Arizona: A Popular Place To Live For Veterans

Ok, so there are several hot spots in Arizona (literally) and pretty much everyone knows that.

But did you know that there are also several “hot spots” in the state for Veterans to live?

Let’s just pick a few – and all of them have homes that you can finance with an Arizona VA loan.

Gilbert is one of the fastest growing cities in the East Valley and is popular for many Veterans who have families. The population there is growing and you can easily find a home that meets the criteria for a Gilbert AZ VA loan.

Mesa has long been popular – and prior to the Gilbert growth explosion, Mesa was a hot area for many Veterans with the airfield so close as well as a major Boeing factory. And yes, there are also plenty of homes that you can easily finance with a Mesa AZ VA loan because home values are not through-the-roof.

Chandler is a sister city to Gilbert and is popular with Veterans who have retired – not to mention some of the Veterans who now work at any one of the high-tech facilities at companies like Intel. It is a little harder to find a home that meets guidelines of a VA loan in Chandler, but it isn’t extremely difficult.

If you are a Veteran and thinking about moving to Arizona or just moving from one city to another in Arizona, be sure to ask your loan officer about your Arizona VA loan options… it is one of the best ways to finance your home.

Top 3 Factors Keeping VA Borrowers From Refinancing

Any veteran home owner who has attempted to refinance his or her current VA loan with a VA streamline refinance sometime in the past one to two years is very aware of how difficult it has become.

When the VA streamline refinance was originally rolled out to veterans it was the easiest loan to qualify for. Just a few years ago your FICO or credit score has no bearing on your ability to streamline refinance into a lower interest rate. The value of your home or its appraisal also had no bearing on your ability to qualify for the VA loans available. Banks and mortgage companies didn’t care who your employer was, how much money you made, or even how much money you’re saving each month.

In the wake of the recent housing and financial meltdown, the VA streamline refinance is no longer as simple to qualify for as it once was. Here is a list of changes that VA mortgage companies and VA lender’s have made to the VA streamline program:

1. The Veteran’s FICO or credit rating now matters.
2. You must be employed.
3. Home value is necessary in most cases.

It is more common than ever to see Veteran’s credit scores suffering — and as a result, any Veterans are not able to refinance with the VA streamline program.

With the highest unemployment rates in decades, many Veterans are unemployed and hence, refinancing is not an option.

And finally — both in Arizona and in other parts of the country, home values have dropped to the point where homes are now often worth less than what is owed on the mortgage.

And until these issues are addressed – I see these issues continuing to keep many VA borrowers from refinancing.

Min. Credit Score Set at 620 for FHA, VA Loans

There are some major changes going into effect very soon regarding credit score requirements on FHA and VA loans. It used to be that on these loans you were able to qualify even if your credit score was below 620 – well it is becoming  apparent that more and more lenders are moving away from this. In fact over the  past few days I’ve received emails informing me that the major banks (Citi, Wells Fargo, Countrywide, Chase)  will not make any exceptions to the 620 rule moving  forward.

This means, you must have a minimum of a 620 credit score in order to be considered for a FHA or VA loan. Below are  highlights of the changes which  will be going into effect in the next few weeks:

  • The minimum credit score for FHA/VA loans will be 620 for all purchases, re-finances  and streamlined refinances.
  • Non-Traditional credit may not be used for creating a credit profile. This  applies to all transaction types. Non traditional credit is where you use the  most recent twelve month history on accounts such as utility bills, cell phone  bill, insurance bills to develop a credit profile of a borrower.
  • Non-traditional credit is not entirely out the window. It may be used when the borrower has an acceptable credit score but has less than 3 active credit lines during the past 12-24 months. So, if you only have had a good history with only two credit cards in the past while then we can use your non-traditional credit to supplement the report. However, keep in mind your credit report  must still contain a credit score of at least 620.
  • Streamlined refinance applications must contain a tri-merged credit report with credit scores. A tri-merged report is one where all three bureaus report a credit profile. It is then merged into one report. In the case of two borrowers on an application each borrower must have a credit score meeting this requirement.
  • Borrowers will now no longer be allowed to pay additional fees to offset credit scores lower than 620? In other words the line pretty much ends at 620. There are no exceptions available and no loan pricing adjustments that can lower the credit score requirement.

For those not familiar with some of the terms used in this post, below is a set  of previous blog posts which can help you understand it better:

Non Traditional Credit: Still operating in the cash economy?

Many loan programs offer what is known as “traditional credit” to replace a credit report. Traditional credit requires rigorous documentation and much effort from the borrowers part. To establish traditional credit the borrower will be required to furnish proof of good standing with four different creditors. Monthly rent paid is automatically counted as one of the four, in essence only three more are required. These three creditors can be utility companies, telephone companies, and any other installment type credit programs.

Read More…

Top Five Credit Misconceptions

The East Valley Tribune published a very informative article yesterday on the top five credit (and debt) misconceptions. According to the EVT (citing Transunion), the top five credit misconceptions are:

Read More…

What Makes Up the FICO Score?

Below is a pie chart that answers a very common question I receive.

What Makes Up the FICO Score?

Read More…

This site is for informational purposes only. It is not sponsored or in any way affiliated with the government. If you are in need of a mortgage loan, consult with a licensed mortgage professional. All fair housing and equal housing opportunity laws apply when applying for a mortgage or buying a home. Copyright 2012.