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The Water Cooler
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Interest Rates Are Still Low...
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<blockquote data-quote="OK Corgi Rancher" data-source="post: 3665906" data-attributes="member: 45773"><p>I had an interesting situation with this loan...</p><p></p><p>I sold a home in Phoenix back in 1984. Interest rates for VA loans back then were in the neighborhood of 13% vs about 15% to 17% for conventional loans. I was young and stupid and didn't know anything and let the buyer assume my loan. Fast forward to this week, 37 years later...</p><p></p><p>We're paying $200k for the new home. We wanted to put $75k down and finance $125k. VA tells me I can't do it because I have no "basic eligibility". OK...explain that. VA tells me, 37 years later that the buyer defaulted on the loan he assumed in 1985. The bank foreclosed and sold the house and VA took a hit of $5700 and change. I'm responsible for that since I let the knucklehead assume my loan. This is the first time I've heard of it. I was never contacted or informed about the foreclosure and the subsequent debt to the VA. It doesn't get reported and it doesn't affect credit and basically no one knows about it outside of the VA unless you try to finance another home with a VA loan.</p><p></p><p>The kicker is this... If I want a loan for less than $145000, no go unless I pay off the $5700. However...borrow $145001 and it's OK. It's called "secondary" or "extended" entitlement. It just seems insane.</p><p></p><p>In no world...except for the government...does telling someone who technically owes you money that they can't borrow a small amount of money from you. But if you want to borrow a larger amount of money they feel you're good for it.</p><p></p><p>So since the interest rate came in so low we're gonna put a little less down and use the extra to have a whole-house backup generator installed.</p></blockquote><p></p>
[QUOTE="OK Corgi Rancher, post: 3665906, member: 45773"] I had an interesting situation with this loan... I sold a home in Phoenix back in 1984. Interest rates for VA loans back then were in the neighborhood of 13% vs about 15% to 17% for conventional loans. I was young and stupid and didn't know anything and let the buyer assume my loan. Fast forward to this week, 37 years later... We're paying $200k for the new home. We wanted to put $75k down and finance $125k. VA tells me I can't do it because I have no "basic eligibility". OK...explain that. VA tells me, 37 years later that the buyer defaulted on the loan he assumed in 1985. The bank foreclosed and sold the house and VA took a hit of $5700 and change. I'm responsible for that since I let the knucklehead assume my loan. This is the first time I've heard of it. I was never contacted or informed about the foreclosure and the subsequent debt to the VA. It doesn't get reported and it doesn't affect credit and basically no one knows about it outside of the VA unless you try to finance another home with a VA loan. The kicker is this... If I want a loan for less than $145000, no go unless I pay off the $5700. However...borrow $145001 and it's OK. It's called "secondary" or "extended" entitlement. It just seems insane. In no world...except for the government...does telling someone who technically owes you money that they can't borrow a small amount of money from you. But if you want to borrow a larger amount of money they feel you're good for it. So since the interest rate came in so low we're gonna put a little less down and use the extra to have a whole-house backup generator installed. [/QUOTE]
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