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Post by Penellopy on Oct 21, 2014 1:00:53 GMT
We are doing a VA refinance on our manufactured house. For some reason, the mortgage company did not combine the land we owned and the house together years ago. In Texas, this can be combined at closing. For some reason, our broker is insisting we change from a VA loan to a Freddie Mac Conventional loan. Every time I press what is a Freddie Mac loan, all I get is a government backed loan. Are Freddie Mac loans safe these days? I know they were involved in the one of the biggest bailouts the government ever had. I am trying to understand Freddie Mac loans before I pull out of this and go to our backup plan which is a Home Equity Loan that is already set in place if I need it. Any thoughts? TIA!
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Post by txdancermom on Oct 21, 2014 1:45:12 GMT
VA Loans have some very specific guidelines that have to be followed to the letter, and doing a manufactured home and adding the land, can be complicated from a loan document perspective. A VA loan has a guarantee connected with it, that protects the lender for part of the loan in the event you default.
If the amount of equity you will have in the property (equity = value of property less the amount of the loan) is 80% or less then a Freddie Mac conventional loan may be the way to go. the rates are probably comparable to the VA loan, the fees may be the difference, look at the APR for the two loans, if the rates are equal a higher APR would mean more fees (VA does limit the amount you can pay in fees). From a documentation/underwriting standpoint a conventional loan is easier to process.
I would suggest not doing a home equity loan unless you really have to - there are a lot more strings attached to that, and in Texas once you have a home equity loan, any other loan you do to refinance that loan HAS to be a home equity loan, and sometimes lenders do not like to refi those.
hth
pat
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