Mortgage 101



fA2F8bxI7y96OpsipK4WQlCvY-aTAhOAf5n1FZvLZ4UModerator: We would like to thank you for taking the time to sit down with us today, Paul. We’re excited to learn more you and how our VA loan program can help other veterans, like yourself. Let’s get started!

Moderator: How long did you serve in the military and for what military branch?

Paul: I joined when I was 19 years old and served four years from August 2000 through August 2004 in the US Airforce.

Moderator: How long have you been working at Paramount?

Paul: I have been in the business since 2005 and was hired as a District Sales Manager with Paramount in 2013.  I have since been promoted to Vice President of Sales which I love because it gives me the opportunity to educate Bankers about our military vets as well as the benefits of VA loans.

Moderator: Can you tell us what the VA mortgage program is?

Paul: We really have two types of VA loans.  If a borrower is currently in a VA loan and simply looking to lower their rate and payment, we would us the VA IRRRL program (Interest Rate Reduction Refinance Loan).  This may be the best thing about being in a VA loan because any time rates drop we can reduce their interest rate and payment without all the underwriting requirement other loans may require.  VA IRRRL’s do not require an appraisal or even income documentation, which allows us to close quickly with ease.  A traditional VA loan is a loan that every veteran should take advantage of.  Not only do they allow you to refinance or purchase 100% of the value of the home but they typically come with low interest rates as well.  Unlike FHA loans, the VA does not require a monthly mortgage insurance even if you are at the max LTV (Loan to Value).  VA also has less stringent guidelines, which allows approval for our veterans with lower credit scores as well as higher debt to income ratios.  These are just a few reasons why VA loans are a wonderful program to be a part of.

Moderator: How come veterans do not have to pay private mortgage insurance?

Paul: While all other loans may require monthly mortgage insurance, the VA loan does not.  These loans are designed to help our veterans as a benefit, not a detriment.  Now even though the VA does not have a monthly mortgage insurance, they do have a VA funding fee. This fee reduces the loans cost to taxpayers, considering that a VA loan does not require a down payment nor does it have a monthly mortgage insurance.  You have the option to finance the funding fee or pay it cash.

Moderator: What do veterans need to do to see if they are eligible for a VA loan?

Paul: All of our licensed loan officers are trained and happy to help.  If you are unsure if you would qualify or not, we can look into it for you by requesting a COE (Certificate of Eligibility) from the VA department.  This will let us know if you are eligible and what your entitlement amount is.

Moderator: Thanks, Paul, for telling us your story and for spreading the benefits of the VA loan program to other veterans. We appreciate your sacrifice and service to our country.

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Top 5 Advantages of a VA Loan



Being a military veteran comes with some great benefits, especially when it comes to home loans. Veterans who want to purchase a home can do so with a VA (Veteran Affairs) loan. The goal of the VA loan program is to make homeownership feasible for active and retired military personnel. The Department of Veteran Affairs makes buying a home easier for Veterans through the VA home loan program. Find out the top 5 advantages of the VA loan program:

  1. A Down Payment is Not Required- One of the biggest advantages of a VA loan is that a borrower does not have to pay any money toward a down payment. This is the only mortgage loan where a buyer does not have put money down to secure a loan. The reason for this is because VA loans are made by private lenders whereas for other loans the bank, mortgage company and other lenders put the funds toward the purchase of your home.
  2. Do Not Have to Pay Private Mortgage Insurance- VA borrowers do not have to pay private mortgage insurance if they do not have a 20% down payment toward their home. This is significant because private mortgage insurance can add $100 or more to a borrower’s mortgage payment each month. This benefit can save VA borrowers thousands of dollars over the life of the loan.
  3. You Can Use the VA Loan Benefit Numerous Times- A big misconception of a VA loan is that borrowers believe they can only use this program one time. There is not a limit on the number of times a borrower can use the VA loan program. Veterans who served our country earn this benefit for the rest of their life and can use this loan program as many times as needed.
  4. VA Loan Interest Rates Are Typically Lower- The interest rates for a VA loan are very competitive and typically lower than a conventional loan because it is guaranteed by the Department of Veteran Affairs. Since the Department of Veteran Affairs backs this particular loan, financial institutions feel more secure and can offer lower interest rates.
  5. Flexible Approval Guidelines- Veterans do not need to have perfect credit to secure a VA home loan because the Department of Veteran Affairs oversees the program. The Department of Veteran Affairs is not a lender and therefore it does not require minimum credit scores. This is a significant benefit because most conventional loans have a minimum credit score benchmark that must be met to receive a competitive interest rate.

