Videos – WeVett

Why School Districts Matter for Military Families (Even Without Kids)

matt — Fri, 29 Aug 2025 17:34:26 +0000

Why School Districts Matter for Military Families (Even If You Don’t Have Kids)

My name is Evan Kaufman, your VA Loan Educator. Today I want to talk about the importance that school districts can have on home values—even for military families who don’t currently have children in school.

How School Districts Affect Home Values

When you’re purchasing a home, there are many factors that can drive home values. Some of the most common include:

Population growth in the city.
Major employers in the area.
Location relative to those employers.
Proximity to amenities like parks, libraries, and shopping.
Proximity to schools—and importantly, the quality of those schools.

That last factor—schools and school districts—can have a major impact.

Why School Ratings Matter

Now, real estate agents and lenders aren’t supposed to tell you directly whether a school is “good” or “bad.” But you can find that information for yourself through sites like Niche.com, GreatSchools.org, or other school rating platforms.

Generally, higher school ratings correlate with higher home values. So when you’re looking at a home, don’t just consider how close it is to a school—think about the quality of the schools nearby.

Here’s the key:

You may not care about school ratings right now if you don’t have kids.
But a future buyer of your home very well might.
To appeal to the widest audience of potential buyers, it’s smart to consider school ratings now, even if it doesn’t directly affect your family.

Buying Without Kids: What to Consider

If you don’t have kids, you may not need the highest-priced home in the best-rated district. A lower-priced home in a different district could still work well for you.

But you should still ask:

Will this home be attractive to families in the future?
Does the school district rating make the home more or less desirable?

Even if you personally don’t need top-rated schools, remember that resale value is influenced by how future buyers see the property.

Exceptions to the Rule

Now, is this always the case? No.

There are exceptions:

Areas with many private schools — Public school ratings may not matter as much if families choose private education.
Older demographics — In areas where fewer families have kids at home, school ratings may not impact value as heavily.
Unique market demand — Some neighborhoods with lower-rated schools still have very high home values because of location, lifestyle, or other factors.

Also, school districts can change over time. Ratings may improve, sometimes dramatically. Some buyers even speculate by purchasing in an “up-and-coming” district, hoping that rising school ratings will boost home values later.

Key Takeaway for Military Families

Military families often move every few years. Even if you don’t have kids now, it’s important to consider school districts when buying a home.

Why? Because:

It helps protect your resale value.
It ensures your home appeals to a wider pool of future buyers.
It could even position you for long-term appreciation if the district improves.

So as you PCS, keep in mind: school districts matter.

Final Thoughts

We’re heading into a new school year—it’s already August, and schools are starting soon.

I hope this was valuable for you as you think about your next move.

Again, my name is Evan Kaufman, your VA Loan Educator.
Take care!

Top 3 VA Loan Benefits in 2025

matt — Fri, 29 Aug 2025 17:25:07 +0000

What Are the Three Best Features of the VA Loan?

One of them is really like two in one. Then we’ll talk about number two. And the last one is the one that can save you money and really help you pay your home off early, if you choose to.

1. No Private Mortgage Insurance (PMI) — Even With 0% Down

The first big feature of the VA loan is that there’s no private mortgage insurance (PMI), even if you put less than 20% down. In fact, you can go all the way down to 0% down, and there’s still no PMI.

Why is that? The full name of the VA loan is the VA Home Loan Guarantee. That word guarantee is key. The VA doesn’t actually lend you the money—it guarantees a portion of the loan to the lender.

For example, if we originate your mortgage, we’re funding it, but the VA guarantees up to about 25% of any potential loss if you default. That built-in guarantee acts like an insurance policy. Because of that, lenders don’t require PMI on VA loans.

So, whether you’re putting 0% down or 10% down, you don’t have the added cost of PMI. That can be a huge monthly savings compared to conventional loans.

2. More Competitive Interest Rates

The second major benefit is that VA loans often come with more competitive interest rates compared to conventional loans.

A common concern I hear is: “If I use a VA loan, isn’t my interest rate going to be higher?” The answer: No, it shouldn’t be.

Here’s why: Investors actually pay more for VA loans on the secondary market. That means lenders make more money selling a VA loan than a conventional loan at the same rate. Because of that, VA loans should be priced better.

Unfortunately, some lenders don’t pass that savings on—they keep the extra margin. But lenders like us who streamline VA loans are able to pass that through, which results in lower interest rates for veterans and service members.

