Podcast 102: Can Assuming a VA Loan Be a Smart Move for Veterans?

A complimentary download to pair with this episode can be found on the podcast page. www.gregoryricks.com/podcast102

For more episodes like this head over to www.gregoryricks.com/podcast

For the latest in financial news, why don't you tune into "Winning at Life with Gregory Ricks" LIVE on Saturday Mornings from 10 am - 1 pm on:

• New Orleans - WRNO-News Talk 99.5 FM
• Biloxi- WBUV - News Talk 104.9 FM

OR watch on YouTube LIVE on our YouTube page Winning at Life with Gregory Ricks!

If you have any questions or are looking for some financial advice?
CLICK HERE to Book a Consultation

The free consultation provides an overview of products and services offered by Gregory Ricks & Associates. Investment advisory services made available through AE Wealth Management, LLC, a Registered Investment Adviser, and there is no obligation.

Transcript

Gregory Ricks: 0:00

Hey welcome. I'm your host Gregory Rick's a financial advisor here to answer your questions and help you win with your money.

Unknown: 0:10

On today's episode of the Ask Gregory podcast Gregory tunes into the winning it life hotline Brad had called in to discuss what a VA loan is, and how they could be used to open housing opportunities for veterans. We also have a complimentary download waiting for you on this topic. If you go to gregoryricks.com/podcast102. Again, that is gregoryricks.com/podcast102

Gregory Ricks: 0:33

So let's go to the hotline Brad from slide L, you're on winning at life, how can we help you

Unknown: 0:39

walk? Long term, longtime listener first time caller, I just wanted to tell you that I'm retired military officer. And my house was paid off about 500 and something 1000 And I refinanced through the VA and 100% and took the money out, and 2.8% interest and invested it in the market. And I'm making a killing right now.

Gregory Ricks: 1:04

Awesome. Well, from my standpoint, you come to me, I'd have difficulty with that, because that's house money. So from an advisor standpoint, I don't need to know that part. Because that's house money, you have debt on your house, and you've put it at risk there. I am glad it's going well for you. Despite that, you know, the s&p is somewhere off a little bit over 17% You know, Safe Money area bonds is off over 15%. But one thing I tell people, this, this is also opera tunity. You know, that comes along? And it one of the thoughts and I'll share with you, and I'm sure you've got more to ask me. But you know, we're all Vanguards s&p 500 Total Return fund is off 17.9%. As of now, you know, a discussion I was having yesterday, hey, the market could be off another 10% Would that don't get us to 30. But if we got to 30% off on a short dip, oh my gosh, that's opportunity right there. Because it rarely happens. Because history tells us this always comes back. And eventually it's going to set new highs in the future. I don't know if it's next year, or six years out, or seven or four. But that's where we're headed is this this is kind of the norm. So how can I help you, Brad?

Unknown: 2:37

Well, I just I just wanted to say that, you know, with with a VA loan, it's assumable. I heard you talking earlier with mortgage gumbo. And I know this is not my forever home. So if the interest rates go up to eight, nine, 10% If I decide to sell in the near future, I'm 64 now, and if I decide to sell a move out of state, the loan from what I understand is assumable. And is that not correct?

Gregory Ricks: 3:04

You know, I'm not gonna be 100% sounding board on that and answer that. But you know, that hasn't been brought up in a long time. And I think more loans used to be assumable and would see a loans that are assumable that is a cool option. And if you really do have that, of course they've got to qualify for it. And that probably won't be easy. Gotta you know, be a pretty good credit but but that is like passing on stolen money, so to speak. When you do exactly, yeah, like oh my gosh, that is ridiculous. You're at 2.8, right?

Unknown: 3:42

Correct. Yeah, makes it makes the home, it makes the Home Affordable to a veteran now you have to be a veteran to assume the loan. But as the veteran comes in, instead of paying 810, you know, eight or 10% on a home loan, he can pick up and take over my my mortgage.