If you are a Veteran and would like learn more about the VA program, give one of our senior mortgage specialists a call at (877) 788-4564 or to receive a free quote click here >>

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rayModerator: We would like to thank you for taking the time to sit down with us today, Ray. We’re excited to learn more about you and how our VA loan program can help other veterans, like yourself. Let’s get started!

Moderator: How long did you serve in the military and for what military branch?

Ray: I served in the United States Air Force. In the Air Force, I served in several capacities including applied operation missions and management roles, offering comprehensive background supporting the United States military airlift operations in roles of increasing responsibility during a 20 plus year career. I served six years on active duty and continued my service to our country by serving with the United States Reserves. In the past, I served with the 452nd Air Mobility Wing at March Air Force Base, located in California, where members are professionals committed to excellence and to the highest state of readiness in support of our nation’s defense and objectives. During my active duty, I participated in Operation Desert Storm (also known as the Gulf War). I have spent my remaining time in the Air Force Reserve, where I am currently assigned to the 146th Airlift Wing in Oxnard, CA. Service is the gift we give to the world and gives our life meaning.

Moderator: How long have you been working at Paramount?

Ray: I have been working as a Senior Mortgage Specialist at Paramount Equity Mortgage for the last 2.5 years. The culture here at Paramount is wonderful. It’s an honor and privilege to serve our veterans and active service men and women.

Moderator: Can you tell us what the VA mortgage program is?

Ray: The VA is a powerful option for our active and retired military servicemen. Our active and retired military servicemen can use the VA mortgage program to purchase a home without a down payment, lower average interest rates than other home loans, do not have to pay for private mortgage insurance, will not have any pre-payment penalties and the VA foreclosure avoidance team can advocate on your behalf during hardships­­­. There is no greater purpose in life than to serve a veteran.

Moderator: What is the biggest benefit of a VA loan?

Ray: That would definitely be the waiving of a down payment. The VA guidelines allows veterans to purchase a home without the need of a down payment. This program is a privilege and entitlement for our veterans. This is such a powerful option, I have even used the VA mortgage loan program myself.

Moderator: What do veterans have to do to see if they are eligible for a VA mortgage loan?

Ray: Veterans just need to send us their DD Form 214 (Certificate of Release or Discharge from Active Duty) or a VA certificate of eligibility. Our team will call the VA and handle the eligibility paperwork for our military borrowers. Something else I would like to note, is if a military spouse passes away in active duty, the surviving spouse can also apply for the VA mortgage loan.

Moderator: What do you think is the biggest misconception regarding the VA loan program?

Ray: Most veterans know about the home loan entitlement but many veterans who served in the past, do not know they can use their entitlement more than once.  The VA loan program can be used again.

Moderator: Thanks, Ray, for sharing your story and for spreading the benefits of the VA loan program to other veterans. We appreciate your sacrifice and service to our country.

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Everything You Need to Know About VA Loans

Happy parents in soldiers uniform kissing their daughter

Happy parents in soldiers uniform kissing their daughterWhat is a VA Loan

A VA loan is a specific loan program, that is guaranteed by the Department of Veteran Affairs, to help veterans, active military members and survive military spouses purchase a home. The Department of Veteran Affairs (VA) creates the requirements that applicants must meet but they do not actually make the loan. The loan will be created at a financial institution, such as a mortgage company or bank.


Who is Eligible

To meet the basic eligibility requirements for a VA home loan, you must meet one of the following criteria:

  • Served 90 consecutive days of active service during wartime
  • Served 181 days of active service during peacetime
  • Have more than 6 years of service in the National Guard or Reserves
  • Be the spouse of a service member who has died in the line of duty or as a result of a service-related disability

The list above is a good indication of the basic eligibility requirements but ultimately the Department of Veteran Affairs will determine eligibility.

Types of VA Home Loans

There are three types of VA home loans available to veterans.

  • VA Purchase Home Loan- This type of loan allows veterans, who have met credit and income qualifications, the opportunity to purchase a home.
  • VA Refinance Home Loan- This type of loan allows homeowner veterans, who are in need of cash, to take equity out of their home. This is a great option for homeowners who want to do a home improvement project.
  • VA Streamline Refinance Home Loan- This type of loan is also known as an interest rate reduction refinance loan, which allows homeowners to refinance their home in an effort to lower their monthly payments.