The difference can be big. Sometimes it’s just a quarter of a percent, but I’ve seen spreads as wide as 1–1.5%, and in rare cases even 2%. For example, instead of a 7% conventional rate, you might get 5.5% on a VA loan. That’s a major long-term savings.

So, if you’re not being offered a better VA rate, make sure you’re working with a lender who truly understands VA lending.

3. Streamlined Refinance – VA IRRRL

The third major feature is the streamlined refinance, officially called the Interest Rate Reduction Refinance Loan (IRRRL)—often nicknamed the “VA IRRRL”

This is one of the most powerful long-term tools of the VA loan. With an IRRRL, you can refinance to a lower rate with:

No appraisal
No income documentation
Usually just a soft credit check

As long as you can drop your rate by at least 0.5% and 210 days have passed since your first mortgage payment, you may qualify. VA also requires the refinance to recoup costs within 36 months, though in most cases, it’s much faster.

What makes this so impactful is how it ties into what we call our “Client 20-Year Vision”—having a home paid off or nearly paid off by retirement.

Here’s how: if you refinance through an IRRRL and save, say, $200–$300 a month, you can apply that savings directly to your principal. That accelerates your payoff, sometimes chopping years off your mortgage while keeping your monthly payment about the same as it was before.

We even use a tool called Rate Radar that tracks when our clients become eligible for a VA streamline refinance. That way, we can let you know the moment you can save money and pay off your home faster.

Recap

So, what are the three best features of the VA loan?

No PMI — even with 0% down.
More competitive interest rates — lenders get paid more for VA loans, so you should too.
Streamlined refinance (IRRRL) — a fast, low-cost way to lower your rate and pay off your home early.

My name’s Evan Kaufman. I hope this helped explain the three big benefits of the VA loan. Take care!

August 2025 Mortgage Update: Fed Drama, Slowing Demand & Meme Stocks

matt — Fri, 29 Aug 2025 17:19:12 +0000

Mortgage demand just hit its summer slump.

It was confirmed. Let’s talk about it.

My name’s Evan Kaufman, your loan originator, here to give you an August update. We’re going to go over three major things that we’re seeing in the market right now that are moving interest rates and just plain interesting in real estate.

Number one, we’re going to talk about Fed Chairman Powell and the talk about him potentially being fired by President Trump.

Number two, we’ll talk about the summer low—how it was confirmed. I’ve talked about it in some other videos, but mortgage application data came out showing that applications slowed down in July.

And lastly, we’ll look at Opendoor meme stocks. This one’s interesting, with a little twist on a unique event. If you know about the GameStop meme stocks back in 2020 and 2021, something similar has happened in real estate.

So, let’s start with the first one: Jerome Powell, our Fed chairman, and the idea of him being fired by President Trump.

For the last couple of months, there’s been news insinuating that the president has been pushing Powell to lower interest rates. There have been a lot of public statements and pressure from the White House saying, “Hey, we need to lower interest rates. Look at what’s happening in the market.”

That push isn’t necessarily crazy—economic data has been mixed. Some data has been weaker, but a lot of it has still been relatively strong. That means you could argue for lowering rates, or for keeping them the same, and either way the economy would probably stay on track. Many other countries have already pulled back their Fed funds rates, so the White House is looking at them and saying, “We should follow suit.” Maybe yes, maybe no.

The thing is, U.S. economic data overall has been strong. There have been weak points, but generally strong. So, I understand the push and pull. But more recently, there have even been outright calls for firing Jerome Powell, which is very unusual. It’s not completely unheard of, but it would be extremely rare in modern times for a president to fire the Federal Reserve chairman.

What has that meant for mortgage rates? It’s created uncertainty. And uncertainty tends to raise rates. When investors—those buying U.S. treasuries, which heavily influence the mortgage market—get spooked, they demand a higher yield.

That means big investors, whether foreign or domestic, buying up 10-year Treasury bonds (which lenders like us use to hedge mortgage bets), are saying, “We’re more uncertain about the U.S. economy right now. We need a higher return.” And in turn, that raises mortgage rates.

So even if the Federal Reserve lowered the Fed funds rate, uncertainty could still push mortgage rates higher. That’s what we’re seeing right now. This whole “fire or not fire” discussion around Powell is creating instability, and ironically, instead of lowering rates, it’s pushing them higher.

