Homebuying – WeVett

Military Homeownership – Buying in High-Cost Areas

matt — Wed, 11 Feb 2026 21:01:30 +0000

When Is My First Mortgage Payment Due?

matt — Fri, 29 Aug 2025 17:09:13 +0000

When Do I Make My First Mortgage Payment?

My name’s Evan Kaufman, your loan originator, here to help explain.

Your first mortgage payment is not actually made immediately after closing on your home. How it works, I like to say, is this: you make your first mortgage payment the second month following your closing.

What I mean by that is, if you close—say in January, any time during the month of January—your first payment is not going to be due in February. It’s going to be due in March. That gives you a little bit of time.

Now, if you’re wondering why that is, let’s break it down.

How Interest Works at Closing

When you close on a home, you’re closing on a specific day of the month. It could be the 1st, it could be the 31st, or somewhere in between. What happens is that, at closing, you’ll pay a prorated amount of interest for the month in which you close.

If you look at your closing statement, you’ll see “prorated interest.” That’s the interest you owe for the number of days you owned the home during that month.

If you close on the 1st of the month, you’ll have almost a full month of prorated interest due at closing.
If you close at the end of the month, you’ll only owe a few days’ worth of prorated interest at closing.

Why Payments Are in Arrears

Mortgage payments are always paid in arrears. In other words, you’re paying after you’ve lived in the home.

For example:

You live in your home during February.
Your payment for that time is due on March 1st.

That’s why, if you close in January, you’ll pay prorated interest for January at closing. Then, on February 1st, you don’t actually make a payment, because you’re paying in arrears. Your first official payment will be March 1st, covering the time you lived in the home during February.

Planning Your Closing Date

Sometimes people try to “skip a payment” by closing at the very start of a month instead of the end of the previous one. For example:

If you close January 31st, your first payment will be due in March.
If you wait and close February 1st, your first payment won’t be due until April.

That does push your first payment back, but remember: closing at the start of the month means you’ll owe a full month’s prorated interest at closing, which increases your closing costs.

So, here’s the trade-off:

Close late in the month → Less prorated interest due at closing, but your first payment comes sooner.
Close early in the month → Higher prorated interest due at closing, but your first payment comes later.

Quick Examples

Close in January → First payment due in March.
Close in June → First payment due in August.
Close in July → First payment due in September.

Refinances

With refinances, this timing can also make a difference. Sometimes, depending on the loan program, it can feel like you “skip” two payments—but that’s another discussion for another video.

Bottom Line: Your first mortgage payment is due the second month after closing.

Close in January → Pay in March.
Close in July → Pay in September.

I hope that helps demystify the process a little bit.

My name’s Evan Kaufman, your loan educator. Take care!

Tariffs and Home Buying

matt — Fri, 18 Apr 2025 17:28:35 +0000

Are we being impacted by tariffs — and what does that mean for mortgage rates?

Over the past few months, we’ve all been inundated with a classic economic term: tariffs.

If you happen to be a homebuyer, real estate agent, another mortgage loan officer — anything like that — and you’re wondering, “How does that actually impact interest rates?”, which really impacts our homebuying process, we’re going to discuss that.

Now, there are two different ways of really looking at it:

What we’ll call the textbook theory, and
The reality.

My name’s Evan Kaufman, your VA loan originator, here to help explain.

Now, my background is in economics. I loved it — that was my degree. That’s what I got in school, and I went on to get an MBA in Finance. I just love analyzing these unique things when it comes to economics and how they impact the business I’m in — mortgage loan origination and real estate.

So let’s dive in.

The Surge of Tariff Talk

Over the last few months, we’ve all been, again, inundated with the term “tariffs.”

The United States imposing tariffs
Then taking them back off
Other countries firing tariffs against us

It’s honestly all over the place.

But I like to think: How’s that going to impact our interest rates? When I’m talking with clients or real estate agents, I want to help them understand where rates are moving.

Let’s Start with Textbook Theory

I go back to my old thought process and my macroeconomics textbook.

If we increase tariffs on another country, then technically, the host country — in this case, the U.S. — should see its currency increase in value.

That increase in currency value would then:

Increase demand for the U.S. dollar
Increase demand for bonds and treasuries
And since mortgage rates are heavily influenced by the 10-year Treasury yield, there’s a connection

Now, you might think, “If demand goes up, interest rates must go up too.”

Nope.

More demand for bonds actually drives yields down — because the U.S. doesn’t have to offer as much return to attract investors. Think about it: if everyone wants to buy something, you don’t have to incentivize them as much to do it.

So, when demand for the 10-year Treasury goes up, the yield drops. And when that yield drops?
Mortgage rates usually go down.

So again — in a vacuum — textbook theory tells us:
Tariffs = stronger dollar = higher bond demand = lower yields = lower mortgage rates.

