SellAustinTexas

James Kelley at VABenefitBlog.com donated this great blog post to explain the differences between the Federal VA Home Loans and TexVet Loans:

Veterans who relocate to or live in Texas can take advantage of exclusive home loan benefits.

The Texas Veterans Land Bureau (VLB) came up with the mortgage program in 1983. As a result, VLB provides Texas service members with more affordable home financing options.

Tex Vet Loans are similar to the VA home mortgage program with an interest rate under five percent and little to no money down required on the loan.

What’s the Difference?

VA loans and TexVet loans have two key distinctions. The VA loan can be refinanced, while the TexVet loan is not eligible for refinancing. However, eligible TexVet borrowers receive unique discounts and rates.

Disabled Veterans Discount reduces the interest rate amount for veterans with a service-connected disability of 30% or more. The Department of Veteran Affairs confirms the disability through a letter. Borrowers seeking a discount need to have this letter in their documentation. The qualifying veteran can have a 0.5% deduction on his or her interest rate.

Surviving Spouse Discount provides spouses of a partner killed in the line of duty with a 0.5% discount on their interest rate. Spouses of veterans who had a 30% or more service-connected disability at the time of death can also obtain the discount.

Both of the discounts result in a lot of money saved for the qualified borrower—thousands of dollars during the life of their loan.

Other Benefits

Like the VA loan, the TexVet loans require no money down, and besides the discounts, they already have low rates in comparison with conventional loans in the real estate market. Borrowers get up to $325,000 towards the purchase of a home. They can choose from a 10, 15, 25 or 30 year fixed rate mortgage.

Qualifications

- Interested applicants need to establish Texas as their primary residence. They must find a home in Texas that originates with a Texas Veterans housing Assistance Program (VHAP) approved lender.

- The loan does require a decent credit rating of at least 620 or better.

- The house itself will have to pass certain requirements. Homes must be a single-family home, town home, condominium or planned unit development. Duplexes and other multi-units must be more than five-years-old on the closing date of the loan. Borrowers have to contact the VLB to verify if a manufactured home is eligible. Newly constructed homes must meet ENERGY STAR guidelines as set through the Environmental Protection Agency and ENERGY STAR labeled and certified. This means the new home is energy efficient.

It’s a good idea to talk with veteran home loan specialists or counselors. They can help borrowers to seek out lenders and make sure borrowers meet all requirements, turning in all the proper documentation.

Check out James’ blog VABenefitBlog.com for more helpful info for vets.

The 30 year fixed mortgage rate dropped to 4.72% last week, down from the previous week’s 4.79% and way down from 5.59% this time last year. Mortgage rates moved to new lows with another volatile week in the global financial markets. The primary concern revolves around the outlook for the global economy and the possibility of Europe’s debt dragging the U.S. into another recession.

Greece announced that the emergency loans it received will cover its obligations and help the country avoid defaulting on loans, helping to ease investor fears. For the week, this catapulted the Dow 279 points higher. If the stock markets continue this upbeat trend, we’ll see the demand for Treasuries start to wane, which will inevitably push interest rates higher. Although, with the way the global markets have been lately, that demand for U.S. Treasuries might not let up anytime soon.

It’s also looking highly unlikely the Fed will raise interest rates anytime soon, perhaps even until 2011. The uncertainty in the markets and the slow economic recovery will most likely keep mortgage rates low for a few more weeks.

These low interest rates combined with the high inventory of homes throughout the Austin area, provide the perfect opportunity for all home buyers to take advantage of this fantastic market.