Number two: the summer lull. Sure enough, in July, we saw some of the largest drops in mortgage applications. I mentioned in a few videos back that we typically see a summer lull where things slow down—usually around the Fourth of July. It’s like the “Christmas” of the mid-year, when people take a break from home shopping. Fewer applications, less activity.

The data that just came out confirms it. Mortgage applications slowed down, and we’re also seeing inventory expand. For example, homebuilders now have nearly 10 months of supply—around 9.8 months according to a recent survey. That’s a lot of inventory compared to just a couple years ago when it was a third of that or less.

So, yes, we’ve hit the summer lull. But that also might mean there are some good deals if you’re still looking to buy.

Lastly, number three: Opendoor meme stocks. If you remember GameStop meme stocks and the “to the moon” craze, where people online—Reddit forums, blogs—pushed GameStop’s stock up just to squeeze Wall Street, something similar just happened in real estate.

Opendoor, which was an “iBuyer” company (they’d buy your home with cash based on an algorithm, then resell it), was almost bankrupt but managed to hang on. Recently, it became the target of meme stock traders. Its stock price shot up dramatically, then quickly crashed back down because the fundamentals of the company hadn’t actually changed.

It’s just a quirky, unexpected event: a real estate company turned meme stock. That’s something we don’t see very often.

Well, that’s our August update. My name’s Evan Kaufman, your loan originator, here to help guide you through. As we head deeper into August, I think we’ll get a better picture of what the last half of the year will look like, and I’ll keep you updated.

Thanks for watching. Take care.

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!

June 2025 Mortgage Market Update

matt — Thu, 26 Jun 2025 17:52:06 +0000

June 2025 Mortgage Market Update

The month of June 2025 is kicking off to be a very exciting one.
Looking back at May, we saw some major shifts in the market—and now, I think we’re going to see those continue into June.

We’re going to cover three big topics in this update:

Tariff Cooldown
Post-Spring Application and Inventory Trends
GSE Privatization Developments

1. Tariff Cooldown

Since the election and President Trump’s return to office, we’ve seen a lot of tariff volatility—on again, off again.
This back-and-forth movement defined much of May, and now heading into June, we’re starting to see something new:

Not necessarily a cooldown, but a normalization.
People are becoming more accustomed to the tariff whiplash, so the market’s response has been less dramatic.

Even if tariffs are activated or removed, the shock factor is lower now.

That said, the long-term consequences of the tariff shifts—positive or negative—are still unknown.
I expect continued uncertainty, but not quite as extreme as what we saw in April and May.

2. Post-Spring Application & Inventory Cooldown

As we head into mid-summer, we often hit what I call a “midsummer lull.”

Just like the stock market tends to slow down when traders head to their summer homes, the housing market also tends to cool slightly.

We typically see:

January & February: Mortgage activity begins to ramp up
March, April, May: Heavy-hitting months for applications
June & July: Still active, but starting to cool

Especially for military families, moves can start earlier in the year. But by June, we start seeing purchase application momentum stall, which is exactly what we’ve seen over the past couple of weeks.

Inventory Watch:

Housing inventory is now at its highest point in 2025
We’ve broken 800,000 active listings
Still historically low, but much higher than we’ve seen in the past 6–18 months

This could mean buyers are cooling down, but sellers are still listing, contributing to an inventory increase that matches the seasonal lull.

3. GSE Privatization

Now onto the big conversation that’s emerged in recent weeks:
Privatization of the GSEs (Government-Sponsored Entities).

What Are GSEs?

Fannie Mae & Freddie Mac
They purchase and securitize the majority of conventional, FHA, and VA loans
Backed by the federal government since the 2008 financial crisis

Prior to 2008, these were private companies. But after they collapsed, the government took control, placing them under conservatorship.

What’s New?

President Trump and FHFA director (Pulte) have begun discussing removing the GSEs from conservatorship
This would privatize them again and return them to independent status

Why This Matters:

Privatizing GSEs introduces a lot of uncertainty. There are strong arguments on both sides:

Pro-Privatization:

Could increase competition in the secondary mortgage market
New players could drive lower rates through innovation and pricing power

Against Privatization:

GSEs currently benefit from implied government backing
That backing keeps U.S. mortgage rates among the lowest in the world
Removing it could raise rates, as investors would demand higher risk premiums

We don’t yet know where this will go—but for the first time in a long time, these conversations seem to have momentum.

