VA Loans

[brickhistory]

9 hours ago, uhhello said:

Nothing is negative if we've already locked in 2.75 and are about to close right?

Can confirm you are good to go.  Closed today at the 2.75% rate.

[uhhello]

1 hour ago, brickhistory said:

Can confirm you are good to go.  Closed today at the 2.75% rate.

Ditto.  

[ClearedHot]

VA ReFi with Jon and closed last week @ 2.75.  Saved me $300 a month (more gas for my plane).

Only odd thing about the entire process and has nothing to do with Jon or Trident, AFTER closing but before dispersing funds the underwriter came back and wanted to do an employment verification.  3 Million people filed for unemployment in one week so I am guess the underwriters are a bit nervous.

My third time dealing with Marty/Jon/Trident, call/email anytime and they answer or reply right away.  I can vouch for Jon not just as a financial professional but as an AFSOC operator. 

Thanks gents.

 

[Jon - Trident Home Loans]

32 minutes ago, ClearedHot said:

VA ReFi with Jon and closed last week @ 2.75.  Saved me $300 a month (more gas for my plane).

Only odd thing about the entire process and has nothing to do with Jon or Trident, AFTER closing but before dispersing funds the underwriter came back and wanted to do an employment verification.  3 Million people filed for unemployment in one week so I am guess the underwriters are a bit nervous.

My third time dealing with Marty/Jon/Trident, call/email anytime and they answer or reply right away.  I can vouch for Jon not just as a financial professional but as an AFSOC operator. 

Thanks gents.

 

You're welcome and thanks for the nice words/repeat business!  Happy we helped save you some money so you can get some more flying time in!  

Underwriting across the industry is tightening up due to rising unemployment rates.  There is usually one verification of employment done...now there are three.  VA rates are also higher for the most part than conventional rates for the first time ever as well (variety of reasons for this, but mostly because they are zero down loans without any cash reserves required so thus more risky in a crisis).  We can still get low VA rates but not in states with lock downs...we have to start those loans as floating rates and then we can't lock them until they are cleared to close.  Conventionals can be locked in the low 3s in every state.  These are weird times. 

Jon

Another good article explaining the chaos: https://mbshighway.com/mortgage-crisis.html

Edited March 31, 2020 by Jon - Trident Home Loans

[cragspider]

15 hours ago, Jon - Trident Home Loans said:

You're welcome and thanks for the nice words/repeat business!  Happy we helped save you some money so you can get some more flying time in!  

Underwriting across the industry is tightening up due to rising unemployment rates.  There is usually one verification of employment done...now there are three.  VA rates are also higher for the most part than conventional rates for the first time ever as well (variety of reasons for this, but mostly because they are zero down loans without any cash reserves required so thus more risky in a crisis).  We can still get low VA rates but not in states with lock downs...we have to start those loans as floating rates and then we can't lock them until they are cleared to close.  Conventionals can be locked in the low 3s in every state.  These are weird times. 

Jon

Another good article explaining the chaos: https://mbshighway.com/mortgage-crisis.html

John,

thansk for all you have done here. That was a very good article explaining just WTF has been going on. Crazy to see VA above conventional right now. Especially since some of us are moving due to the gov telling us to, so in theory we should be good on employment for a few year for sure.  
 

these are crazy F’ing times for sure. 

Edited April 1, 2020 by cragspider
Crazy F’ing times

[Jon - Trident Home Loans]

7 hours ago, cragspider said:

John,

thansk for all you have done here. That was a very good article explaining just WTF has been going on. Crazy to see VA above conventional right now. Especially since some of us are moving due to the gov telling us to, so in theory we should be good on employment for a few year for sure.  
 

these are crazy F’ing times for sure. 

My pleasure!  Happy to share any gouge I have.  

One of our insiders in the capital market world told us yesterday that Ginnie Mae (the Fannie Mae and Feddie Mac of Gov Loans) will be announcing (as early as this Friday) the details of their assistance program to help with the cash crunch big mortgage servicers are under right now with VA, FHA, and USDA loans.  This will protect big government loan portfolios and bring government mortgage investors back to the table. 

