Ask Erin: VA Loans

With 100% Financing programs disappearing, VA Loans are making a comeback. Over the last few years, the conventional 100% Financing programs offered by banks and other lenders had better terms than most VA Loans…

In the last couple weeks, I have had many prospective clients ask me about VA programs. A few pointers:

-Make sure you are indeed eligible! Here is a link to the general eligibility guidelines per the Department of Veterans Affairs: Many people do not know that you may be eligible if you served with Allied US Forces, if you are the spouse of a POW, the un-remarried spouse of a veteran who died in service, etc.
-Make sure you obtain a Certificate of Eligibility from the Department of Veterans Affairs by completing form 26-1880. This can be done at
-Obtain or locate any paperwork in regard to your most recent discharge or separation papers covering active military duty since September 16, 1940.
-Make contact with a local loan officer who works with VA Loans…if you are a regular reader of this blog, you will know that I recommend Marlena Olson with the Vitek Mortgage Group. She has worked with my clients who have used VA Loans, and she can be reached at 916-486-6900.


Reverse Mortgages

I found a good article on reverse mortgages that provides some useful info…

Cash-hungry retirees look to reverse mortgages
Despite benefits, disadvantages exist
by Robert J Bruss

If you (or someone you know) admit to being at least 62 and own your principal residence house or condominium, and if you can use more tax-free cash: read on. However, if you are just plain snoopy, unless you fit the aforementioned profile, this article isn’t for you. Now that I have aroused your curiosity, you probably wonder what I am going to reveal.

As thousands of baby boomers decide to retire every day, many suddenly realize they don’t have enough income to provide for a comfortable lifestyle. Meager Social Security income certainly isn’t the answer.

But there is an easy solution. It’s a reverse mortgage, which can provide lump sums of cash for any purpose (such as a new roof, new car, trip around the world, bill payoffs, or something frivolous), a credit line for emergencies or investments (except in Texas), or lifetime monthly income even if you live to 110.

Or, you can select any combination of the above. The best part is tax-free reverse-mortgage money never needs to be paid back as long as you live in your principal residence. Also, there is no personal liability.

Even if your home plummets in market value, the reverse-mortgage lender must honor its agreement and can never force you out of your home (as long as you live in the home and pay the property taxes and the homeowner’s insurance).

WHAT IS A SENIOR-CITIZEN REVERSE MORTGAGE? Instead of paying money to a home mortgage lender who loaned you money secured by your residence, a reverse mortgage is the exact opposite.

A reverse mortgage lender pays money to you, the homeowner. But no repayment is required until you move out for longer than 12 months, sell your house or condo, or die.
Then the reverse mortgage “matures” and the lender becomes entitled to receive the principal repayment plus accrued interest. The remaining home equity goes to you or your heirs.
Contrary to widespread misbelief, the reverse-mortgage lender does not own the residence. If your heirs want to keep the house, they can refinance the mortgage to pay off the reverse mortgage balance.

To be eligible for a tax-free reverse mortgage, you and any co-owner must be at least 62. If any co-owner is younger than 62, the residence is not eligible unless that under-62 co-owner signs a quitclaim deed conveying the title to the over-62 co-owner.
The amount of reverse-mortgage eligibility is determined by the age of the youngest co-owner and the appraised market value of the residence. The older you are, the greater your reverse-mortgage entitlement.

For this reason, homeowners in their 70s, 80s and 90s can receive the largest reverse-mortgage payments. The reason is their life expectancy is shorter than for youngster homeowners in their 60s.

NOT ALL HOMES ARE ELIGIBLE. Because a reverse mortgage is recorded like a first mortgage, there can be no other financing secured by the residence. However, if you have a small mortgage balance, such as less than 25 percent of your home’s market value, you still can probably qualify by using a reverse-mortgage lump sum to pay off the old mortgage.
Because most senior citizens own their residences free and clear, or with a small mortgage balance, this is usually not a problem. However, a large mortgage balance over 40 percent of the home’s appraised value usually makes a reverse mortgage unavailable.

Eligible homes include an owner-occupied house, condominium, or a manufactured house located on an owned lot. Ineligible properties include vacation, second and rental homes, most co-op apartments, houseboats, mobile homes, commercial properties, and farms (unless the residence is on a separate lot).

THREE MAJOR REVERSE-MORTGAGE LENDERS. Although there are a few local reverse-mortgage lenders, the three nationwide lenders are FHA (which has over 90 percent of the market), Fannie Mae and Financial Freedom Plan. FHA reverse-mortgage interest rates are tied to the Treasury Bill Index, plus a margin. But the big disadvantage, especially for owners of expensive homes, is the low FHA limits that vary by county. The Fannie Mae “Home Keeper” reverse mortgages have a higher limit, currently $417,000 (higher in Hawaii and Alaska). These loans are tied to the one-month secondary market CD adjustable-rate index. Fannie Mae is the only lender offering a reverse mortgage for home purchase so you can buy a retirement home with no monthly payments. Financial Freedom Plan reverse mortgages have no maximum limit. They are most attractive for owners of homes worth over $500,000. But this program is not available in all states.

