Ask, and Do Tell!

Ask, and Do Tell! LGBT Military Vets and Valuable VA Mortgage Benefits

In October tens of thousands of LGBT citizens swarmed the nation’s capital to call for legalized equality and an end to discrimination. During an event organized by Human Rights Watch on the same weekend, President Obama renewed his personal political promises to push for gay rights – both in the civilian sector as well as within the ranks of the military. He specifically cited the “don’t’ ask, don’t tell” policy of the United States military, vowing to put an end to that form of silencing of LGBT Americans who proudly and bravely serve in the armed forces.

What politics and legislation will transpire within the coming months and years in regard to LGBT rights remains to be seen and we can only hope for – and continue to push for – what’s best. But in the meantime there is an important program that all military or ex-military members of the LGBT community should consider taking full advantage of if they intend to buy or refinance a home. Exclusive mortgage terms and special perks are offered by the Veterans Administration through VA loans, to both active and reserve members as well as to honorably discharged veterans.

Maybe the Pentagon still abides by a “don’t ask, don’t tell” policy, but VA loan benefits are for everyone – straight or gay – and currently there are some 20 million veterans who are eligible for these user-friendly home loans.

Rates on VA mortgages are competitive with conventional loans, offer predictable and affordable fixed rates, and involve no down payment. The down payment alone on the average American home typically runs anywhere from $20,000-$50,000, so that is enough to make a VA loan an amazing bargain.

Underwriting on VA loans is more lenient than it is for conventional loans, especially these days when lender guidelines are so much more stringent regarding such things as the ratio of overall debt to verifiable income. It is even possible to get VA mortgages without having to incur any out-of-pocket expenses at all.

Unlike most other loans, VA loans do not charge for private mortgage insurance (PMI), which can save you an average of $50-$100 per month. VA loans instead require a “funding fee” which is typically much lower than PMI and is tax deductible. The fee is waived completely for those veterans disabled in the line of duty.

The biggest news with VA loans is that recently the dollar amount limits have been increased in order to keep up with housing price inflation. In most parts of the USA you can take out a VA loan for up to $417,000 – but in some of the pricier regions of the country like California it is possible to qualify for VA mortgages to finance purchases of more than a million dollars.

No-money-down loans above $417,000 were authorized in 2008, but due to current market conditions the VA has temporarily suspended its zero-down program for jumbo loans. But it is still possible to get loans up to $417,000 with nothing down.

You can use also refinance an existing VA loan for more attractive terms, a lower monthly payment, or to free up needed cash for expenses like home improvements or a major purchase.

Whether you need money to consolidate high interest credit card debt, buy a new car, or do upgrades on your property, you can take advantage of a cash-out refinance with loans of up to 90 percent of the current appraised value. The closing costs can be rolled into the loan in most circumstances.

With the VA’s new Streamline Refinance Program it is also quicker and easier to refinance an existing VA loan, with less paperwork and documentation. No appraisal, income or employment verification, credit report, or termite certificate is required – as long as the current mortgage is up-to-date with no second mortgages or other liens.

Like the FHA and other government mortgage agencies, the Veterans Administration does not actually make loans but instead it insures loans made by banks and other lenders against borrower defaults. By promising to repay a significant percentage of the mortgage amount, the VA reduces the risk to lenders. In exchange for that reassurance the lenders agree to write mortgages for veterans with special terms and perks. The application process is easy and the benefits are huge.

Any lender who is authorized to write VA loans can provide information and quotes while explaining the various options and walking you through the application process. In order to prove military status it is necessary to acquire an official Certificate of Eligibility, but most lenders affiliated with the VA are connected to an Internet-enabled system that can secure the document within a matter of minutes.

The VA also offers foreclosure-prevention services to assist veterans by stepping in to negotiate with the lender when a veteran falls behind on payments.

Whether you’re buying, selling, or refinancing – either as a veteran or non-veteran – contact the global network of real estate professionals at www.GayRealEstate.com. Or call toll-free at 1-888-420-MOVE (6683).

Posted by Jeff Hammerberg on October 24, 2009