Is It Serious?

It’s hard to say.
This might be another situation like tariffs—a lot of talk, but not necessarily real movement.

Still, with both the President and the FHFA Director pushing the idea, we could see some traction.

That said, many in Congress—especially Democratic Senators—are cautioning against moving too fast.

They argue that such a massive structural change to one of the largest financial operations in the world—the mortgage system—should be handled slowly and carefully.

“Quick moves could break things,” they say.
And I agree—we’re talking about trillions of dollars in loan volume.

So, will it happen?

Maybe.
But even if it does, it will likely take months—if not years—to complete. And there’s always a chance it doesn’t happen at all.

Summary: What We’re Seeing in June 2025

Tariff volatility is calming—not gone, but less shocking
Spring mortgage applications have plateaued, and
Inventory levels are rising with the midsummer lull
GSE privatization talks are heating up, but much remains to be seen

My name is Evan Kaufman, your VA loan originator.

Thanks for tuning in to this month’s Mortgage Market Update.
Take care, and I’ll see you next time.

The Dangers of Builder Credits

matt — Thu, 26 Jun 2025 17:40:20 +0000

What Are Some of the Dangers of Large Builder Credits?

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

Recently, some folks have been getting very large builder credits when purchasing a home. Let’s say a home builder is selling a home for $500,000 (a general range for new builds around the country), and they’re offering something big—like a 6% or 7% builder credit (sometimes referred to as a seller credit).

That could amount to $30,000 to $35,000 or more in builder credits to help buy down interest rates—or use however the buyer wants.

Sounds great, right?

Let’s talk about:

Why builders are offering those credits, and
What dangers you need to be aware of if you’re using them

Why Are Builders Offering Large Credits?

I grew up in a family of builders, so I understand this well.

Builders offer these credits primarily to:

Move inventory quickly, especially if a home has been sitting for a while
Incentivize buyers during slower markets or when interest rates are high

When demand slows or surplus builds up, builders increase incentives like credits rather than lowering the sale price, which is key to what we’ll talk about next.

The Appraisal Problem

Here’s where it starts to get risky for buyers:

In a new build community, appraisers typically use other recent new build sales as comps (comparable properties). If homes have been selling at $500,000, appraisers will try to confirm the value by comparing it to similar sales at that price.

But here’s the trick: builders want to keep the sales price high (like $500,000) to protect the community’s appraised values, even if the market value is closer to $475,000.

So instead of lowering the sale price, they offer huge credits—e.g., “$25,000 builder credit”—to keep the official price at $500,000 but sweeten the deal.

Appraisers should adjust for this, but it’s not a perfect science. And this leads to a danger:

Danger #1: Resale Risk / Being Underwater

Let’s say:

You buy a home at $500,000
You receive a $25,000 builder credit
You use that credit to buy down your interest rate

Great! But what if:

You get relocated (military PCS, job change, etc.)
You have to sell the home a year or two later
The market value is really $475,000, not $500,000

You may now find yourself underwater—you owe more than the home can sell for.
And unless you can offer a $25,000 credit (like the builder did), it likely won’t fetch the same price.

Pro Tip:

Work with a real estate agent independent from the builder who can run a proper comparative market analysis (CMA) on:

Similar resale homes (not just new builds)
Homes built by the same builder but now being resold

This gives you a realistic view of the true market value.

Danger #2: Misleading Value from Rate Buydowns

Let’s say you use that builder credit to buy down your interest rate by 1–2 percentage points. Sounds good, right?

Not so fast.

Here’s what you need to analyze:

Are those points worth it?
What’s the payback period?

Quick Recap on Points:

1 point = 1% of loan amount
Points do not reduce your interest rate 1-for-1
There’s diminishing return the more points you use

Example: If you use a large builder credit to buy down your rate and it takes 10–15 years to break even based on monthly savings… and you only plan to stay in the home for 3–5 years…
That’s a poor investment.

And Here’s the Bigger Problem:

If you use all that credit to buy down your rate but later need to sell the home:

The new buyer doesn’t benefit from your low rate
The credit is gone
And again, you may be stuck underwater

So ask yourself:

“Is this buy-down worth it? Or is it just making the monthly payment look prettier?”