HOW TO COMPARE REVERSE MORTGAGES. The best way to compare reverse mortgages from the three major companies is to use the Internet reverse-mortgage calculator at Federal law requires reverse mortgage borrowers be provided with a Total Annual Loan Cost (TALC) calculation. This TALC shows the annual effective interest rate for 1) the first two years as a percentage of the amount borrowed (usually very high), 2) at the borrower’s life expectancy age (much lower), and 3) at 40 percent beyond the borrower’s life expectancy (very reasonable). The TALC considers the up-front loan origination fees. Because these lender fees are usually substantial, senior citizen homeowners should not obtain a reverse mortgage unless they plan to stay in their home at least five years. A homeowner in poor health, or who plans to move in a few years, usually should not obtain a reverse mortgage.

WHERE TO FIND REPUTABLE REVERSE-MORTGAGE LENDERS. Although there are only three major nationwide reverse mortgage lenders, these loans are originated by local representatives. The largest reverse mortgage originators are Financial Freedom Plan, Wells Fargo Mortgage, Seattle Mortgage and GMAC. Most local banks and other home loan lenders do not offer reverse mortgages.

The easiest place to find a reputable local reverse-mortgage originator is on the Internet at Then click on your state for a list of local lenders and the types of reverse mortgages they offer. If you don’t have a computer, your local public library reference department will be glad to assist you.

REVERSE-MORTGAGE DISADVANTAGES. Although reverse-mortgage tax-free money sounds wonderful for senior-citizen homeowners, there are possible disadvantages. The reality is the homeowners will be borrowing on their home equity. The result can be greedy prospective heirs often discourage obtaining a reverse mortgage because the homeowners will be “spending” the heir’s inheritance.

But many potential heirs encourage their senior-citizen parents to obtain a reverse mortgage to enjoy their “golden years” with financial comfort. However, senior-citizen homeowners who are receiving SSI (Supplemental Security Income) or Medicaid (Medi-Cal in California) should know these benefits can be reduced if the recipients do not spend their entire reverse-mortgage income each month. But Social Security and Medicare benefits are not affected by non-taxable reverse-mortgage income.


New Listing – 1430 Weller Way, Sacramento / Land Park 95818

This may possibly be the most beautiful home in all of Land Park! This exquisitely renovated home was remodeled with permits by licensed contractors. It is the perfect combination of classic features mixed with new amenities – the best of both worlds! Classic features & new amenities include custom kitchen with granite counters, stainless appliances, crown moulding, hardwood floors, detailed doorways, recessed lights, clawfoot tub, coffered ceilings, gorgeous fireplace with custom mantel, dual pane windows, ceiling fans, granite/custom bathroom cabinets, lots of closet space, and much more.

It has 3 bedrooms, 3 full bathrooms (rare for Land Park), is 1,909 square feet per the assessor, is on .15 acres, has central heat & air, has a 2-car garage with workshop / art studio (not included in the square footage), and is within walking distance from William Land Park, Fairytale Town, and the Sacramento Zoo. This home is offered at $799,000. I will be holding an open house both Saturday and Sunday (April 28th & 29th) from 12pm – 4pm.

For more information and photos, please visit:

Land Park Garden Tour and Tea

Next week Land Park is doing a Garden Tour, where several beautiful gardens will be open to the public in order to raise money for Holy Spirit Parish School and the Mustard Seed School arts education.

Land Park Garden Tour and Tea
When: Saturday, May 5
Where: Land Park area
Hours: 10 a.m.-4 p.m.
Highlights: More than eight gardens will be featured with tea presented at a private residence.
Tickets: $15 in advance, $20 tour day; Available at Holy Spirit Church, 3159 Land Park Drive.


Ask Erin: 100% Financing…

I have no money down. Can I get a home loan?

The short answer is that 100% financing programs are disappearing. If you have good credit you should still be able to find a good zero-down loan program…if you have sub-par credit, you may be out of luck. If you are somewhere in the middle, you may want to be a bit aggressive about getting qualified for a home loan now.

I would suggest contacting a loan officer who knows what he/she is doing. I refer my clients to Marlena Olson with Vitek Mortgage Group. 916-486-6900


Race For the Cure

Race for the Cure

Date: Saturday, May 12, 2007
Time: Registration 7:15am;
Start time: 8:05 am
Location: Cal Expo – under the SAR TEAM banner at the Main Gate, Lot C
Register online at, and click on “Join a Team” – select Sacramento Association of REALTORS® Team.