A Real Example

Ironically, when one of the more recent tariff announcements came out (I think it was around mid-March?), we made a bet in the office:

“Hey, I bet tomorrow Treasury yields will drop and mortgage rates will improve.”

And — surprise! — they did.

Textbook theory played out. For a moment.

Then Comes Reality

Here’s the thing: economics sounds great on paper. Economists love to predict the future — we like to believe economics is a way to apply math to life.

But people — and the world — are not always rational.

Reality adds more layers:

Other countries respond to our tariffs by imposing their own
Inflation reports come out
The Federal Reserve might say something unexpected
A new jobs report drops
Global uncertainty enters the chat

Suddenly, everything shifts.

I remember a class called Econometrics — we had to model hundreds of input variables. But in real life, there are way more variables than we can even begin to model. It’s impossible to capture them all.

So What Actually Happened?

Yes, we saw an initial dip in rates after the tariff announcement.
But soon after:

Other countries reimposed retaliatory tariffs
Inflation data shifted market sentiment
Fed commentary changed the narrative

And rates? They went back up. Then down again. Then sideways.

It’s been a roller coaster.

The Bottom Line

So — can tariffs influence interest rates?
Yes, in theory.
But no, not reliably.

There are too many other factors at play.

Still, I always remind people:

You can’t control the outside world, but you can control your own financial decisions.

If you’re a homebuyer, timing the market perfectly is nearly impossible. Rates go up, they go down. If they improve in the future, that’s why refinancing exists — especially with VA loans, where future refinancing options are flexible.

Final Thoughts

Don’t stress too much trying to catch the absolute low point on rates. It’s nearly impossible to predict. Focus on what you can control — your budget, your goals, your buying timeline.

Again, my name’s Evan Kaufman — I hope this helped explain things a bit more clearly.

Feel free to reach out or drop a question in the comments.

Take care!

Property Types to Avoid in 2025

matt — Fri, 18 Apr 2025 17:08:26 +0000

What are a couple of property types to watch out for in 2025 if you happen to be buying a home?

My name’s Evan Kaufman, your VA loan originator. We work with a lot of folks buying all different types of properties—that could be a single-family home, a multifamily like a duplex, triplex, quad, a condo, a townhome, or even a ranch. There are multiple different types of homes out there.

But there are two types of properties that I would be very cautious of now here in 2025—and really for the short term going forward.

1. Condos

You want to watch out for condos. What I’ve seen over the last 1 to 2 years is a lot of shifts in how condo associations are handled.

Because one thing you’ve got to understand: condos have a condo association, and they usually dictate some part of the property you’re buying. The whole point of a condo is, “Hey, we’re buying this property along with all these other same or similar ones next to it.” They could be connected or separate—there are a couple of different ways to do it. But the point is, you’re all banding together, and the condo association takes care of certain things for the condo you own.

That’s generally things like:

The roof
Common areas
The siding
Or other shared components

But the key is this: you’re reliant on your neighbors—the people in the condo association—to help make sure the condo is well run.

In 2025 (and we really started seeing this in 2024 and even 2023), condo associations have run into a lot of issues. That’s heavily because costs have changed dramatically over just the past couple of years.

A Big Example: Insurance

Condos have to have a master insurance policy, and insurance has changed drastically due to weather-related events—hurricanes in the Carolinas, wildfires in California, and more. These issues have caused insurance costs to increase significantly.

Sometimes condo associations are slow to adjust. And if they’re slow to adjust or fail to meet higher standards, you might be buying a condo that gets hit with a sudden insurance increase after you close.

That’s why you want to pay particular attention to any potential future assessments on the condo.

If a condo has a change:

You could be assessed for a major repair
Or your monthly condo fees could increase

Ask your real estate agent to get:

The condo association documents
The declaration pages
A copy of the insurance policy itself

You might even want to go a step further and review:

Meeting minutes from recent condo association board meetings
Whether they’re actively meeting
Whether any discussions of future assessments are recorded

Because here’s the thing: you could be told there are no current assessments, but the association could change that within months—and they don’t have to notify you until the change is official.

More Challenges Ahead

In states like Florida, structural insurance requirements have changed. Where associations used to need structural reviews every 10+ years, they now need them more frequently. Roof age is becoming a bigger issue—what used to be okay at 15–20 years may now require replacement after 10 years. That could lead to big assessments suddenly coming due.

So while condos have their place, and can be good in the right situations, you need to be cautious. You’re becoming dependent on other people—and when you’re not in control of costs, that’s risky.

2. New Builds

The second property type to be cautious of is new construction homes.

One positive: the timeframe to build has come down compared to the COVID era. Back then, it could take 12–18 months to build a home. Today, it’s better.