Alternative Uses for Builder Credits:

Instead of using the full credit to buy down your rate, consider:

Using part of it for home enhancements
(Only if it genuinely increases property value)
Paying off other debts (especially with VA loans)
Negotiating a lower sale price
(Tougher with builders, but worth asking)

Final Thought: Don’t Be Fooled by 0%

Here is a car analogy – think about how car dealerships offer 0% interest for 5 years when standard interest rates are 5–8%.

How do they do that?

It’s baked into the price.
Homes are no different.

If a home sounds like it comes with a too-good-to-be-true rate, ask:

“Where’s that being made up?”

What Should You Do?

Run a payback analysis on the rate buy-down
Look at comparable sales (not just builder pricing)
Ask how long you plan to own the home
Explore other ways to use the credit wisely

Builder credits can still be great.
They just require careful analysis and strategy.

If you’re facing this scenario and want help analyzing whether it’s a good deal:

Reach out. I’m happy to help.

My name’s Evan Kaufman. Take care.

ARM vs Fixed Rate Mortgage: Should You Roll the Dice in 2025?

matt — Thu, 26 Jun 2025 17:29:11 +0000

What Is a Bad ARM, a Good ARM, and How Can They Help or Hurt Me?

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

We’re talking about Adjustable Rate Mortgages, otherwise referred to as ARMs.

Here’s how we’ll break it down:

Old ARMs vs. New ARMs
ARMs vs. Fixed-Rate Mortgages
The pros, the cons, and how to evaluate if an ARM is right for you

Old ARMs vs. New ARMs vs. Fixed Mortgages

Most people these days—and in recent years—have used fixed-rate mortgages.
You’ve likely heard of the 30-year fixed—that’s the most common—followed by the 15-year fixed.

With a fixed mortgage:

Your interest rate stays the same for the entire term.
It’s simple, reliable, and still the most common type of mortgage today.

So, What’s an ARM?

An ARM, or Adjustable Rate Mortgage, is just that:

A rate that can change—it adjusts over time.

But let’s be honest—when some people hear “ARM,” it triggers memories of pre-2008, when they were scary.

Old ARMs (Pre-2008):

Unregulated
High risk
Interest rates could jump significantly in just 1–3 years
A major contributor to the 2008 housing crash

New ARMs (Post-2008):

Today’s ARMs are very different. They are:

Highly regulated
Equipped with caps and predictability
Much safer for borrowers

Let’s dive into how they work and how to analyze them.

How to Read ARM Numbers (e.g., 5/1/1/5 or “5/1 ARM”)

You’ll often see ARMs represented by three or four numbers. Let’s take 5/1/1/5 as an example:

First number (5):
How many years your rate is fixed. In this case, 5 years.
Second number (1):
How many times your rate can adjust per year after the fixed period.
Third number (1):
The maximum amount the rate can increase or decrease in one year.
Fourth number (5):
The maximum amount your interest rate can increase over the life of the loan.

Example: 5/1/1/5 ARM

Fixed at 5.5% for the first 5 years
After year 5, it can adjust once per year
The rate can go up or down by no more than 1% per year
The rate can never increase more than 5% total, meaning a max of 10.5%

If rates skyrocket to 15% in 10 years, you’re still capped at 10.5%.

If rates drop to 4%, your rate could adjust down to 4.5%—but no more than that 1% per year.

Why ARMs Haven’t Made Sense (Until Recently)

Over the last 15 years, ARMs often didn’t make sense because:

Interest rates were at historical lows — Why risk an ARM when you could lock in 3–4% for 30 years?
We had an inverted yield curve — Short-term loans actually cost more than long-term ones.

This meant that ARM rates were often higher than fixed rates, making fixed the easy choice.

What’s Changed?

Two big things:

Rates have gone up — We’re no longer at those record lows.
The yield curve is normalizing — ARM rates are now more competitive.

Today, ARMs can be 0.5% or more lower than fixed-rate options.

So, When Might an ARM Make Sense?

Ask Yourself These 4 Questions:

1. How Long Will I Keep This Home?

If the ARM is a 5/1, and you know you’ll sell or refinance in 4–5 years, you’ll never even reach the adjustment period.

Military? Short-term assignment?
Not planning to keep the home long-term?

Then an ARM might be a smart choice.

2. What Direction Do I Think Rates Are Going?

If you believe rates will:

Go down → an ARM might allow you to ride that drop.
Go up → then you’ll want to lock in while you can.

