You might be living under a rock if you haven’t heard about the 10 Year treasury at an all-time low and the federal reserve cutting interest rates. Or, far more likely, you’re just not a numbers and data nerd like me with a vested interest in all things finance. Luckily, if you’re a prospect or existing homeowner, one thing is certain, and that’s a win for you in this economic time. Breaking this further down into how it applies to your earned VA Home Loan benefit, there are two subsections that need to be explored: purchase and refinances.
What these amazing low rates mean for you is more purchasing power. For example, a 0,000 30-year home loan at 4.5% is a whopping 1 MORE every single month than it would be at 3.5% (,000 over the full lifespan of the loan). An alternate way to look at this is that you can purchase a 0,000 at the 3.5% rate for the same monthly cost as a 0,000 loan at 4.5%. That’s an increase in ,000 upfront purchasing power for the SAME MONTHLY COST. If that doesn’t scream raining money to you, I don’t know what can.
If you already have a VA home loan and just had some sort of feelings about missing out on this amazing opportunity, the good news is you can still capitalize on this opportunity through a VA Interest Rate Reduction Refinance Loan (IRRRL, also known as a streamline refi). Just like anything else, there are myths floating around out there, and you know I’m going to break through them.
You do not have to be currently living in the home you wish to refinance. If you have a home that was once your primary residence, which is the only kind of loan the VA writes, then you qualify for a VA IRRRL (but NOT a cash out refi and NOT switching from conventional to VA when it’s not owner-occupied). It really is that simple. Easy peasy!
If you’re looking at a transition but living in the home right now, you are NOT obligated to extend your plans to live in the home for any certain period of time. Just like any VA loan, there are absolutely no minimum residency requirements.
A refinance is exponentially easier than a purchase transaction. No appraisal or inspection is required for a streamline refi. You DO need to be able to prove an ability to repay, so employment verification is required. Lower documentation requirements all around make for an easier process, however. Bank statements, pay stubs, proof of homeowners insurance and a current mortgage statement are what you can expect your lender to ask for.
Expectation management is important. Expect a slower closing turn time than your traditional 30-day purchase loans. It is not a sign of incompetence on the lender’s behalf, it is simply a prioritization. When compared to a purchase contract that is tied to multiple parties for timelines to move, the urgency for a refi comes secondary. No one’s earnest money deposit and moving schedule is driving the need, and there is a lot more skin in the game on a purchase deal. Expect to see a 45-day rate lock on your refi and know that it’s nothing personal.
The US military is unquestionably the world’s strongest force with the world’s largest defense budget.
But throughout the 2000s, the Pentagon spent $51.2 billion on 15 major programs “without any fielded systems to show for it,” according to a new Center for Strategic and International Studies report.
The abandoned projects are largely due to a lack of funding attributed to the Budget Control Act and sequestration.
Sequestration, which is indiscriminate budget cuts across the board that affect every portion of the military equally, is the greatest threat to the US military currently, former Defense Secretary Robert Gates told Business Insider.
Below are a series of the military’s modernization projects that were canceled partially due to a lack of funds.
Future Combat Systems
A prototype of the Non-Line-of-Sight-Cannon, a component of the Future Combat Systems.
Sunk Costs: $18.1 billion
Follow-On: The project was ultimately superseded by the Ground Combat Vehicle Program. This program was also ultimately canceled.
These are the guys who have lived the American dream. Five former enlisted warriors from various services who raised their right hand when it was time to serve, then got out and hustled to earn what they knew could be theirs.
Mr. Edson’s service began during the Korean War when he enlisted in the Army, where he spent three years in the signal corps.
Once out, Edson began selling his own racing boats from a parking lot in Seattle, Washington. He eventually bought the rights to Bayliner Marine for a reported $100.00 and developed the company. Edson sold it to Brunswick for $425 million.
He joined the billionaire’s club through sound investing and now reportedly spends his days flying helicopters and cruising yachts.
When Abraham finished his service with the infantry in 1947 Europe, he returned stateside where he bought the Thompson Medical Company. At the time, the company had revenue of $5,000.00 annually. Today, the company is still around and is doing quite well.
He joined the billionaire’s club through his interest in the weight-loss industry, which led to his development of Slim-Fast Foods. You may have heard of it.
Mr. Murdock dropped out of school in the 9th grade and was drafted into the Army during WWII. Once out, Murdock moved to Detroit and was homeless for a time, but he managed to get a $1,200 loan to buy a failing diner.