Gregory Ricks: 4:02

That is That is crazy. Let's see I've got a note here that just came to me for all VA loans committed owner after March one of nine teen Ada, you may sell your home to someone who agrees to assume your loan, if the loan holder or VA approves the credit worthiness of the purchasers. There was some good information Brad shared with us. But what was pretty cool that Brad shared with us is the VA loans out there. And let's see is a V A, here's a how to assume a VA loan for those kind of like oh my gosh, let me find a house that has a VA loan. So you have to how to assume a VA loan finding homes Our who will allow you to assume their VA loan, verify that you meet VAs minimum credit score and income requirements agree to assume all obligations of the existing loan, pay the funding fee down payment, if required and closing costs, and exchange your VA loan in. Title met, and I'm sure there's more. But it is something interesting. From that standpoint, just not something talked about, I don't know what else out there is assumable. But there probably is a good bit more here, here's the big deal on assuming, and that is qualifying to assume. And then the other like for Brad, he 100% essentially cashed out. But he bought 100% of the value. He's got pretty darn credit, by the way for that, as well and probably has a little bit of pull his officer in the military, some VA cred there. And once again, Brad, thanks for calling in the show, and we appreciate your service to our country very much. So and others can be assumable out there probably. But you know, it's the qualifying part of it. And then sometimes when you've got something to assume where he's kind of got the value of the property borrowed out of it, so he's not going to sell it for a discount, he's he's going to sell it for what its value is. But some of the problems sometimes when somebody has something that's assumable, and let's say it's worth 200,000, and they've got an assumable loan that has a value of 100,000. Well, you need to come up with 100,000 to buy that house and assume that loan in that case. So that's where a lot of the hiccups that makes it tough for somebody to buy us, they've got to come up with that other part that either needs to be cashed or they got to borrow that money or pick up a second in that case. But he did a pretty sweet deal knowing he could make use of that money, he trusted his risk analysis on where to go else. Where were that? Well, heck, you can get more through 10 year treasuries than he was paying on interest of that. So it doesn't necessarily have to expose that money to risk and what I was getting at when talking to him is that something you couldn't work with our firm owners, we don't want to work with house money, literally, I know. House money could be like free money. But this house money is money that he took out of his residence, we're not fans of borrowing money, and putting it to risk. And that's where I was going with that. And that's not something we advocate and would advise against that. So so there's clarity regarding the borrowed money out there. And I work in the world of helping people with their money, helping them with their investments. We are money managers, as well. And we use institutional guidance and we utilize the invest 5050 philosophy, but it's not just about managing the money. I think part of what's important that we are are a sounding board when somebody's got ideas or thinking of doing things or what about trying this and and we work with clients that kind of do some of their own investing but also work. We work with them on that money as well. Thanks so much for listening to ask Gregory where we answer your financial questions. You can find us anywhere Podcasts can be found and on YouTube and Facebook Live every Saturday from 10 to one subscribe, leave a review and tune in next time.

Disclosure: 9:20

We also have a complimentary download waiting for you on this topic if you go to gregoryricks.com/podcast102 Again that is gregoryricks.com/podcast102 Investment Advisory products and services are made through a wealth management LLC a registered investment advisor Gregory Rick's and associates the total wealth authority is our trademark tagline it does not promise or guarantee investment results or the preservation of principle nor does it representing certain level of skill investing involves risk including the potential loss of principal any references to protection safety lifetime income generally referred to fixed insurance products never securities or investments. Insurance guarantees are backed by the financial strengths and claims are the activities of the issuing carrier. Please remember that converting an employer plan account to a Roth IRA is a taxable event increased taxable income from the Roth IRA conversion may have several consequences including but not limited to, a need for additional tax withholdings for estimated tax payment, the loss of certain tax deductions and credits, and the higher need on taxes for such security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA. This podcast is intended for informational purposes only, and is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual situation Gregory rates and Associates is not permitted to offer and no statement made during the show shall constitute tax and or legal advice our firm is not affiliated with nor endorsed by the US government or any other governmental agency. The Information and opinions contained herein provided by third parties have been obtained by sources believed to be reliable, but the accuracy and completeness cannot be guaranteed by Gregory it associates any media logos and trademarks contained herein are the property of their respective owners and no endorsement made by those owners on February 6 and associate is stated or implied for our direction associates as a strategic partnership with tax professionals and attorneys who can provide tax and legal advice and II wealth management. Gregory Rhodes and Associates WJ Blanchard Law LLC drinkies info and mortgage gumbo are not affiliated companies.