Today, rates are higher than recent history, but still below long-term historical averages.
So if we face economic slowdowns, we may see rates drop—and ARMs might allow you to benefit without refinancing.

3. What’s My Risk Tolerance?

I like to call this your “roll the dice” factor.

Risk-averse? You may want the peace of mind of a fixed mortgage.
Willing to take a calculated gamble? An ARM could pay off—especially with a clear short-term exit strategy.

Remember, new ARMs are not the dangerous products of 2008.
But they still require careful analysis.

4. What’s the Rate Spread?

If the ARM rate is higher than the fixed rate → skip the ARM.
If it’s ~0.5% lower or more → strongly consider it.
Even 0.25% lower could be worth it if you’re certain about moving or refinancing before the adjustment.

In Summary

When comparing ARMs vs. fixed-rate mortgages, here’s what to evaluate:

Do you plan to sell or refinance before the adjustment period?
What’s your comfort level with rate adjustments?
Is the ARM rate lower enough to justify the risk?
Where do you think rates are headed?

My name’s Evan Kaufman, and I hope this helped you better understand the good, the bad, and the strategic use of ARMs.

Take care!

How Do Dependents Impact the VA Loan?

matt — Thu, 26 Jun 2025 17:21:09 +0000

“I had another kid—how’s it going to impact my VA loan?”

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

So—kids, or let’s just say adding dependents—can those really affect my VA loan qualifications?

Yes, they can, and we’re going to talk about two major reasons or areas where it impacts you.

1. Residual Income (The Less Positive Impact)

First, we’re going to talk about residual income, which is a key part of qualifying for a VA loan.
Then second, we’ll talk about a more positive angle that can actually improve your qualification.

So let’s start with residual income.

You’ve probably heard the term debt-to-income ratio (DTI). It drives a lot of decision-making in mortgages. That’s where we take your total monthly debts, divide them by your total monthly income, and get a percentage. That ratio determines your general borrowing ability.

Now, with VA loans, there’s an extra component that’s unique compared to all other loan types:
It’s called residual income.

Yes, DTI still matters. However, the VA really focuses on this concept of residual income to make sure a veteran still has enough breathing space to comfortably afford the home.

That’s why, in other videos, I’ve said that you can sometimes have a higher DTI ratio with a VA loan than with other loan types—because they’re looking more at residual income than just DTI.

Residual income isn’t a simple calculation. It factors in:

Your taxes
The square footage of your home
Your region of the country
And—your family size

So yes, the number of dependents you have can affect your qualification for a VA loan.

Again, this isn’t necessarily a negative, but it does decrease your borrowability slightly. We’ll get to the positive side in a moment.

How Does It Work?

There’s a chart the VA publishes each year showing the minimum required residual income for different regions of the country—broken out into zones like the Southeast, Southwest, etc.—and by household size.

For example, if you’re a family of two, there’s a certain minimum monthly amount of income you need to have left over (after debts, taxes, etc.) to qualify.
If you’re a family of four, that number goes up.

So effectively, the VA is saying:

“This is the minimum amount of money we need to see you retain after all expenses to ensure financial stability.”

The more kids you have, the higher that required number goes.

Now—don’t worry—this doesn’t mean “Don’t have a kid” before applying for a VA loan.
It’s not a massive increase, and we’re definitely not trying to implement population control here!

(I love kids, by the way—I’ve got four of them!)
We just want to make sure you’re aware that if your loan officer is asking for clarification on dependents, it’s because it impacts your VA loan qualification.

And if you undermark the number of dependents—or you skip that field thinking, “Ah, it doesn’t really matter,”—you could be in for a surprise later.
It could even jeopardize your loan if the information has to be corrected mid-process.

So always make sure the number of dependents is accurate, because that directly affects the residual income calculation for your VA loan.

2. VA Disability Compensation (The Positive Impact)

Now, here’s the positive side:

For veterans who have VA disability income, adding a child can increase that income.

If you’re receiving VA disability compensation and you have another child, you can apply to add that dependent to your claim.

Doing this will result in additional monthly income—and that can make a meaningful difference in your loan qualification.

We’ve seen folks going through the home search process have a child and then update their VA disability claim. They get an extra $60 to $90 a month, sometimes more.