He flipped it for a small profit that he used to move to Arizona. There, Murdock began a career in real estate, acquiring many businesses, including the pineapple and banana producer Dole Food Company, which he developed into the giant it is today.
Murdock joined the billionaire’s club by selling his 98-percent share of the sixth largest Island of Hawaii. He believes in health and has vocal plans to live to see his 125th birthday.
The 36 page indictment outlines a massive scheme to defraud the government through a series of kickbacks, money laundering, and medical malpractice.
The feds allege the conspiracy began in 2014 when Richard Cesario and John Cooper founded CCMGRX, LLC (later renamed CMGRX). The premise of the company was to market compounded prescriptions to service members, retirees, and their dependents, documents show.
Compound prescriptions are drugs which are mixed in an effort to provide a unique prescription that meets the specific needs of the patient. They are not approved by the FDA, but may be prescribed when a patient is unable to have a specific ingredient in a drug, or the drug is not available in a specific form, such as prescriptions for children who can’t swallow a pill and must have a liquid version of the medication.
Cesario and Cooper enlisted the help of three marketers, Joe Straw, Luis Rios, and Michael Kiselak, to recruit pharmacies and patients, the indictment shows.
The patients allegedly were oblivious to the scam, instead being told that they were taking part in a medical study being done by an independent non-profit organization, the Freedom From Pain Foundation. The company was operated by Cesario and Cooper, who used the company to launder the money they received from TRICARE, Justice says.
Money was allegedly paid to five different pharmacy owners and two doctors.
After paying beneficiaries for participating in the study, kickbacks were allegedly sent in the form of checks to the doctors, pharmacy owners, and marketers. The rest was pocketed by Cesario and Cooper, the feds say.
More than 30 separate counts were filed against the men, including conspiracy to commit healthcare fraud.
The indictment also outlines some of the punishment the men will face should they be found guilty, beginning with a list of properties in Texas, Florida, and Costa Rica that the men will have to turn over to the government.
Additionally, 32 vehicles, including Ferraris; Maseratis; Aston Martins, Corvettes; Mercedes-Benz; Jaguars; Porsches; Hummers; Cadillacs; BMWs and several trucks and SUVs will be seized by the government upon conviction of any single offense.
The indictment goes on to list multiple boats and recreational vehicles, bank accounts in the names of the men and family members, cash, investment accounts, firearms, jewelry, other property, and “working interest” in several oil companies, as well as a “money judgement” that could all be seized by the government in an effort to recoup the over $100 million scammed by the group.
According to the press release regarding the indictment, Cesario and Cooper, who were placed in custody earlier this year, are being held until trial. The other 10 men all made bail until their trial.
Each of the charges against the men is punishable by between 5 and 10 years, and a $250,000 fine.
The FBI and the Defense Criminal Investigative Service helped investigate and breaking up the alleged conspiracy ring.
The Department of Defense says the service branches aren’t spending enough taxpayer dollars to fund their morale, welfare, and recreation (MWR) programs, according to a memo sent to each of the services last month.
Military Times reported this week that Todd Weiler, assistant defense secretary for manpower and reserve affairs, sent the memo to each branch to remind them that they were responsible for using a specific percentage of taxpayer funds to operate MWR programs.
“These standards are not optional and are not subject to Military Department waiver,” Weiler wrote.
MWR programs are required to receive a percentage of funding from Congress through either appropriated funds or non-appropriated funds, or a combination of the two.
The DoD requires that programs determined to be “Category A” must receive 85 percent of funding from taxpayer dollars. “Category A” are considered “mission sustaining programs” and “promote the physical and mental well-being of the military member,” according to Military One Source.
“Category B” requires 65 percent of operational costs to come from taxpayer dollars. Those programs consist of community support programs like child development centers, which charge families for use and therefore get some funding from customers.
“Category C” are programs that are nearly fully self-funded and include golf courses, base clubs, and recreational lodging. These programs are authorized some limited appropriated funds.
Weiler had previously sent a memo in June to remind the services to return their feedback on MWR funding by August, but both the Army and the Navy missed their deadlines.
Rather, the Army decided to cut $105 million from MWR funds, and the Navy only sent feedback on its Category A funding.
“I thought we needed to up our communication,” Weiler said in response to the Army’s planned slashing of the MWR budget.
The executive director of The National Military Family Association, Joyce Raezer, told Military Times that, due to budget cuts, sequestration, and changes to various other budgetary items, she believed families didn’t expect much from the services. “There are too many other worries,” she said.
Of the services, only the Marine Corps did not meet the 85 percent requirement, coming in at 77 percent of Category A program expenses funded by taxpayer dollars.