Expecting VA rates back to business as usual as early as next week.  Our owner (Marty) is expecting to see low rates return in the not to distant future and stick around for the next 3-6 months.  No crystal ball but definitely encouraging news considering all the PCSs coming up soon.  We'll keep you posted.

Jon

 

PS: If you missed the refi boom and want to be in the cue for a VA IRRRL (assuming rates go down) make sure you have an app in, authorize us to pull credit, and let me know (jk@mythl.com) what your target rate is.  We see rate dips that no consumer will ever see/time right.  Never saw below 2.75%, 2.875% was common for a while, and 3-3.125% was pretty standard on non-jumbos.  3-3.25% on jumbos above $510,400 was standard, but saw some dips before to 2.875-2.99%.

App link: https://www.blink.mortgage/app/signup/p/tridenthomeloans/jonathankulak

[AlphaMikeFoxtrot]

More kudos to Jon and team at Trident. He was able to find a great rate and close amidst the COVID crisis. I feel like he also moved mountains to help with the sale of our house (not his deal) when our buyer got into a bind with the slow closing process. Lenders aren’t as wide open to lend right now and are swamped with work. He got us through a tough time and we were able to door-to-door this PCS. Thanks Jon!

[Jon - Trident Home Loans]

11 hours ago, AlphaMikeFoxtrot said:

More kudos to Jon and team at Trident. 

You're welcome and glad we could help!  Great to work with you again!  Enjoy the new assignment/house!
 

Jon

850-377-1114

jk@mythl.com

[DFRESH]

Hey @Jon - Trident Home Loans, how are the VA rates looking these days?

[Jon - Trident Home Loans]

3 hours ago, DFRESH said:

Hey @Jon - Trident Home Loans, how are the VA rates looking these days?

In general non-jumbo VAs (Below 510,400) have been averaging in the 3.125-3.25% range with no discount points and no lender fees, but that could change at any point.  Most lenders are charging points or origination fees to get decent VA rates from what I’ve seen.
 

Jumbos are still all over the place so hard to give a trend.

Jon

 

[brabus]

What about rates for VA 15 yr refi or streamline?

[Jon - Trident Home Loans]

12 hours ago, brabus said:

What about rates for VA 15 yr refi or streamline?

15yrs are way worse than 30yrs right now on VAs.  Looking in the 4s to get a no point 15yr.  Everyone is just doing 30yrs and paying it like a 15yr.  Other option is you can contact your current mortgage servicer and  see what they'll do for you.  Seen some offering good rates to guys to keep them on their current repayment schedule.  Servicers don't want to lose loans when they are refi'ed because they paid to buy them and liquidity is already tight.

Streamlines are the same rates as purchase unless we don't lock and  just float the rate.  We've had some good success registering the loan, underwriting it and then locking it at the end right before closing to avoid the hedge cost of locking money for 30-45 days.  We've got guys as low as 2.75% without points doing this but it all depends on what rates look like at the end of underwriting when we lock it.  Good thing is it's no risk, no cost to give it a go and if we don't like the rate we can just leave it hanging out there until we see the good short term lock pricing.  Then we lock and close immediately.  That's how we've got the best deals for guys on streamlines.  That strategy doesn't work good on purchases because there is a fixed closing date and buyers can't just hold off locking cause they have to close.

Jon

[disgruntledemployee]

Jon and crew recently took care of us on a VA IRRRL at 2.75%.  I must have called on the right day.  Once we had the process going, the current mortgage company called and offered to refinance with them at 2.75%.  So I agree with Jon that your current servicers want to keep your loan and might be creative with eating costs on a refi.  A nice thing for us was by doing the refi with Jon, the new loan has escrow waived (we don't need a nanny to pay our bills) and the escrow with the old servicer was overfunded (the 3mo buffer from last years closing , taxes based on a high estimate). 

[nsplayr]

Another success story with Trident. Thanks to Marty and Tyana in particular for working my refi. VA IRRL from 3.75% to 2.75%, gave me options to roll in the modest costs or bring cash, and we closed quickly despite an epic lender fuck-up (~$9K error on the final docs). The error was in my favor though so I wished we could have closed that one haha!