How to Find Your Nearest VA Office

For more information on VA loans, you can contact the Veteran Affairs office. To find your nearest VA office, you can use this link >

Applying for a VA loan

To get started on the VA loan application process at Paramount, you can visit this link to receive your free quote >

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6 Benefits from a Cash-Out Refi

Young Couple Rennovating Property Together

Young Couple Rennovating Property TogetherIf you’re a homeowner with considerable equity in your home, you might want to consider a cash-out refinancing plan to finance home projects or eliminate high interest debt. In a nutshell, this arrangement allows you to initiate a new mortgage with a larger principle than your existing one – then, you obtain cash on the balance between the two amounts. Used responsibly, there are several advantages to a cash-out mortgage, including these top six benefits.

  1. You may be able to obtain a better interest rate. As compared to other types of property-based loans, a cash-out refinancing usually offers lower interest rates. Home equity, home improvement and business startup loans are typically a few fractions of a percentage higher. A lower interest rate means reduced monthly mortgage payments.
  2. You can improve your on-hand cash flow. You can apply funds from cash-out refinancing to balances due on high-interest debts or credit cards accounts. Eliminating these debts puts you in a better cash liquidity position for unexpected costs or emergencies. You’ll still carry the debt through the refinancing, but you’ll only be making one payment per month on a loan carrying a much lower interest rate.
  3. You’ll get the opportunity to improve your credit score. When you pay off or pay down balances on revolving debt or credit cards, you improve your credit rating. Credit cards that you’ve maxed out have a severe negative impact on your score, as are those where you’re only paying against interest instead of the balance.
  4. There are tax advantages of cash-out refinancing. You’ll take advantage of a couple of tax benefits with a cash-out refinancing. First, the interest you pay is tax deductible; the interest you pay on other types of debt or credit cards is not. Second, some of the closing costs you’ll incur through the refinancing process are also not subject to tax liability.
  5. Fees for refinancing can be minimal under certain circumstances. There are costs related to refinancing your mortgage, including application fees, getting your credit rating, document review expenses, and title insurance and search. However, if you have high equity in your home and a great credit rating, these costs may be reduced. In addition, if you stick with the same lender that issued your original mortgage, some of these fees may not be necessary the second time around.
  6. Cash-out refinancing can help you boost your home’s fair market value. Many homeowners use the proceeds from their cash-out refinancing to fund home improvement projects. These renovations almost always cause the fair market value of the property to increase, whether the projects are interior, exterior or add-ons to the existing square footage.

While homeowners must use caution when arranging a cash-out refinancing plan, the advantages can be significant under appropriate circumstances. If you’d like to know more about whether a cash-out refinance is right for you and qualification requirements, consult with a refinancing professional for details.

*Disclaimer: Paramount Equity Mortgage is not a tax advising company. If you have any questions, please reach out to your CPA for tax advice or other tax related questions.


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How HARP Can Help You

house near the woods


house near the woodsHARP, which stands for the Home Affordable Refinance Program, was created to help struggling homeowners refinance their mortgage. This government program is designed to assist homeowners, who owe more money than what their home is worth, to have the opportunity to refinance their mortgage and lower their monthly payment. Interest rates in today’s market are 30% lower than rates in 2008, which can mean significant monthly savings! Find out if you meet the HARP eligibility requirements below:

Eligibility Requirements

-Fannie Mae or Freddie Mac must own or back your mortgage loan

-The value of your home is less than your current mortgage or your LTV ratio is 80% or higher

-Your home is your primary residence, second home or investment property

-Your mortgage was created on or before May 31, 2009

-You are current on your mortgage payments

 (No more than one late payment in the last 12 months, no 30+ day late payments in the last 6 months)

*Note: There is not a minimum credit score required for this program and closing costs can be bundled into your new loan.

Over 3 million Americans have taken advantage of this program. If you were turned down in the past, you may be eligible now. Several changes have been made since HARP was originally introduced. The guidelines and eligibility requirements are much simpler now. To learn more about the HARP program, give one of our mortgage specialists a call at (877) 788-4564 or receive a free quote here >>

  • “Freddie Mac and Fannie Mar have adopted changes to the Affordable Refinance Program (HARP) and you make be eligible to take advantage of these changes.”
  • “If your mortgage is owned or guaranteed by either Freddie Mac or Fannie Mae, you may be eligible to refinance your mortgage under the enhanced and expanded provisions of HARP.”
  • “You can determine whether your mortgage is owned by either Freddie Mac or Fannie Mar by checking the following websites:
  • or”
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Is It Time to Refinance? 5 Factors to Help You Decide

Beautiful curb appeal of American house in olive exterior paint.

When a new mortgage replaces an original mortgage, the process is known as refinancing. You, the borrower, can get a much better interest rate if you choose to refinance. In a shaky economy, funding a home mortgage can prove troublesome. Ignoring the problem will not only impact your credit score but could leave you financially unstable.Beautiful curb appeal of American house in olive exterior paint.