Every service fell short of utilizing the required percentage of taxpayer funding for Category B programs.
Weiler called out the Air Force specifically for not having met the requirements for four straight years, with no plan in place to correct the issue.
In the memo sent to the Army, Weiler asked Army Secretary Eric Fanning to halt the planned $105 million cut, a plea that was accepted and approved by Fanning. The Army plans to complete an analysis of its MWR programs and funding later this year.
Military.com reported that Colonel James Love told them that the $105 million cut would go into effect once the Pentagon approved the Army’s requested changes. He blamed a lack of “good business” practices, such as not raising prices for MWR programs, for the decision to cut the Army MWR budget.
“It’s good for families,” Love told Military.com. “But it’s not sustainable.”
Some 18.5 million honorably discharged veterans now have a lifetime benefit enabling them to shop online at ShopMyExchange.com, marking the first expansion of military exchange privileges since 1990.
“The Exchange is honored to open its virtual doors to millions of deserving veterans,” said Tom Shull, the Army and Air Force Exchange Service‘s director and CEO, a Vietnam-era Army veteran.
“There are many generations of service members who have not been properly recognized,” he added. “This new benefit acknowledges their service and welcomes them home. This is something veterans can enjoy the rest of their lives.”
Purchases Improve Quality of Military Life
Every purchase veterans make online will help to improve the quality of life for those who wear the uniform today, Shull noted, as exchange earnings support programs such as combat uniforms below cost, fitness centers, child development centers and youth programs on Army garrisons, Air Force outdoor recreation programs, school lunches for warfighters’ children overseas and more.
“This is a virtuous cycle,” he said. “As a veteran myself, it is an honor to pay forward support to active-duty service members and their families.”
Excitement for the new benefit has been building for months, AAFES officials said, thanks to social media shout-outs from Mark Wahlberg and Marcus Luttrell, Dwayne “The Rock” Johnson, Richard Rawlings and other celebrities. As a result, they said, more than 255,000 veterans verified their eligibility for the benefit before its official Nov. 11 launch.
Starting with a base of $534 billion in discretionary funding, coupled with another $51 billion for Overseas Contingency Operations funding (aka the “war budget”), the Pentagon’s spending power comes to a grand total of $585 billion.
Defense industry giants, Boeing, General Dynamics, Northrop Grumman, and Raytheon posted second-quarter earnings on Wednesday (Lockheed Martin earnings released last week).
Here’s a look at how they did…
Boeing, the world’s largest plane maker, reported a smaller-than-expected second Q2 loss on Wednesday. The company’s first quarterly net loss in nearly seven years amounted to $234 million.
Boeing’s KC-46 tanker program for the US Air Force is delayed from August 2017 until January 2018 due to test flight problems. Modifications to the aircraft are expected to cost Boeing an additional $393 million (after taxes).
“If we are unable to obtain sufficient orders and/or market, production and other risks cannot be mitigated, we could record additional losses that may be material, and it is reasonably possible that we could decide to end production of the 747,” Boeing said in its filing on Wednesday.
Earlier this year, Boeing won a US Air Force contract worth $25.8 million to start work on the next fleet of Air Force One aircraft.
The aging Air Force One and it’s twin decoy will be replaced with two Boeing 747-8 and are expected to be operational in 2020.
Up to Wednesday’s close of $135.96, the company’s shares had fallen about 6% since the start of the year.
•Operating cash flow of $1.2 billion (with 28.6 million shares repurchased for $3.5 billion)
•Cash flow of $3.2 billion, (down 2% from 2015)
•Core earnings per share loss of $0.44
•Revenue rose 1% to $24.8 billion (from earlier estimate of $24.5 billion)
• Demand still high with more than 5,700 commercial plane orders still in the works
Reuters contributed to this report.
General Dynamics began their earnings conference call on Wednesday highlighting their “very good second quarter.”
The Falls Church, Virginia-based company announced $7.6 billion in Q2 revenue and achieved $758 million in net earnings.
General Dynamics recognized their aerospace unit (with a revenue of $2.13 billion) and maritime division.
At the end of June 2016, the defense giants’ National Steel and Shipbuilding division won a $640 million Pentagon contract to construct a T-AO 205 Class Fleet Replenishment Oiler. The contract could be worth up to $3.16 billion if the Pentagon decides to buy an additional five ships.
In March, the US Navy announced that General Dynamics will be the prime contractor for development of 12 new submarines.
Shares rose less than 1% to $145.09 in the afternoon and since the beginning of this year, the company’s stock has climbed 5.2%.