I second the opinion to (almost) always get a 30 year and then just accelerate payment as you see fit unless the 15 year rates are MUCH better. If SHTF and you get furloughed, having the lower required monthly payment will be key and there's no usually penalty to paying early if you stay firmly seated on the gravy train.

So long as Uncle Sugar keeps letting me fly, my personal amortization table is significantly accelerated based on paying extra every month, although that's becoming harder and harder to justify when rates are this low. Would you lend a buddy half a mil over 30 years at only 2.75%?? I would not.

BL: I've now done 4x transactions with Trident in the last 5.5 years and everything has gone as smoothly as could be expected each time. Thanks!

Edited April 20, 2020 by nsplayr

[Jon - Trident Home Loans]

On 4/20/2020 at 1:41 PM, nsplayr said:

BL: I've now done 4x transactions with Trident in the last 5.5 years and everything has gone as smoothly as could be expected each time. Thanks!

Glad we got you hooked up again!  Thanks for all the repeat business!   All great points about a 30yr vs 15yr.

On 4/20/2020 at 11:30 AM, disgruntledemployee said:

Jon and crew recently took care of us on a VA IRRRL at 2.75%.  I must have called on the right day.  Once we had the process going, the current mortgage company called and offered to refinance with them at 2.75%.  So I agree with Jon that your current servicers want to keep your loan and might be creative with eating costs on a refi.  A nice thing for us was by doing the refi with Jon, the new loan has escrow waived (we don't need a nanny to pay our bills) and the escrow with the old servicer was overfunded (the 3mo buffer from last years closing , taxes based on a high estimate). 

Thanks for trusting us over your current servicer with the refi!  Only one investor in the country allows escrow waivers on VA loans.  Unfortunately their rates/pricing are terrible right now so we're not using them, but when they come back its a great option.  A lot of people have terrible stories about their escrow account being either underfunded or overfunded.  Lots of escrow drama out there.  It'd be awesome if more investors got on board and allowed VA escrow waivers.

Jon

Edited April 22, 2020 by Jon - Trident Home Loans

[FDNYOldGuy]

On 4/20/2020 at 1:41 PM, nsplayr said:

I second the opinion to (almost) always get a 30 year and then just accelerate payment as you see fit unless the 15 year rates are MUCH better. If SHTF and you get furloughed, having the lower required monthly payment will be key and there's no usually penalty to paying early if you stay firmly seated on the gravy train.

Third on this. People get very wrapped up in the fact they’ll “save” all the difference in interest owed between a 15 and 30, but they don’t take another piece into account of the extra money spent on payment. 

Personally, I am a believer in taking the difference between a 15 and 30 year payment putting it into TSP/IRA/401k/etc. over making extra payments. The banks are letting you borrow f-tons of money for super low interest that you get to write off; might as well use the excess to fund your retirement and get better returns (also tax sheltered). 

Here are a few financial calculator-run numbers. Say (slightly rounded numbers for all this for simplicity) you get a $300,000 loan. A 30 year payment is $1400/mo at 3.75% interest and your 15 year is $2100/mo at 3.25% interest. Over the life of the loan, you’ll pay $200k in interest for the 30 year and $80k for the 15, a difference of $120k. Initially, you look at that and say, “Ouch! What a waste!” But, that’s if you don’t invest the extra $700 in monthly payment savings in your retirement accounts. If you’re spending it on shiny shit, it can be a waste. Everyone is different; over-saving and not enjoying yourself can be a bad thing, too, so there’s a happy middle in there. But, I digress.

So, say that $700/mo ($8400/yr or $252,000 over 30 years) going into a retirement asset is earning, conservatively, 6% compounding annually. Over a 30 year period, that will give you $664,000 total in the retirement account. Not bad. Even taking out the $252k since it’s money you paid in yourself AND taking the “wasted” $120k in additional interest expenses, you’re coming out ahead by $292,000.

This, obviously, isn’t guaranteed, as markets can fluctuate, returns can change, and if you’re not disciplined about putting the extra payment money away, the benefit is lost. Plus, it doesn’t take into account the “peace of mind” having paid off your house can bring.

But, it can be greatly beneficial if you do it right. 