However, the number of building permits has decreased, and demand has softened. That’s caused some builders to:

Cut corners
Use cheaper materials
Or rush construction to preserve their profit margins

This is just my opinion—coming from someone who grew up in a family of builders—but some builders right now are starting to cut back on quality.

Real-World Signs

I’ve walked through a few recently where I’d question the construction quality. There are even inspectors and agents posting about some of the issues they’re seeing.

That’s not to say there aren’t still wonderful quality builders—there absolutely are! But again, like with condos, you need to research.

How to Vet a Builder

If you’re building a home:

Go see previous homes that builder has completed
Don’t go alone—bring an inspector with you
Look for weird or concerning trends across their builds

That way, you don’t:

Sign a contract too early
Get locked into a build
Discover problems after it’s already underway

Because once you’re under contract, it’s harder to change course. The builder may not be required to meet your desired quality level—and now you’re stuck, possibly negotiating mid-build.

The Bottom Line

Whether it’s a condo or a new build, the key issue is this: you are dependent on someone else.

When someone else controls your home, your quality, or your monthly cost, you need to scrutinize it more closely. Both property types can work, but in 2025, I recommend extra due diligence because of:

Insurance volatility
Structural inspection changes
Shifts in builder behavior and demand

Work with:

A real estate agent who knows how to dig into these issues
A lender who can help explain the costs and risks

If we’ve worked with you before, you’ve probably had a conversation like this with us. If not—we’d be more than happy to help you if you’re looking to buy a home in the near future.

Again, my name is Evan Kaufman. I help folks in just about every state—especially our military families moving to major military installations.

Hope this helped you. We’ll talk to you later. Take care.

How Much House You Can Buy vs How Much You Can Afford

matt — Tue, 24 Dec 2024 16:20:17 +0000

Transcript

This video comes off the heels of another one I just did, where I mentioned: “Hey, pay off debt to get more debt.” Now, we’re going to talk about how much you should actually pay for a home versus what you could pay for a home.

What You Can Afford vs. What You Should Pay

Often, when working on loan applications, I like to tell folks:

There’s the amount you can be qualified for, and
There’s the amount you might actually want to pay.

These are two very different worlds.

In the last video, and in a few others you’ll see on our site, we discussed the debt-to-income ratio (DTI) and how it really impacts what you can afford on a home—assuming everything else in the mortgage application is relatively clear.

The DTI is a key metric lenders look at, essentially saying, “How much of your income is going toward debt payments?”

High DTI Ratios: A Red Flag for Your Budget

Here’s a shocker: For mortgages, DTI ratios are often pushed up to 50%, and sometimes even higher for certain loan types, like VA loans. But that’s not always ideal. Why?

If half of your income is going toward maintaining debt, it’s not the best metric for long-term success in your personal budget.

This brings me to an important point: Just because we tell you that you can afford it doesn’t mean you should pay for it month by month.

A Real-World Example

Let’s take an example:

You’re making $6,000 a month and have a 50% DTI ratio.

This means $3,000 a month is going toward debt.
That leaves you with $3,000 for all other expenses.

However, that 50% DTI is based on pre-tax income. So, that $6,000 gross income might actually be $5,000 or even $4,500 after taxes, depending on where you live.

Now imagine you have a $3,000 monthly mortgage payment. With only $4,500–$5,000 in take-home pay, you’re left with very little for other living expenses. If you’re trying to save or compound your finances, this situation gets tough quickly.

What’s the Ideal DTI Ratio?

The lowest DTI ratio is, of course, the best. If you’re trying to build wealth, save, and invest, lower is always better.

What’s a good target?

Ideally, aim for 35% or less.
Around 35% is where I’ve seen many folks succeed in saving, investing, and managing a mortgage that fits their lifestyle.

If your DTI is higher (e.g., 40–50%), especially with certain loan types like VA loans, it’s worth re-evaluating your situation.

Nuances in DTI Ratios

There are always nuances to consider. For example:

If someone has a high DTI ratio (e.g., 60–70%), it might be because they’ve left a spouse off the loan application. In most states, you don’t have to count one spouse’s debts against the other.
This can make the DTI look higher on paper, but the household’s overall financial situation might still be reasonable.

That said, when factoring in all debts, including your new mortgage, it’s best to keep the DTI around 35% or less to ensure long-term financial stability.

Final Thoughts: Do a Budget First

Before buying a home, make sure you do a budget.

Get a clear idea of what’s comfortable for you.
If you have high fixed monthly costs (e.g., unique expenses), factor those in.

At the end of the day, buying a home should be a blessing, not a curse. If you’re underwater on your mortgage, it’s not going to feel like an enjoyable experience.

Remember, just because you can afford a certain number doesn’t mean you should go for it. Think about what’s sustainable for your lifestyle.

My name’s Evan Kaufman, your VA loan originator. Take care!