•Revenue fell to $7.67 billion (down by $217 million from the Q2 2015)
•Raised 2016’s full-year earnings forecast to $9.70 per share (from $9.20, analysts’ expect $9.52)
•Profit margins could be as high as 13.8% (up from January 2016 estimate of 13.3%)
Reuters contributed to this report.
While the F-35 Lightning II continues its turbulent march to combat readiness, the jet’s manufacturer posted better than expected quarterly revenue earnings last week.
Lockheed Martin, the Pentagon’s top weapons supplier, also lifted its 2016 revenue and profit forecasts for a second time — despite significant snags in developing America’s most expensive arms program.
Considered a bellwether for the US defense sector, Lockheed Martin’s stock also posted a record high of $261.37 in early trading on July 19. What’s more, the world’s largest defense contractor’s shares were already up approximately 18% this year.
“(The) consensus expectations are finally positive for the F-35 and for improvement in the defense budget, which has led to a higher valuation,” Bernstein analyst Douglas Harned wrote in a note, according to Reuters.
The now nearly $400 billion F-35 weapons program was developed in 2001 to replace the US military’s F-15, F-16, and F-18 aircraft.
• Net sales rose to $12.91 billion (from $11.64 billion in Q2 2015)
•Net income rose to $1.02 billion (or $3.32 per share), which is up from $929 million (or $2.94 per share) in Q2 2015
•Generated $1.5 billion in cash from operations
•Raised 2016’s profit forecast to $12.15–$12.45 per share (from $11.50-$11.80)
•Raised 2016’s full-year sales of $50.0 billion-$51.5 billion (from earlier estimate of $49.6 billion-$51.1 billion)
Reuters contributed to this report.
Northrop Grumman’s earnings report showed sales reaching $6 billion with the company’s aerospace unit seeing a 4% increase in sales due to higher demand for drones and manned aircraft.
“Autonomous Systems sales rose due to higher volume on the Global Hawk and Triton programs, partially offset by lower volume due to the ramp down on the NATO Alliance Ground Surveillance program,” the company said in a statement.
“Manned Aircraft sales rose due to higher restricted volume and higher F-35 deliveries, partially offset by fewer F/A-18 deliveries and lower volume on the B-2 program.”
It should be noted that Lockheed Martin, is the prime contractor for the F-35 Lightning II, however, Northrop Grumman develops the fifth-generation fighter jets’ center fuselage, radar and avionics suite.
Northrop is also a subcontractor to Boeing on the F/A-18 Hornet.
•Sales increase by 2% to $6 billion (compared to $5.9 billion in Q2 of 2015)
•Earning per share increase by 4% to $2.85
•Earning per share guidance increase to $10.75 to $11.00
•Cash from operations of $604 million
Raytheon, the world’s largest missile manufacturer, announced $6 billion in net sales for Q2 2016, which is up 3% compared to $5.8 billion in the second quarter 2015.
Earnings per share was $2.38 compared to $1.65, this time last year.
“We begin the second half of 2016 with continued confidence in our growth outlook, and we have increased our guidance for earnings and cash flow as a result of our strong year-to-date performance,” CEO and Chairman Thomas A. Kennedy said in a statement.
Mission-focused military life places a high priority on physical health. But for some, financial health may be an afterthought.
Navy veteran and fitness and lifestyle content creator, Austen Alexander, recognizes the benefits and challenges of both. When he went into the Navy, the military kept him fit. But during his first years of service, Alexander accumulated debts that impacted his financial wellbeing as well as his mental and physical health.
Alexander says he went “a little haywire” while at his first duty station. He admits there was a void he was trying to fill being away from home. He bought things he couldn’t afford…all on credit. The discipline he used in the gym didn’t translate to his finances.
“I was living the good life on money I didn’t really have,” says Alexander.
The military offered no training in finance to show him how to manage his money, how to open a savings account, or when to begin investing. At his low point, Alexander started to educate himself on financial fitness. He dove into books. He taught himself financial fitness and he decided to reduce his credit card debt.
He realized that many principles of physical fitness are similar to those of financial fitness. They both require patience, discipline and consistency to be successful.
By applying principles of physical fitness to his financial life, Alexander was able to pay down debt and start a business. Today, he is in the best shape of his life. The lessons Alexander learned along the way are an inspiration to others – both in and out of uniform.
His plan helped him to transfer the balance of his highest card to a new card with a 15-month, 0 percent interest rate. This allowed his payments to go directly toward principal, not interest. He also created a multi-tiered approach to quickly pay off debt. Here are some highlights:
Would military spouses be happy with any ol’ job, as long as they were out of the house and earning an honest income?