[otsap]

20 minutes ago, FDNYOldGuy said:

So, say that $700/mo ($8400/yr or $252,000 over 30 years) going into a retirement asset is earning, conservatively, 6% compounding annually. Over a 30 year period, that will give you $664,000 total in the retirement account. Not bad. Even taking out the $252k since it’s money you paid in yourself AND taking the “wasted” $120k in additional interest expenses, you’re coming out ahead by $292,000.

Not trying to counter your argument, because I agree with what you're highlighting here, but to make it a true apples-to-apples comparison you also have to consider that on the 15 year loan, once it's paid off, all of that monthly payment ($2100/month) would go into that same retirement account for the remainder of the 30 year time period you're discussing.  Given the same assumptions of 6%, contributing $2100/month for the final 15 years of the 30 year time period would equal $610,000.  Still less than the $664,000 you accrue doing the 30 yr mortgage, but it's a pretty narrow margin that may swing some people's peace-of-mind value toward the 15 yr.  

[Jon - Trident Home Loans]

2 minutes ago, otsap said:

Not trying to counter your argument, because I agree with what you're highlighting here, but to make it a true apples-to-apples comparison you also have to consider that on the 15 year loan, once it's paid off, all of that monthly payment ($2100/month) would go into that same retirement account for the remainder of the 30 year time period you're discussing.  Given the same assumptions of 6%, contributing $2100/month for the final 15 years of the 30 year time period would equal $610,000.  Still less than the $664,000 you accrue doing the 30 yr mortgage, but it's a pretty narrow margin that may swing some people's peace-of-mind value toward the 15 yr.  

I'd add that if you go 15yr it's a mandatory payment that you could destroy your credit over or end up losing the house if any unexpected life event happened.  It also drives up your debt-to-income ratio to a high level that could keep you from getting a loan on an investment property or second home if you ever go that direction.  Seen a few guys not qualify for a new purchase because they had a 15yr.  I have a 15yr on my house so I'm not anti 15yrs...just something to consider.

[VMFA187]

I like a balanced approach and it depends on what I'm using the property for but I'll always go with a 30 year for flexibility if something comes up. I have a lower priced investment property that brings in about $2500/mo with a $900/mo mortgage. I'm putting all that extra income towards the principal payment so that I can enjoy that full income as soon as possible while not having a second mortgage. 

For my big upcoming purchase that we'll live in for a very long time, I'll make the minimum payments over the course of 30 years and let inflation whittle that down a bit. 

 

Edited April 23, 2020 by VMFA187

[FDNYOldGuy]

2 hours ago, otsap said:

Not trying to counter your argument, because I agree with what you're highlighting here, but to make it a true apples-to-apples comparison you also have to consider that on the 15 year loan, once it's paid off, all of that monthly payment ($2100/month) would go into that same retirement account for the remainder of the 30 year time period you're discussing.  Given the same assumptions of 6%, contributing $2100/month for the final 15 years of the 30 year time period would equal $610,000.  Still less than the $664,000 you accrue doing the 30 yr mortgage, but it's a pretty narrow margin that may swing some people's peace-of-mind value toward the 15 yr.  

100% true I didn't highlight investing the $2100 after the note is paid off. There are certainly a lot of assumptions made with all of it and there are certainly things lost in the number-wang. 

Your $610k number is monthly compounding on the $2100, where I did annual compounding for my $8400 to get $664k. I get $586k for 15 periods of $25,200 ($2100 x 12 months) at 6% compounded annually, which is ~$80k lower than my route. Or, my numbers run at $700 and that 6% compounding monthly is $703k, so now we're talking almost $100k more. Not to nitpick, but just to clarify and make it more apples to apples.

I also completely left out the additional savings of interest tax deduction for all of those years; mostly because it's nearly impossible to calculate and different to each person's situation. That also helps my cause a little bit, as you're "saving" more money in taxes through the higher mortgage interest deduction of the 30 year PLUS the reduction in income if you are putting money in a pre-tax TSP/401k/IRA. Nor did I highlight inflation's positive aspects of the longer timeframe notes. That payment becomes a much smaller part of your income as the years click off and inflation/annual CoL raises kick in.

The rabbit hole goes deep. Haha.