That additional income could translate to thousands of dollars in extra borrowing power over the life of the loan.

So if you receive VA disability compensation, don’t forget to file that update for every new child. Work with the VA to make sure it’s added.

Summary

So there you have it—the two ways kids (or dependents) can impact your VA loan qualification:

Residual income requirements go up slightly with each dependent, which can reduce your borrowing ability.
VA disability income can go up with each dependent, which may improve your borrowing ability.

My name is Evan Kaufman, your VA loan originator.
Take care.

What is the Latest with Credit Ratings?

matt — Thu, 26 Jun 2025 17:12:27 +0000

Moody’s Finally Downgrades the U.S. Credit Rating

Recently, Moody’s was the last of the major credit rating agencies, and there are three of them, to downgrade the United States’ credit rating.

Now, we’re going to talk about:

What does that actually mean?
How can that really impact your mortgage rates?

What Does It Actually Mean?

When you downgrade a credit rating, think of it kind of like, in the personal world, your credit score or credit rating.

Effectively, the last major credit rating agency finally said:

“Hey, the United States… it’s like you went from a mid-800 score to maybe 799. Now you’re in the high 700s.”

So, if you kind of pin the two side-by-side, that’s the idea.

Ratings for sovereign nations go from AAA (a perfect rating) to AA1—which means you’re one step below a perfect credit rating.

Moody’s had held the AAA rating the longest. Back in 1919, we believe, is when they originally gave the U.S. its AAA rating. And now they’ve finally downgraded it—the last holdout of the three major agencies to do so.

The other two had already downgraded the U.S. in the past. It happened back in 2011 or 2009, when we actually saw a downgrade. It later came back up… and then back down again. But for Moody’s, this is the first time they’ve moved the U.S. from AAA to AA1.

How Does This Impact Mortgage Rates?

So how does this actually impact mortgage rates—or just the general creditworthiness of the United States?

By downgrading the credit rating, what that means—putting on my economics hat—is that now the U.S. may have to pay more to borrow.

Think of it again in personal terms: when your credit score goes down, it generally means you pay higher interest rates when borrowing for things like cars, houses, etc.

At a national level, downgrading from AAA to AA1 means that if the U.S. wants to borrow money (usually in the form of Treasury bonds), it might have to offer higher interest rates to attract lenders.

Now, some folks reacted by saying:

“Oh my gosh, it’s going to increase rates dramatically. Treasury yields are going to go way up.”

But remember—Moody’s was the last of the agencies to do this. The other two had already downgraded, so much of that risk was already factored in.

Why Did Moody’s Finally Downgrade?

So why did Moody’s wait so long and finally act?

It was due to recent fiscal uncertainty and concerns over monetary policy in Congress. That gave Moody’s the reason to say:

“Hey, we’re going to cut this back.”

Their wording was effectively that Congress is struggling to maintain a long-term balanced budget, and that’s a risk to the future repayment of U.S. debt. So they decided to lower the rating.

Think of it again like this: someone is rating your personal credit and says:

“Okay, right now you’re making some poor financial decisions, and your future budget planning doesn’t look solid. We’re going to lower your score a bit.”

Which means: you have to pay a little more, because there’s a little more uncertainty about your future.

How Does That Affect You?

Tying this back to what we deal with all the time—mortgages—this generally means we could see higher interest rates on mortgage loans.

In fact, right after the announcement from Moody’s, rates did rise a bit.

Now, it wasn’t as extreme as it would have been if all three agencies downgraded at once, but since the other two had already acted, the market had partially priced this in.

Still, it had an impact.

The Bottom Line

Now you understand a bit more about how credit agency ratings affect the U.S.’s ability to borrow—and how that translates to mortgage rates going up.

Effectively, all the agencies are telling the world:

“We see a bit more uncertainty in the U.S.’s ability to repay its debt.”

So global lenders say:

“Okay, cool. We’ll still lend you money—it’s still a high rating—but we’re going to charge a little more for the risk.”

From AAA to AA1 is still a very strong rating. But it’s kind of like going from an 800 credit score to 790 or 799. Still very good—just not quite as excellent.

My name’s Evan Kaufman.
Hope this helped explain things.
Take care.

Do VA Appraisals Cause Problems?

matt — Tue, 06 May 2025 14:55:36 +0000

I’m using a VA loan — or I’m a home seller and I’ve accepted a VA loan offer from the purchaser — what are things I should look out for in the appraisal process?