My guess is, generally, no.By and large, military spouses are calling for employment that does much more than pay the bills. They want meaningful, purposeful employment that helps them advance their goals. Numerous studies support this, and the military spouse employment movement is making enormous strides.
So, if you’re a military spouse looking for meaningful employment, where should you start? What are viable career options?
Given your lifestyle, you’re probably looking for something portable, flexible, universally necessary and barrier-free. It just so happens that a number of our country’s growing industries have opportunities that fit the bill.
Let’s take a look at five promising industries that military spouses should consider for employment.
1. Health care
According to the Bureau of Labor Statistics (BLS), the health care industry will have the highest growth over the next decade, predicting over 3.4 million additional jobs by 2028. That’s a lot of opportunity!
Nurses, home health care aides, social workers and medical aides are examples of jobs in this field. These jobs generally pay well and are necessary everywhere (check!), making you highly marketable every time you PCS. While the process of transferring licenses or honoring licenses from other states has yet to be completely smoothed out, officials are working to lift those barriers (check-almost!).
One thing to consider is that not all health care-related jobs require a license. For example, home health aides, the fastest-growing subsection of the industry, may not have to be licensed, but certification requirements vary depending on the state.
You probably can’t go a day without hearing that a friend has started a home-based business, quit her job to become a freelancer or established his own web-based company. Entrepreneurship isn’t a trend that will soon fade; it’s a legit movement, which many military spouses are joining, excited to take ownership of their own careers.
While entrepreneurship can be risky, it offers you portability and flexibility (check! check!). Depending on the type of business you’re running, you may need to maintain and transfer licenses across state lines, but you’ve probably done your homework and found a niche that’s needed in the market (check!), making any paperwork worth it.
Plus, numerous organizations have established training and support programs, designed to help military spouse entrepreneurs get their businesses off the ground in the strongest way possible. As a military spouse entrepreneur, you’ll have a wide community of experts and supporters ready to offer advice and mentorship, as well as cheer you on.
3. Leisure and hospitality
Like health care, BLS predicts favorable opportunity for the leisure and hospitality industry. Over the next 10 years, BLS says that over 1.5 million jobs will be added to this sector.
This industry is growing across America, including right in the backyard of every military spouse. It just so happens that these leisure and hospitality companies were named among the 2020 Military Spouse Friendly Employers: Motel 6/Studio 6, Hilton and La Quinta by Wyndham.
These companies offer tailored onboarding practices, career portability and flexibility (check! check!), opportunities for advancement and more – specially for military spouses. Plus, you generally won’t have to worry about transferring a license or going to school for decades to begin working (check, check and more checks!).
4. Professional services and business
As a military spouse, you’re resourceful, adaptable, cool under pressure and organized. These “soft skills” make you an excellent contender for the types of jobs in the professional services and business sector.
This sector, which BLS projects will add 1.66 million jobs by 2028, includes a wide variety of jobs, such as sales managers, human resources managers, executive assistants, advertising, financial managers, operations managers and more. It even includes highly technical jobs like architects and engineers.
You can adapt your mad military spouse skills to suit a number of different career paths, and many of them could lead to remote work (check!). For example, virtual assistants are becoming hugely popular with real estate companies, corporations and high-achieving entrepreneurs. Many companies are outsourcing managerial and research work to remote employees, too.
Think about this industry as your oyster. With so many options to consider, you can zero in on just the right job that suits your ever-changing lifestyle – talk about flexibility! (Check!).
5. Information Technology
Technically, this bad boy falls under the professional services industry, but since it’s such a behemoth, it makes sense to discuss it separately. There’s not a corner of civilization that isn’t wired, making information technology experts absolutely essential to any business or organization (check!).
Despite what you might think, this industry offers a lot of flexibility, too (check!). Although your particular skill set might be defined, the type of company you can apply it to (i.e., your work environment) ranges far and wide.
From schools to ski resorts, national corporations to nonprofit offices, information technology specialists are needed everywhere. Whether you prefer working solo or with a team, in an office or at home, chances are that no matter where you PCS or how often, you’ll be able to take your work in computers with you.
We’re down to the wire at our house for Christmas gifts. Due to our crazy travel and flight schedules over the last two months, my husband and I have barely even scratched our shopping list for gifts this year.
And yeah, I know we suck.
So we decided we’d find a few quick gifts that are still awesome and won’t totally break the bank.