What are Prepaids and Escrows?

matt — Fri, 08 Nov 2024 23:21:06 +0000

Transcript

Prepaid Expenses and Escrow Expenses—What the Heck Are Those?

My name is Evan Kaufman, your VA loan originator, here to help explain.

When you get an initial loan disclosure, you’ll receive a loan estimate. On that loan estimate, there are two sections—F and G—that break down prepaids and initial escrow payments.

Later, when you get your closing disclosure (towards the end of the loan process or somewhere in the middle), it refines those numbers further, but you’ll still see sections F and G detailing prepaid expenses and escrow expenses.

Now, you might look at these and wonder, “what the heck are those?” You might notice costs for title and lender fees, which make sense, but then see prepaids and escrows and wonder what those mean.

Let’s start with prepaids.

Prepaids are, as the name suggests, expenses you’re paying in advance.

The main example here is insurance.

For instance, when you get a quote for home insurance, say $1,500 per year, you need to pay for the first year upfront. You’ll see that amount listed under prepaids unless you choose to pay for it separately.

If you pay it on your own, just make sure to provide us with an invoice or receipt so we can account for it.

However, if you’d like to include it in your closing costs, we can handle that too, and you’ll see the insurance amount in that section.

In addition to insurance, you’ll generally see prepaid interest and possibly prepaid taxes.

Taxes aren’t always listed right away, as they depend on the tax cycle, but if there’s a tax bill due, it may appear later in the process.

The key item here, though, is prepaid interest.

Prepaid interest covers the prorated interest from the time you close until your first payment.

Let’s say you close on October 30. Your first payment won’t be due November 1—it’ll be due December 1. But you’re still responsible for covering the interest for those final days in October. So, we’ll calculate a prorated amount for that period.

If you close earlier in the month, there will be more days to cover, and your prepaid interest amount will be higher. For example, closing on October 5 would mean you’re covering 25 or 26 days, so the amount will be larger. But remember, your first payment still won’t be due until December 1, covering the full month of November. This prepayment covers only the prorated days of ownership in the closing month.

To summarize, in section F (prepaids), you’ll usually see insurance, some prepaid interest, and possibly taxes, depending on the tax bill cycle.

Now, let’s look at escrows, which appear in section G on your loan estimate and final closing disclosure.

Escrows are an account we set up to build a cushion, covering taxes and insurance.

Typically, we’ll include about three months’ worth of payments for each, though it may be higher for taxes if there’s a large bill coming due. Think of escrow as a cushion—if you ever stop making payments, the lender or servicer has extra funds to cover taxes and insurance.

Fun fact: In most cases, you can waive your escrow account.

For VA loans, we can often make this request for you.

Waiving escrow means you won’t need to build up that cushion at closing, which reduces your initial cash needed. However, you’ll still be responsible for paying taxes and insurance on your own, and we’ll still need proof of a year’s worth of insurance, which we discussed in the prepaid section.

When you hear people say, “are you escrowing your account?”, they generally mean your mortgage payment includes principal, interest, taxes, and insurance in one payment.

We, as your lender or servicer, collect that payment, add it to your escrow, and then pay your tax and insurance bills as they come due.

The escrow on your closing statement usually reflects about three months’ worth of payments as a starting cushion.

If you sell or refinance your home in the future, whatever is left in your escrow account will be refunded to you within 30 days.

For those refinancing rather than purchasing, prepaids may differ. For example, the insurance prepaid amount may or may not be required, depending on where you are in the insurance cycle.

Prepaids and escrows can be a significant cost on your initial loan estimate and final closing disclosure. Sometimes, people are surprised by the size of the escrow account if their insurance policy is large, which can impact cash due at closing.

That’s why it’s essential to work closely with us to get an accurate idea of your prepaids and escrows. We can review your financials and give you an idea of what to expect for these costs.

My name is Evan Kaufman, and I hope this helps clarify prepaids and escrows. I’m here to help you win a home with your VA loan. Take care!

The Most Underrated Tip for First Time Homebuyers

matt — Tue, 04 Jun 2024 19:44:55 +0000

Transcript

The most underrated tip for first time home buyers: when you’re starting out and this is your first time looking to buy a home, it can feel like you’re drinking from a fire hose.

I mean, literally.

Sometimes folks will tell me, “Hey Evan, I’m getting hit with so many different things. How do I line up financing and set things out to make sure I know I’m going to close?”

We mapped out on a board before how many people are involved in the home purchase process. Typically, at a minimum, there’s 12 different real estate-related professionals in a home closing.

On the other extreme, if there’s all of a sudden all different kinds of assistance and stuff for those professionals, there could be 16 to 20 different people touching a real estate transaction. That’s a lot of different people.

So, as a first-time buyer, how the heck do I make this even happen?

What if I told you there is a way to make sure that process is relatively smooth?

