interest rates change, does a pre-approval have an expiration date?
Lauren: Unless your income changes or you acquire more debt, then your purchase price remains the same. Unless you were at the very edge of your budget, and the rates change, then your budget might need to come down a bit. Once you are under contract though, the rate you are locked into will remain the same until closing. But until it locks, the interest rates fluctuate daily.
How should you handle large purchases when you are buying a home?
Lauren: Communicate with your lender if you are trying to buy a new vehicle, or if you anticipate other large purchases. We don’t want surprises on your credit score! But if we know about it ahead of time, we can work with it and present you with different options.
What inspired Operation Deploy Your Dress?
Yvonne: It started in 2015. It was supposed to be a 2-day event, but here we are six years later! In Fort Bliss, Texas, we had a few unit balls going on, and each unit was having a separate ball gown swap. This is common among military units so that people can exchange dresses and wear a new-to-you gown so that your pictures won’t look the same every year. We hoped to collect a few hundred dresses and give them out over that weekend. But then, we got some national media attention, which turned out to be 3,000 dresses! The garrison commander gave us a closed-down gift shop to give out the rest of the dresses. Even though we kept giving dresses away, we kept receiving more, so we ended up reaching out to local spouse clubs to take it on.
Then I PCSed to Fort Eustis, Virginia, and opened up a shop there to see if it would be relevant in that community, and now it has just spread to so many bases across the country! It’s an amazing program because it is military families and civilian families helping each other and supporting our troops. And it’s easy to pull something out of your closet that you won’t wear again. We have deployed over 16,000 dresses! And I just drove 1,500 new dresses from Fort Bragg up to Washington D.C. for our pop-up event on April 30th. Our D.C. event takes about 50 volunteers, because we give away 500 dresses in one day!
Our website shows all the shop locations. You can make a donation by dropping off locally, or by mailing it to one of our locations. And we also accept accessories like shawls, purses, and jewelry. We are open to all branches and all ranks of service.
Lauren Thigpen: I’m in Colorado Springs, and have been a military spouse for 10 years now. I have experience in real estate, banking, and loans, and now I’m working with CrossCountry Mortgage in their military loans division.
Yvonne Coombs: I’m a military spouse of over 20 years, I have 2 children, and I run a non-profit that I co-founded back in 2015. Operation Deploy Your Dress collects gently-used formal attire and accessories and give them to military ID card holders. We have locations at 15 different military bases, and also in Germany, so you could say it is round the world.