Sactown Magazine…

…is pretty cool! If you have not picked up the latest issue, I would highly suggest it. They can be purchased at Raley’s & Bel Air locations, Borders, Barnes & Noble, and a bunch of other locations. In their latest edition, there is an interesting article about “green” (energy efficient) construction…


The Hamptons…

Not the East Coast Hamptons! The Hamptons at River Heights are upscale condo’s located in Carmichael near the intersection of Fair Oaks Blvd. and Hollister Avenue. This wonderful community is priced from $209,000 – $250,000, and features wonderful amenities, such as granite counters, new cabinetry in the kitchen and bathrooms, stainless Whirlpool appliances, Kohler sinks, faucets, etc, Certainteed dual pane windows and patio doors, wood burning fireplace, Bamboo floors, interior laundry hookups, a private patio or balcony, and designer colors, carpet and lighting. The complex also features a built-in swimming pool, deck/patio, and ample parking. You may click the image of the floorplan to view a larger, more easy-to-read version. All units are 2 bedrooms, and 2 bathrooms. These condo’s are offered by Lyon’s Exclusive Developer Services. Right now the builder is offering special incentives with your purchase, such as no HOA dues for one year, or credits toward closing costs. Contact me for additional details or to schedule a private showing at 916-342-1372 or

We’re #1!

Cute article from the Sacramento Bee this week…
We’re No. 1
THE LOWDOWN: We love lists. Not grocery lists or to-do lists, perhaps, but lists ranking our city against other burgs hit the spot. When we’re on top, we can take pride in the River City – well, as long as it’s not a list of crime hot spots or something. When we’re not, we can dispute the obvious unfairness of the list creators. Here’s a look:

DOING BUSINESS: The Big Tomato ranked only No. 89 on the Forbes list of best places for business and careers, falling down on the job in rankings for the cost of doing business, job growth, education and population. Raleigh, N.C., landed at No.1, but at least we’re not Stockton (No. 199) or Salinas (No. 200).

ON THE GO: Tahitian Noni International, a sports drink manufacturer, ranks Sacramento No. 4 on its most energetic cities list, citing our low body mass index scores. San Francisco tops the list, with San Diego also making the cut.

READ ANY GOOD BOOKS LATELY? Sacramento ranks No. 28 on a list of America’s most literate cities compiled by a Central Connecticut State University professor. Criteria include bookstores, libraries, magazines, education, Internet resources and newspaper circulation.

CRIME RATES: Based on the FBI’s national violent crime rates per 100,000 population, Sacramento comes in at No. 83.

UNDERRATED TOURISM: And the Big Tomato squeezes in at No. 10 on the Sherman Travel list of the nation’s most underrated cities – as in, cities not normally considered tourist destinations.

FIRE IT UP: Propane tank maker Blue Rhino names Sacramento its No. 1 ideal city for summer grilling, based on our predilection for sunny, warm weather.

BABY ON BOARD: puts the Big Tomato squarely at No. 50 on its list of the top 100 cities for healthy pregnancies – top honors go to Overland Park, Kan., while Washington, D.C., tanks at No. 100.

IDENTITY CRISIS: In the category of lists we’d rather not rank highly on, River City ranks No. 9 on a list of the top 10 U.S. cities to have your identity stolen in a list compiled for the American Chronicle. San Francisco tops the list, and San Jose and San Diego also make the top 10.

SINGLES SEEN: Sacramento rates No. 13 on the Forbes list of the best cities for singles, based on rankings for culture, night life, singles, job growth, living cost and online activity. Denver claimed the top spot, while Greensboro, N.C., landed at the bottom at No. 40.

CATCHING SOME Z’s: Hey, at least we’re a great city for sleeping. rates Sacramento No. 11 on its list of the best cities for snoozing.

IT’S AN AROMATIC HEAT: Old Spice puts Sacramento at No. 69 on its list of the top 100 sweatiest cities. Phoenix perspires its way to No. 1, while San Francisco keeps its cool to claim No. 100. And how in the heck did Old Spice come up with the ranking? By calculating the amount of sweat a person of average height and weight would produce walking around for an hour in the average high temperature for June through August.

WELL-WIRED: Sacramento ties for No. 17 with Chicago on the Forbes list of America’s most wired cities, factoring in the number of Internet users with high-speed access, the range of service providers and availability of public-access wireless hot spots.

LIVING SKINNY AND SMART: Folsom ranks No. 34 on the Money magazine list of the best places to live, while Roseville grabs the top spot on its list of the skinniest cities. And Davis takes second, just behind Arlington, Va., on the magazine’s list of the most educated cities.

HELP WANTED: On the Money magazine list of cities with fastest job growth, Folsom ranks No. 9 and Roseville clocks in at No. 11. Surprise! Surprise, Ariz., rates No. 1.

Compiled by Pete Basofin and Sheila A. Kern


Interest Rates to Remain Unchanged…

Looks like the Fed has decided not to raise interest rates [insert here a collective sigh of relief from Realtors, loan officers, buyers, and sellers everywhere].

For the seventh straight meeting, the nation’s independent central bank on Wednesday decided to make no change in interest rates. It’s been this way for almost 11 months…