One of the biggest issues I see from folks is, all of a sudden, they see a home they like: “Oh, I want to buy it! It’s good, it’s going to go quickly, I need to hurry!”

So, they rush and pick a random real estate agent, a random lender, and then they end up with a subpar process.

Who you work with makes a difference.

Give yourself some time, prepare ahead.

Now, that all comes down to two major things.

Number one is your lender, because they’re helping handle the finances. You need to trust what they’re telling you to get accurate numbers and to understand how you’re closing.

For example, our business caters heavily to active duty military and first-time home buyers who are using VA loans or conventional loans.

We put out a lot of good quality information that helps support that. So, you want to find a company, a lending firm, that understands the process of first-time home buying and what it looks like specifically for you.

And then, number two, like your quarterback, is the real estate agent.

Having a real estate agent you can trust to walk you through your contract, to coordinate with the title offices or attorneys that you’re dealing with, is crucial.

You should narrow it down the whole process to ideally two folks that you work with heavily: your lender and your real estate agent.

It matters who you’re working with to streamline the process, and they give you the information you need to help get the deal well done.

My name is Evan Kaufman, your VA loan originator, dealing with VA and conventional loans for home buyers all across the country.

If you’re working with a lender right now and you want a second opinion, we’re here for you. If you’re needing some advice upfront and you’re just starting the process, we’re here for you.

Does the VA Require Home Inspections?

matt — Tue, 16 Apr 2024 18:43:26 +0000

Transcript

VA home inspections, what is it?

The reality is, there is no required VA home loan inspection. My name’s Evan Kaufman, your VA loan originator, here to help explain.

So, a lot of folks will get a home under contract and then they know, “Oh, I gotta get this home inspected and looked at. I got a VA loan. I’ve heard some things about a VA inspector having their own issues or things that they need fixed with the deal. How does that work?”

Well, the reality is the VA doesn’t require you to have a VA home inspection. I mean, there is no VA inspector that comes out and inspects the home.

What really happens is you have a couple inspection requirements that typically you have to have done, separate, with your real estate agent and working with your inspector.

And then there’s a VA appraisal that has minimum property requirements that the property has to meet that sometimes can mirror an inspection.

So, we’re going to talk on both of those separately.

First, up front for the actual home inspection, here’s what I always have to say: the VA appraisal or the VA appraisal process is no substitute for a home inspection.

But the VA does require that for some properties, you have a couple types of inspections done.

One of the main ones in most states, not all, but in most states is a termite inspection, otherwise referred to as a WDO (wood-destroying organism) inspection.

It’s got to be cleared, meaning there can’t be a lot of evidence of like termite damage.

How that one works is: you’ll work with your real estate agent, or you’ll work with your inspector to get scheduled a termite inspection.

And as long as it’s cleared on the paperwork and you sign off on it, we’re in good shape.

You’re going to submit that paperwork to your lender and they’re going to make sure everything’s cleared.

Here’s the thing: it’s not a VA inspector or VA termite person going out.

That’s part of your typical home inspection process.

The other big one that we see is sometimes a well inspection.

And here’s the thing with wells: just because you have a well doesn’t necessarily mean that you need to have a well inspection done for a VA loan.

Now, if it’s going to be the primary source of water that you’re drinking out of, that’s when the VA typically is going to have you have that well inspection done.

So, if it’s a water you’re drinking, that’s when you should know, “Oh, I have a well that I’m drinking that water. The VA might need to clear off on that.”

Again, the VA is not sending an inspector out.

You’ll have to coordinate with your real estate agent or with your inspector to get the inspection done, give it to your lender, making sure it’s reviewed, everything’s cleared and good to go.

If the well, though, is used for like watering the lawn and stuff, typically there’s no issue or need there.

Now, there could be other inspections that could ultimately be requested via your lender, but that’s usually more property-specific – if the property happens to have any random issues that are pointed out. They’re much more rare.

The biggest, most common one is the termite inspection.

And another note there, sometimes people assume that the seller has to pay for it, or someone else other than the buyer.

That rule changed just a year ago to where anyone can pay for that inspection, so that’s just perfectly fine if the seller, the buyer agent, the lender, whoever can pay for that if they want.

Now, there’s no restriction on it.

So, know that there’s a couple of those inspections that typically might have to be done, but it’s not the VA doing it.

You have to do that during the inspection process.

And you’re typically, when doing it, going to have a whole home inspection done.

And that’s separate from the appraisal, separate from the termite, and separate from well inspection, sometimes maybe done at the same time but usually different individuals.

I should say, some home inspectors, they might also do termite as well at the same time.

But that whole home inspection is usually where you’re going to hire a third-party person, you know, it’s Bob the inspector as I like to say.

Hey, they’re a jack of all trades.

They at least know when to tell you when something’s wrong.