My name’s Evan Kaufman, your VA loan originator, here to help walk us through this.

From the Buyer’s Perspective

So first, we’re going to look at things you should know from a buyer’s perspective — what to be aware of when you have your appraisal done.

Then we’ll flip it and look at it as a seller — what are some things you need to be ready for?

First up, I want to make sure everyone understands something:
Sometimes people assume that the VA loan comes with some kind of VA inspection to make sure the home can appraise properly. That is not the case.

The VA does coordinate an appraisal, and there are specific VA appraisers.
But here’s the thing — they’re just regular appraisers. Most of the time, they’re doing other appraisals as well. They just happen to have a VA designation.

So when people say, “Oh no, we’ve got to bring in this certain person from somewhere,” — no, it’s usually just the general appraisal population, and they’ve been approved to do VA appraisals.

The VA sends them out, and they perform a standard appraisal.
But on top of that, they do something I like to call a habitability check, where they’re looking at some Minimum Property Requirements (MPRs).

We actually have a great blog post that outlines these minimum property requirements in detail — but know this: it’s not a home inspection.

So, if you’re a buyer, be aware:
A VA appraisal — even with the MPRs — is not a substitute for an actual home inspection.

Common Issues VA Appraisers Look For

What are they looking for?

Some of the most common items we see:

Peeling paint
Windows that don’t open properly
Random safety issues

As I always like to say: If there are no holes in the walls, you’re probably going to be okay.

Other things that get flagged often:

Exterior railings missing, especially on steps
Trip hazards or other obvious issues

If you’re buying a newer home, we rarely see anything called out.
In fact, most VA appraisals come back as “as-is,” meaning they’re good to go with no changes needed.

But remember — MPRs can vary based on the appraiser. They each follow a standard code, but how detailed they are can differ. So again, don’t skip your home inspection.

Now, Let’s Talk to Sellers

Let’s put our seller’s cap on.
You just accepted a contract, and it’s a VA loan. You might be thinking:

“Oh no, I was told there’s a VA inspection. What is that?”

Well, good news — it’s not a traditional home inspection.
In fact, it’s less of an issue and typically less of a burden than a buyer’s inspection.

Again, the VA doesn’t conduct a separate “inspection.” They coordinate an appraisal that checks minimum property standards, but it’s not meant to nitpick like a full-blown inspection might.

If your home is newer — especially post-1980s or 1990s — we rarely see issues.
Sure, there are occasional exceptions, but they’re uncommon.

If your home is older but well-kept, again, we usually see no issues.

Just be aware, the most common red flags are:

Peeling paint
Window functionality
Major cosmetic damage (e.g., holes in walls, missing fixtures, ceiling damage)

Again, it depends on the appraiser, but don’t be afraid of it.

Timing: Appraisals and Inspections

In many cases, we schedule the VA appraisal alongside the inspection.
That way, you get everything — any issues — discovered around the same time.

Just keep in mind:
A home inspection is going to be far more thorough than what any VA appraiser will call out.

Bonus: The “Tidewater” Rule

Here’s a cool kicker about the VA loan and appraisal process.

While, yes, there are those habitability checks — and they can differ a bit from conventional — the conventional loan process can flag issues too. If there are glaring problems, they’ll either reduce the appraised value or make it “subject to” certain repairs.

But the VA loan has one unique advantage:
It includes a process called Tidewater.

We’ve got a great video on this — or just search for “Tidewater” on our YouTube channel or website.

Here’s how it works:

If the appraiser is having trouble valuing the property — meaning they think it may come in low — they are required to notify the lender before finalizing the report.

This gives the lender and agents an opportunity to submit additional comps or information that may support the contract value.
No other loan type allows this kind of access or communication with the appraiser.

Why It Matters

For buyers, that means you’re less likely to get blindsided by a low appraisal.
And for sellers, it gives you a chance to defend the value before losing the deal.

It helps avoid those awkward situations where a home underappraises, and the seller just says, “Too bad,” or the buyer has to come up with a lot of extra cash.

The VA loan helps mitigate that, thanks to the Tidewater process.

Final Thoughts

So, those are some of the unique things about the VA appraisal process, and what to expect if you’re a buyer or a seller.

My name’s Evan Kaufman, again — your VA loan originator.
Thanks for watching.

Take care.