1. You almost can’t go wrong with Disney
Disney offers a special program for the military called the Armed Forces Salute. Service members or their spouses can purchase either a five-day or four-day package for $224 or $209, respectively. This is a savings of nearly 50 percent.
Total cost of taking my family to Disney for five days: $1,120 (does not include lodging).
2. Buy an iPhone and get $250 off an iPad
Verizon does this thing where, if you buy an iPhone, you pay for it monthly, and only pay the tax up front. But right now, if you buy that new iPhone your daughter has been eying, you’re going to get $250 off an iPad — which puts the iPad mini at around $150.
Don’t forget to sign up for your military discount if you haven’t already. Total cost of my Verizon shopping trip today for tweenager gifts: less than $250.
3. Great news those of you who wear Oakleys
If you don’t already know, Oakley has a thing called the Oakley Standard Issue, offering approved eye-pro sunglasses to service members at about a 25 percent discount. Total cost of my husband’s preferred shades: $128.
4. Pretty much anything from Best Buy, amiright?
Best Buy has a 15 percent military discount, so it looks like tomorrow I’ll be buying a bunch of electronic gifts I won’t know how to use.
But the kids and husband will be stoked!
5. Last (but certainly not least), adult grape juice
It’s kind of like a gym membership, except you don’t have to go anywhere, and you don’t have to wear yoga pants (though I do recommend wearing something comfy).
The only thing is that instead of the gym, you get a case that you pick up and set down. Okay, it’s wine — a wine club membership, to be exact.
With the military discount at Twisted Roots Vinyard, it’s $255 every four months. That’s a lot of wine, and it’s worth it.
Since transitioning out of the military, I’ve had the, um, “pleasure” of being around a lot more civilians. Some of the questions I’m asked on an annoyingly regular basis are, “Aren’t VA loans awesome? Don’t you get a free house? Did you get yours?”
After polling some veterans, I realized I should give a little brief on the subject. Time to slay the myth around what a VA loan is or isn’t.
First: The VA loan is, in fact, not a loan at all.
The VA Loan Program, created in 1944 as part of the Servicemen’s Readjustment Act, is a service the Department of Veteran Affairs created to help veterans returning from WWII buy a home.
According to the VA website, “VA Home Loans are provided by private lenders, such as banks and mortgage companies. VA guarantees a portion of the loan, enabling the lender to provide you with more favorable terms.”
Essentially, the VA will co-sign a loan with you, and that gives you a few perks.
Why is co-signing helpful?
When new adults try to rent an apartment or buy a car, most people won’t trust them unless they get a “guarantor” to co-sign the loan or the lease, usually in the form of a parent or older family member. After faithfully paying rent and payments on a loan or two, civilians in their 20s build up credit and no longer need anyone to sign off their financial choices.
Military personnel and veterans are a bit different. Our lifestyle inherently makes us look financially untrustworthy.
“How are you 24 with no rental history?” I live in a barracks.
“You seem to have moved every two years...” Yep.
“You disappeared from our system for over a year except for credit card transactions from… Afghanistan. Are you a terrorist?” It’s called deployment!
Luckily, we have an Uncle Sam willing to co-sign on such a big purchase, or what’s called a Purchase Loan. You’ll be able to get better interest rates than your credit alone could get you, and you can skip the down payment.
Just because you can get a loan for down, doesn’t mean you should. Regular people are expected to drop at least 20% value of the house as a down payment.
Here are three different scenarios. Same house, same interest rate, same 30-year loan.
The less you pay upfront, the more you have to pay in compounded interest for the next 30 years. 30 years. That’s your entire military career plus half your next career!
Being able to do less of a down payment is useful in a few scenarios. For example, if you live in California, chances are you won’t ever have 0K cash for a 20% down payment on the crazy prices out here.
A few resources to see how much you can afford while buying a house: RedFin has a quick calculator (above) as well as a more in-depth option. USAA also has one with different loans they offer.
Warning: Anything offered by Uncle Sam comes with a catch
According to the VA website, “VA-guaranteed loans are available for homes for your occupancy or a spouse and/or dependent (for active duty service members). To be eligible, you must have satisfactory credit, sufficient income to meet the expected monthly obligations, and a valid Certificate of Eligibility (COE).”
A few takeaways:
VA Loans are only for houses you will live in, NOT commercial or investment properties.
You have to live in the house for at least one year.
You can’t buy a multi-family or multi-unit property. No duplexes or apartment buildings (Trust me, I tried).
Banks set the terms of the loan (interest rate, payment schedule, etc.) based on your credit and current job, not the VA.
The VA might not approve you.
Requires at least 181 days active duty completed to be eligible.