They might not know how to fix it or exactly what it is, but like, “That’s just not right,” and then they help direct you to more specific niche people to get an idea if there’s issues with the home.

For example, a good whole home inspector, they’re going to be able to look at your roof, your siding, your window, your HVAC, all your major items, all the plugs, the light switches, all that good stuff, tell you if there’s an issue, and then you can investigate further with a specialist.

Because otherwise, think about it, if you’re buying a home, you gotta call up a plumber, you gotta call up a roofer, you gotta call up an electrician, you gotta call up all the trades.

That’s tough.

That’s why there’s a whole business of general home inspectors to help go do that.

But again, not a VA inspector. And technically, that whole home inspection isn’t a requirement from the VA.

So, when sometimes folks are like, “That VA inspector, that VA inspection, what is that?”

Well, there isn’t one.

There’s really the couple of needs that the VA needs on certain states and certain types of properties.

Again, the major ones, that termite inspection or the well inspection if it’s your primary source of water.

But then where most folks get hung up on is they’re thinking the VA appraisal and when the appraiser is checking the property for what are called the minimum property requirements.

I like to say it’s like their habitability check, making sure the property is effectively habitable.

And this is where, when your appraisal is being done, a VA appraiser, an actual person that is registered, certified with the VA, is going to come out and appraise your property.

So this is a normal appraisal that you’re having done, but it has to be done by a certain person directed by the VA.

Again, lenders don’t choose this person.

And that’s contrary to a lot of belief where conventional loans, lenders anyways, can’t pick individual appraisers.

They choose appraisal management companies to go do it.

But with VA loans, we request it to the VA and the VA directly hands it out to their own appraiser to come out and appraise a property.

And this is where they’re going to do that minimum requirement check.

And so, that’s where they’re going to do the appraisal value, look at the home, see if it makes sense and compares to other homes that are for sale nearby or that have sold and do their analysis just like a regular appraisal.

But they’re also going to look at the home and go, “Okay, if it’s caving in, we’re going to say that this is what’s called subject to fixing caving in the wall or big ones that we always see, peeling paint, windows not opening, massive defects with the house like a roof that’s just completely dilapidated.”

They’re not inspectors, so they’re not going to point out all these issues for you.

But they’re going to point out if there’s major habitability things.

They’re going to say, “Hey, I think this home is worth X, subject to these things being fixed.”

And that subject too is critically important because that all of a sudden becomes like an inspection list but really almost a requirement for the seller to fix.

And that is where the hang-up when people go, “Oh, the VA inspector.”

It’s not really usually the VA inspector.

It’s usually the VA appraiser has pointed out major items that need to be fixed to meet value for the property to make it worth it.

And then as your lender, like what we do, we need that appraiser to sign off on all those subject-to items.

So, that means it’s very important to pay attention to what that appraiser says.

And that’s where a lot of that hang-up can come for folks of, “Oh no, that VA inspector.”

It’s not that.

It’s technically the VA appraiser, typically, where folks end up seeing the issue and trying to work through what the VA appraiser needs to say that the property meets the minimum requirements for the VA and that the value that’s needed, that’s good for the veteran.

So hopefully that dispels a little bit of that myth of:

‘What is the VA inspection?’

‘How does that work?’

What do I need to do while I’m going through the inspection process?

Think of it this way: in most states, you’re going to need a termite inspection to make sure it’s cleared.

If you’re in states where that’s not much of an issue, reach out to me. I’ll gladly tell you which ones that is, then you don’t need to deal with that.

If it’s a well, you might need that inspection if it’s drinking water.

But then, so really, those are the two main ones that you need inspections done by third parties.

And then you’re probably going to want a third-party home inspection, completely separate from all the VA stuff.

You can do that or not do it.

Most people do to make sure they got a good home.

So that’s one that you can have done.

And then there’s the appraisal with a VA loan.

And that could lead to some potential repair needs to meet the value of the property, and that’s where most folks get hung up.

Now, some people assume that, “Oh no, that sounds like the VA appraisal process is going to be complicated. That can add an extra layer of complication to the deal.”

Well, the cool thing is that appraiser, unlike any other loan types, if they’re having issues with the value and stuff, they’ve got to pre-warn us.

You don’t get that on really any other loan type.

So, there’s some cool features to the appraisal process with the VA loan that you just don’t see anywhere else.

And I would argue that those benefits outweigh when they’re saying subject to some fixes.

The other thing is too, you can always request waivers for some of those fixes.

And we’ve gotten those cleared before.

That’s where it’s really important to work with a lender who understands that.

If you’re working with a lender that’s telling you, “Hey, we’re going to just pick our own management company,” – doesn’t happen on VA loans, it’s got to go direct to the VA.