The biggest keys to EITHER route chosen is discipline to invest the money, which isn't always humans' strong suit. A higher mortgage payment is more "forced" savings, where the other method requires one to stick to the plan and invest the extra money. Plus, as @Jon - Trident Home Loans says, the security in being able to make a lower house payment if times get tough (as they certainly are for a lot of folks these days) and not worry about trashing credit is pretty big. Then again, so is not having a mortgage at all.

YMMV, is the biggest takeaway. And, in reality, fewer folks actually hold a mortgage to pay off date, anyway. Most move, refi, or just pay it off early. Just trying to put another perspective out there.

 

Edited April 22, 2020 by FDNYOldGuy
Added another bit

[Royal]

Jon,

Are there any provisions in bank generated loan documentation that protects lending institutions in the event of an inflationary run? Say a similar scenario to the late 1970s manifested and double digit annual inflation popped up; can banks readjust loan conditions retroactively? Thanks!

[Jon - Trident Home Loans]

Not that I’ve ever seen or heard of, but I’m not a legal expert.  Loans aren’t held by banks anymore...they are held in mortgage backed securities.  Banks and servicers just collect the payments and do the customer interface portion.

[JQuintana]

+1 for Jon and Trident.  Closed a few days ago on a new VA loan at 2.875% (locked right at the beginning of everything going haywire) and he was consistently responsive to any questions I had and always kept my SA up with how the process was moving along.

[kona4breakfast]

Another kudos for Jon and crew. 2.75% cash out refi closed at the beginning of the month. Wife and I have plenty of cash on hand, but this way I effectively keep my payments the same and pay for the projects in 27 years with equity today.

You investor types have a lot of questionable assumptions. The 2.75% is a known, guaranteed loss, but that's running really close to the official rate of inflation and likely even lower, so essentially free money. But your estimate of gains in the market is definitely not guaranteed. It only takes a 50% loss to wipe out 100% of gains. Losses matter a lot more than gains, and pretty soon the only "safe" investment, bonds, will be yielding negative, forcing us all to take a lot of downside risk. At least my downside risk is capped (though the equity could tank if the real estate market tanks when banks start escalating the risk premia to extend loans, but in the meantime I can live in it). 

[FDNYOldGuy]

 

1 hour ago, kona4breakfast said:

You investor types have a lot of questionable assumptions. The 2.75% is a known, guaranteed loss, but that's running really close to the official rate of inflation and likely even lower, so essentially free money. But your estimate of gains in the market is definitely not guaranteed. It only takes a 50% loss to wipe out 100% of gains. Losses matter a lot more than gains, and pretty soon the only "safe" investment, bonds, will be yielding negative, forcing us all to take a lot of downside risk. At least my downside risk is capped (though the equity could tank if the real estate market tanks when banks start escalating the risk premia to extend loans, but in the meantime I can live in it). 

The S&P 500 Index originally began in 1926 as the "Composite Index" comprised of only 90 stocks.1 According to historical records, the average annual return since its inception in 1926 through 2018 is approximately 10%-11%.[cite] The average annual return since adopting 500 stocks into the index in 1957 through 2018 is roughly 8%.

Not really assumptions, honestly. My using of 6% market returns are on the conservative side when taking the above into account, so the investment vs. payment numbers would likely average out even better. Your “guaranteed” 2.75% loss is technically lower than that, even, when you take the tax savings of interest deduction. (As an aside, you’ll 100% have me agreeing about “guaranteed losses” when we’re talking other debt; especially for shiny things and credit cards.)

Home prices have had a much lower return; even with the crazy returns the super-low interest rates since 9/11, the rise of Airbnb, and the simple increase in population have brought. More to that, home prices have mostly synced up with stock markets, so if markets are down so is your value/store of equity/pool of buyers. 

Again, each person has their own wants, needs, and risk tolerance and, more than returns, they need to make decisions based on those. Timing of and market during buying and selling affects home value as much as it affects stock values. Of course, you can be in the unfortunate situation of wanting or needing to sell in a bear housing or stock market with little control over that. That’s just part of the game.

But, the old boilerplate thinking of paying off mortgages as quickly as possible does have some pitfalls and investing that money used to pay off the mortgage can have some serious merits.