There is a limit on how much you can borrow without making a down payment based upon where in the country you live.
When good loans go bad
After nearly an hour and being transferred 7 times, I finally spoke to the most unenthusiastic Federal Employee in existence to answer my unanswerable question: “Are VA loans any different in foreclosure or the foreclosure process than a regular civilian mortgage?”
The answer: No, mostly.
The VA will not step in and save you, there are no cash handouts, and the VA will not shield you from the banks that are after their money. The VA will take care of a few fees dealing with the lenders, but that is about it. For more questions: 1-877-827-3702 or visit the payment problems page.
Defense Department officials told lawmakers Wednesday they hope to forgive about 90 percent of cases involving thousands of California National Guard members that auditors say received improper bonuses during the height of the wars in Iraq and Afghanistan.
“It is my hope that by the end of the year, we will have something between 1,000 and 2,000 cases total out of the universe of 17,000 that are subject to review,” Peter Levine, undersecretary of Defense for Personnel and Readiness, told members of the House Armed Services Committee.
Levine was among Pentagon and Army National Guard officials who testified at the Dec. 7 hearing to tell lawmakers how the Pentagon plans to resolve what some are calling a betrayal of the troops by next summer and prevent similar incidents from occurring in the future.
“Compensation, whether it is a bonus for a service agreement or regular pay, is an obligation to our service members and their families that they should not have to worry about,” said Rep. Joseph Heck, a Republican from Nevada and chairman of the panel’s Military Personnel Subcommittee.
“I find it unacceptable that we would place the additional burden of years of concern about the legitimacy of a bonus payment or a student loan repayment on those who volunteer to serve,” he added.
Lawmakers have come up with a compromise as part of the National Defense Authorization Act that calls on the Pentagon to forgive the enlistment bonuses and student loan benefits unless the soldier who received the money “knew or reasonably should have known” that he or she was ineligible for it.
The Los Angeles Times/Tribune Washington Bureau reported last month that the Pentagon was demanding repayment of enlistment bonuses given to California Guard soldiers to help fill enlistment quotas for the wars. Many of the soldiers served in combat, and some returned with severe injuries.
Many of soldiers were told to repay bonuses of $15,000 or more years after they had completed their military service. Student loan repayments, which were also given out improperly to soldiers with educational loans, sometimes totaled as much as $50,000.
“Many reasons these cases are particularly troublesome,” Levine said. “Many of them are based on a technical deficiency.
“Particularly in cases like this, where we have a service member who made a commitment on the basis of a bonus and served out that commitment, so when we come in later after someone has fulfilled their commitment and then question on a technical ground why they received a bonus in the first place — that is a particular hardship,” he said.
There are two basic categories of cases, Levine said. One type involves about 1,400 cases already ordered to pay back bonuses. The second category of 16,000 cases involves soldiers who were put under suspicion or threat of recoupment of bonuses they received.
“For those cases that are in recoupment, we have the question of, ‘Are we going to dismiss the case? Are we going to forgive the debt? Are we going to repay the soldier if we decide it was improper?’ ” Levine said.
Through detailed screenings, “It’s my hope we can get from about 1,400 down to about 700 … that’s a goal; I don’t know what exact numbers we can get to.”
As for the larger category of about 16,000 cases, “We have greater discretion because we haven’t yet established the debt yet,” Levine said.
Several “rules of thumb” will be established in an attempt to:
— Screen out cases that are more than 10 years old.
— Screen out cases with a debt of $10,000 or less.
— Screen out most of the cases that involve enlisted members and lower ranking members without prior service on the basis that it’s unlikely they would be able to understand their contract fully without assistance.
“As we go through those screens from that second universe of 16,000 or so cases, I expect to reduce that by about 90 percent, so we get down to about 10 percent,” Levine said. “We will then put that universe through the kinds of substantive screens, and I hope to get that down further.
“The objective is to find that easy ones first, get rid of those, tell people ‘we are not pursuing you … we are telling you, you are off the hook; we are done with you,’ so we can focus our resources on the cases that are the most significant.”
Many lawmakers said they felt the California Guard scandal severely damaged the trust of current Guard members across the country.
“In some of these cases, there have been troops — through no fault of their own — that are suffering the consequences,” said Rep. Paul Cook, a Republican from California. “It’s our fault, and I use that word collectively on behalf of all officers that are in positions of authority. We betrayed the trust of the troops, and there is no excuse for that.”
Rep. Susan Davis, a Democrat from the state, said it’s “critically important that we do not forget service members and their families that have been deeply affected by this.”