Or if they don’t fully understand, “Hey, how we can do that waiver process or requesting reconsideration of value on properties,” – very niche things on VA loans. So that’s why we love working with that for our clients.

So, VA loan and inspections. Hope that demystified it a little bit. My name is Evan Kaufman, your VA loan originator. Take care.

How Much Should I Offer on a House?

matt — Thu, 04 Apr 2024 15:06:39 +0000

Transcript

My name’s Evan Kaufman, your VA loan originator. Here to help explain when you’re putting an offer on a home, there’s a couple of things that you can do to try to make sure you’re putting in the best value possible.

Number one, you want to be working with a real estate agent who can help you ideally evaluate a home’s value.

Sometimes people assume, ‘Oh, I need a full appraisal or whatnot.’

That’s typically going to be done during the home purchase process, where we as a lender are generally going to want to order an appraisal to make sure the value fits.

But in the beginning when you’re putting an offer in on a home, if you’re working with a quality real estate agent, you can generally ask them to do something called a comparable market analysis – sometimes referred to as a CMA.

And that’s where they’re going to pull comparable sales from around the home that you’re looking at, and they’re going to say, ‘Hey, based on these other homes with similar characteristics,‘ – and good ones might even have photos that they’re showing you or sending you, the old listing links so you can see what they look like, going – ‘Hey, all these ones around it, they were selling for x or y,’ making some adjustments based on the home you’re looking at because it might have new or this or it might be a little more outdated, changing things, ‘We think you should offer this much.’

A comparable market analysis will help you determine kind of the value of that home.

Now that’s just for understanding marketwise and getting a good, educated guess on where we think the value really should be on a home.

But there’s also the component that is your personal finances.

So, from that standpoint, if you’re looking at a home, let’s say it’s $400,000, and then all of a sudden, the value around it is showing you do a comparable market analysis with your real estate agent and they’re saying, ‘Great, it looks like 400’s reasonable, maybe somewhere between like 390 and 410 isn’t crazy and the value is probably within that range.’

You’ve got to still ask yourself, ‘Can I afford this? Do I want to afford this?’

And that’s where really working with our lender upfront, such as myself or there’s plenty of other good lenders out there too, but we’d love to work for you.

If you’re working with me, we’re able to go over the financing scenario so you can really get a picture on that specific property of what the monthly payments could look like, your potential cash due at closing in the closing costs all together, specific to the property.

Because remember, every property is slightly different than one another.

The closing cost on Property A are generally going to be a little different than closing cost on Property B.

And then working with a lender who can get you decent estimates is really worthwhile because sometimes people are surprised when all of a sudden they’re looking at that $400,000 home and they’re thinking it’s going to be so much, because they’ve been seeing data online and they’re looking on some online sources that are showing them random financing examples and then they come to find out it’s a little bit better than what they expected.

So, that house they’re going for, maybe they want to be a little more aggressive on it because the monthly payments could be less than they were expecting.

Or sometimes we see folks, especially when we work with VA buyers who are usually wanting to maybe go 5% or even no money down on their loan, they might be using online portals that are assuming 20% down, and that can drastically skew the monthly payments.

So, they’re a little surprised when they get their financing examples on specific homes because they were effectively underestimating how much that monthly cost could be.

So, know this: if you’re buying with a VA loan, you always want to account for how much you want to try to put down on that home and factor that into those online calculators.

So, there’s two ways that hopefully help determine how much you want to offer on a home.

It really comes down to doing that comparable market analysis and knowing your personal financial situation and what the monthly costs can look like as well as the cash you might need to bring to closing on that home.

My name is Evan Kaufman again, here to help you in most states with a VA Loan or conventional loan. Take care.

Can Buyer Agent Commissions Be Charged on a VA Loan? (Real Estate Commission Lawsuit Update)

matt — Tue, 26 Mar 2024 14:40:34 +0000

Transcript

Can buyer agent commissions be charged on a VA loan? My name is Evan Kaufman, your VA loan originator, here to help explain.

Now, with the recent lawsuits that the National Association of Realtors and some other major brokerages have had, they’ve tried to break up how agents are paid.

Now, no matter where that is all ending – and we’ll see where it all goes – there’s one major concern that we have for VA loans and VA buyers. And that’s the fact that the VA guidebook specifically states that buyers cannot be charged agent commissions.

So, think of it this way – in the past here, if you’re a real estate agent and you’re wondering, well, how has that been?

Well, think of it. If you’ve ever tried to apply a transaction fee charge of some sort, you’ve probably noticed that get knocked down by a lender because it is a non-allowable charge via the VA.

The VA has something that’s called a 1 percent fee rule on us as lenders. We can’t charge more than a total combined 1 percent in fees on a VA loan, unique to the VA loan.

And in a similar way, they have in their guidebook that the buyer cannot be charged agent commissions on a VA loan.