Not sure if you should to take out a new loan of this kind? Absorb the following factors to make an informed decision about refinancing:

  1. Your Credit History Has Improved - A lender will always take a borrower’s credit score into account before offering a loan. A credit score will be negatively impacted if a payment is failed to be made or if a payment is made late. These two reasons will cause interest rates to be higher. A borrower with a high credit score will be considered an ideal candidate for refinancing, which will in turn be given a lower interest rate.
  2. Your Income Has Increased - When your debt-to-income ratio changes, it will be the perfect time to refinance your mortgage. The extra monthly cash flow you are receiving, whether it is from working overtime or you were given a raise, can be used to fund a mortgage refinance. Using extra cash to pay off a mortgage loan will ensure your payments are made on time. As a result, your credit score will improve and your chances of obtaining another loan in future will increase.
  3. Your Debts Have Decreased - One of the main reasons why a lender will turn down a borrower for a loan is because their debts are too high. Committing to a mortgage refinance means that you need to be in a comfortable financial position to do so. Aim to repay your debts little by little and then explore your refinancing options.
  4. Your Home Value Has Increased – Have you thought about how much equity you have built up to refinance a mortgage? A great rate is guaranteed once your equity increases, so pay attention to changes in property value if you are keen to refinance with low interest rates. In order to estimate your home’s value, read news reports, assess property tax valuations, and investigate the recent sales of similar properties.
  5. You Want A Fixed Rate Mortgage - Fluctuating interest rates may leave you feeling worried. After all, how are you supposed to relax if your monthly payments increase and your income stays the same, or decreases? Replacing an existing loan with a mortgage refinance that has a fixed rate is a better option than an adjustable rate mortgage because you will know precisely how much you are paying and when.

Refinancing could leave you with a much fatter wallet since you will be spending less for your home in the long run. Lower interest rates will relieve you of some pressure and make it easier for you to avoid late payments. When you consider the fact that late payments will have a negative impact on your credit score, it’s pretty clear to understand why so many homeowners are refinancing a home mortgage.

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What is a VA loan?

little girl hugging her military father

little girl hugging her military fatherDown payments are a critical step to securing a good deal on a mortgage. The general percentage of the total amount required ranges depending on the lender and the personal applicant. In some cases, whereby the property a buyer is hunting is relatively large and expensive, a higher down payment will be requested.

Putting a big chunk of money on the table is not always achievable for people on a lower income or people with a poor credit score. This is where a VA loan comes in – one of the few loan types made available to homebuyers with an undesirable lending history.

Five Things to Remember About VA Loans

The thought of being granted that all-important loan that could transform your dreams into reality is definitely something to get excited. Since they are a lot more straightforward and easier to get granted acceptance for than unconventional loans, there is no wonder why they are such a popular option. Get clued up on the subject before you decide whether or not VA loans are right for you.

Here are five valuable and beneficial pieces of information to keep in mind ahead of the application stage:

The Fees – A variable funding fee will be required just once to set up an account of this kind.

Eligibility – The majority of people who apply for a VA loan will be approved during the pre approval phase.

Military Members – Although most applicants will be accepted, lenders prefer active veterans and Military members.

Simple Application – The fact that VA loans can be granted without mortgage insurance makes it a much more appealing choice for borrowers.

No Down Payment – Financial stress is relieved for borrowers who don’t have access to a great deal of funding.

Tips for Improving Credit Score

Taking the time to make some small changes to your finance habits will aid you in boosting your credit score. Make payments, even if they are very small, to improve lender trust. This will also put you back in the good books of lenders you failed to pay in the past. Following a budget plan is another viable option.

Do you really need to borrow?

Let’s say for example, you are planning on sprucing up a property that is currently for sale at a price that is hard to beat, the temptation to borrow will be irresistible, for sure. Nevertheless, thinking things through is crucial because you might find yourself in a spot of future financial bother if you are not capable of repaying now. Take the time to boost your credit score and approach a lender again.

Figuring Out a Repayment Plan

The importance of understanding if you are able to commit to regular mortgage payments cannot be stressed enough. Getting in touch with a lender is the best way to figure out how much you can realistically afford to repay. The calculations will be based on a few factors, such as:

– Your incomings

– Your outgoings

– Your reliability with previous payments

Don’t worry too much about that last one, because even if you have been unreliable in the past, some lenders will consider you based on other determining factors. To improve your chances at obtaining a VA loan from a trusted lender, aim to make a fee changes. For example, try to reduce existing debt as a way of improving credit score.

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