The Veterans Administration offers vets and active military personnel excellent home financing options. VA buyers can buy a home with NO MONEY DOWN, NO PMI, and negotiate for the seller to pay ALL closing costs. I had the pleasure of settling just such a loan yesterday with a young marine who recently returned from a tour in Afghanistan.
National Assn. of REALTORS® announced this week that it wants the VA to increase the possible caps on a new VA adjustable loan product.
The Veterans Administration issued the final rule governing the hybrid adjustable rate mortgage program. The VA can now guarantee loans that have an initial interest rate that is fixed for a period of at least three years but can be adjusted afterwards on a yearly basis. The annual adjustments are limited to one percent, and the maximum increase in the interest rate over the life of the loan is capped at five percent. The rule went into effect on May 2, 2005.
NAR is consistent if nothing else in its support of lenders. Here's what NAR said in a statement released this morning:
"...the statute, which caps the interest rate adjustment at one percent, should be changed to allow two percent adjustments on a yearly basis for five year ARMs and above. This change would make the program consistent with the FHA hybrid ARM program. There may be legislative attempts this year to remove the one percent annual adjustment cap limitation for loans with a fixed-rate period of five years or more."
Even this old hippie-from-the-60s blogger says, "Give these kids a break and let the rule stand!"
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