Now, I, first thing this morning, made the phone call to the regional VA office to ask just directly, hey, if this now is really going to affect it – because recently a settlement was reached between the National Association of Realtors and all the plaintiffs that happen to be suing them for an issue in a case, and now it looks like that there might be some changes to the verbiage of how buyer agents are paid.

And we’ll see where that all goes. But the basics of it are, there’s a possibility that buyers are going to have to start paying for their buyer agent commission and/or at least have the language changed to where it goes on their side of the documents at closing.

And that could impact VA loans.

So, calling the VA regional loan center, it was immediately just asking, what are the things that we might be seeing for changes on this?

Because if for some reason, let’s say that historically it has been that the seller is paying a certain commission amount – I like to say maybe like they put up the pot of commissions for the buyer’s agent and the seller agent – and it’s paid out of the seller proceeds.

Well, now all of a sudden, we’re going to say, “hey, part of that pot is paid by the seller. Part of that pot is paid by the buyers.”

That changes just the verbiage to where all of a sudden, the VA goes, oh no, that buyer pot is all of a sudden, a buyer agent commission.

And we’ve specifically said – that that can’t be charged.

Now, in the past, I believe that was there – as I’ve said in past videos – that was there to protect veterans because, the norm has been that it’s paid out of the seller’s side, so they didn’t want to see overcharges on veterans.

Well, now all of a sudden, if there’s a breakup and a change in that language, now the VA has got to potentially change that language.

So, make the phone call.

Regional Loan Center rep was fantastic.

By the way, if you ever got to call your VA Regional Loan Center, the past couple years, since we literally poured billions into the system, the past couple of years, the service has just become a lot better, and if you have bad service, just call right back.

You’re usually going to get someone that’s good. My history, and I call them every week, has been that it’s just gotten better and better.

Point is, the rep was very kind, very nice, but I can immediately tell when I brought up and said, hey, buyer agent commissions.

I know I asked this a few months back when all this started boiling up. Back then they didn’t really know what was going on.

Now they definitely knew. And it sounded like they had already had a few phone calls about it this morning. Immediate response was, “hey, we got till August when we see how all this is sorted, and our policy team is working on it.” So, we talked for a few good minutes.

It’s not like they could say a whole lot because I’m sure they don’t even fully know.

But they did say that the VA is very well aware of it and working to try to make sure that veterans can still have representation.

Now, what exactly does that look like?

Not quite sure.

The one thing that we did discuss – I had to ask the question – is that an actual act of Congress?

Because it’s with the VA loan.

And a lot of those big VA changes are a true act of Congress.

And they said, well, it actually might be.

So, it may mean that we need to see a quick move by Congress to help make this change.

But they’re exploring what their options are, like, hey, that they have control on making their own administrative changes versus having someone else within the federal government make sure that they rule on it.

The deal is they’re aware of it. And I got the comforting feeling that they’re on it to try to help make sure veterans still have representation.

So ideally what that looks like here in the near future is that they help clear up that ultimately on the VA, buyers can pay for their own agent commissions.

If they choose – the key is not forced to, right?

But again, that will allow them to continue to be represented if all of these new changes from the association of realtors come down and ends up being that buyers have to pay for that.

Because the VA loan is the one loan type that has that unique nuance where they are blatantly stating that the buyers cannot pay for real estate agent commissions.

And while I totally know it’s there to protect them from original or older system when sellers were paying for all commissions for the most part, that now that might need to change to make sure that buyers can still have representation.

Because the last thing we want are all of a sudden VA buyers left out in the cold and real estate agents saying, “oh my goodness, this VA loan type is terrible because no one can get paid as the real estate agent and the veterans left to defend for themselves.”

And that’s a very, very dangerous situation to be in.

So, I hope that the VA acts on this quickly to help make sure that veterans are taken care of well and protected still in what they have to pay for versus what they do not have to pay for, which it will be a little unique for them to sort that one out.

Because, think of it this way, the last thing you want, ultimately, are veterans paying a buyer agent commission – but then the seller also paying an agent commission, and all of a sudden people try to take abuse of the whole system, and it ends up getting charged up a whole lot.

That’s a scenario that I talked through with someone.

However, that scenario, if it were true, would be already happening on other loans and other loan types because they do not prevent buyers from paying for agent commissions, so I don’t think that’s likely.

But the reality is, we might need some changes in the verbiage from the VA to make sure that buyers can continue to have buyer agent rep. And I think that’s coming. And I know I can tell you, if you’re curious about it, they’re paying attention to it.

So, any questions on it, please feel free to ask.

We’re going to keep this updated and follow it very closely, because we want to make sure that vets still have their representation when they’re trying to go buy homes.

My name is Evan Kaufman, your VA loan originator. Hope this helps you go out there and win a home with a VA loan. Take care.