“Once these families have encountered financial hardships, we know it can be truly difficult to recover. Even if we return their bonus, we have already upended their lives by creating unnecessary emotional stress and financial instability.”
Army Master Sgt. Toni Jaffe, the California Guard’s incentive manager, pleaded guilty in 2011 to filing false claims of $15.2 million and was sentenced to 30 months in federal prison.
But National Guard officials told lawmakers that many others were held accountable, including leaders who failed to provide proper oversight, said Maj. Gen. David S. Baldwin, adjutant general for the California National Guard.
“We punished, within the California National Guard, 61 people — including firing four general officers and two full colonels,” Baldwin said.
The Department of Justice prosecuted 44 soldiers. Of those, 26 were found guilty and convicted, Baldwin said. Another 15 cases are pending, and the remainder were either dismissed or acquitted, Baldwin said.
Lt. Gen. Timothy Kadavy, director of the Army National Guard, told lawmakers that the National Guard Bureau has taken steps to prevent this from happening again.
In 2010, the bureau conducted a review of all incentive programs across all states territories and the District of Columbia and found “no systemic fraud,” Kadavy said.
In 2012, the National Guard stood up the Guard Incentive Management System, or GIMS, which now provides “a centralized oversight program for bonus and incentive payments,” he said.
In 2016, the Army Audit Agency conducted an “external review” of GIMS and validated its effectiveness, Kadavy said. Auditors found that the system “substantially improved the controls of eligibility monitoring and payment phases of the incentive process.”
Despite the steps being taken to resolve the problem, officials admitted that they should have known about this a lot sooner.
“We have oversight on the California National Guard, the Army has oversight, the National Guard Bureau has oversight,” Levine said. “We were not aware of this until we read it in the newspaper, and that is on us; we missed this.”
As the holidays get closer, many military families find themselves looking for ways to save money and budget appropriately for the upcoming gift-giving season. Random COVID-19 impulse buys, a downward spiraling economy, job loss, and purchases related to new homeschooling or virtual schooling curriculum are leaving many of us financially stressed in 2020. Check out these holiday budgeting tips that will help you start the new year off on the right financial footing.
Tips on budgeting for the holidays
So how do you try to save and budget for this holiday season when your finances may have taken unexpected hits because of the coronavirus pandemic? Financial expert and military spouse Lacey Langford from The Military Money Expert says there are three things you should evaluate when you start budgeting for the holidays: your current holiday savings, the total amount you want to spend for the holidays, and who is on your list.
“Knowing how much you have to spend is the jumping-off point for your budget,” Langford said. “Then you can look at [ways to save] between now and Christmas.”
You will also want to examine how much you want to spend for the holidays. You can do this by looking at your current savings account balance. Subtract the amount you want to keep in savings as your emergency and investment amounts to find your total holiday shopping budget. Once you have that number, you can write down the people on your holiday shopping gift list, and assign each person an amount of money you would like to spend on them. “[When you] know who you’re buying for it makes it easy to firm up your spending budget,” says Langford.
“Save money every month, starting in January. … Set up an automatic $100 transfer from your checking to your savings at the beginning of the month. By the time November rolls around, you’ll have $1,100 to holiday shop with,” Langford suggests.
But don’t fret — if you aren’t that organized with your holiday budgeting this year, you can still do some things to help you save some cash for the next several weeks:
Don’t procrastinate: Shop sales when you see them. You can even do this throughout the year.
Use apps like Qube Money that utilizes the popular envelope system or Tiller that helps you budget throughout the year.
Cancel your cable or streaming services.
Honey and Rakuten are two websites that offer cash back for purchases made on other sites — even Amazon, Wal-Mart, and Target participate
“Don’t forget to use your military benefits when shopping for the holidays,” Langford said.
Shop My Exchange, ID.Me Shop, and GovX are all military-specific and provide discounts or lists of companies that give military discounts online.
The military exchanges also offer a new layaway program as well. Layaway not only helps you pay for what you can manage in a certain timeframe but also allows you to stick to your monthly budget. There are several different options for layaway, from 30 days for clothing and handbags up to 120 days on fine jewelry. A deposit purchase of $25 and 15% of the item’s purchase price, plus service fees are required to put your items on layaway at any military exchange. You can find out more information by visiting the Exchange website.
Even if your family is in a good place financially, you should start considering your holiday budget about 6-8 weeks using the funds you have saved away throughout the year. Budgeting is a great way to keep your family on track, make sure your nest eggs continue to thrive, and help your family prepare for the unexpected — like a worldwide pandemic.