If there’s one thing military families understand it’s that the only constant in military life is constant change. That philosophy extends to frequent moves – not only changing cities but also changing homes.  Because of that, many military families opt to rent instead of buying houses. But, surprisingly, many families who rent don’t know about renters insurance or choose not to have it. Unfortunately, when a disaster strikes, not having renters insurance can be the difference between total devastation and the ability to recover.

---

What Is Renters Insurance?

Renters insurance is specifically designed for people who do not own their homes. While your landlord certainly has insurance on the building that you’re dwelling in, that insurance does not extend to what’s inside the home. Renters insurance will allow you to replace everything you own – depending on the type of coverage you have – in the event of a fire, water damage, tornado, vandalism, theft, explosion, or similar disasters. Additionally, most policies also cover medical expenses for guests who are injured on your property.

For those living in government or installation housing, renters insurance may already be included or you may only be covered for specific incidences.

Why Do You Need Renters Insurance?

Just like you purchase automobile or health insurance in case of an emergency, renters insurance protects you in the same way. Imagine returning home from work to find that your entire apartment has been ransacked, and the intruders left nothing of value behind. Renters insurance would allow you to replace what you lost – either cash value or the cost to repair/replace damaged items. It’s a layer of protection for yourself and also provides peace of mind that you won’t be left “high and dry” when a disaster strikes.

What Does Renters Insurance Cover?

As mentioned above, most standard policies cover damage caused by a fire, water damage caused by utilities, vandalism, theft, explosion, and similar disasters out of your control. However, most do not cover damage caused by floods, earthquakes, or mudslides.

A renters insurance policy also has a provision for loss of use in the event that you have to vacate the premises temporarily – so you’ll be reimbursed for a hotel, food, and other related expenses while you wait to go home. Additionally, most plans also include liability coverage which pays for medical expenses in case someone suffers an injury on your property (E.G. If your dog bites the neighbor or someone slips and falls in your kitchen). You may also have credit card/bank forgery coverage which protects you against fraud attempts stemming from a theft. Renters insurance also extends to moving as it covers damages or theft caused by moving companies.

Typically, there are two types of renters insurance policies:

1. Broad form usually encompasses everything mentioned above minus floods, earthquakes, and mudslides. This is the most common and cheapest option.
2. Comprehensive form covers all disasters unless specifically excluded from the policy.

How Much Is Renters Insurance, And Where Can I Purchase It?

Renters insurance can run as low as $12 a month. That’s roughly $150 to replace everything you own in the event of a disaster. Most policies cover $30,000 – $50,000 for apartments and $100,000 for homes with a deductible as low as $500, but check your policy to be sure. Keep in mind that there is also the option to add-on to your policy if you’re worried about something specific like if you live in a flood zone or if you have a customized gaming system.

To purchase, shop around by contacting multiple insurance agents for quotes. You can also start with your current automobile insurance provider and see if they offer a discount for bundling services or check with your landlord for recommendations. To lower the cost even more, ask if the company provides a military discount.

For military families, what we have at home has often been collected from state to state and is all we have to build upon with each move. Don’t take a gamble on your irreplaceable personal possessions. For a monthly cost of less than of a tank of gas, renter’s insurance gives you peace of mind in knowing that if and when a disaster strikes, you’ll be able to rebuild your life.

---

Kristen Baker-Geczy is a communications specialist, active duty military spouse, and former MWR marketing coordinator. She was also deployed to Southwest Asia as an Air Force contractor.

---

Related Articles
Living on Military Bases	Housing & Home Ownership
Rent After Retirement	BAH Rates
Servicemembers Group Life Insurance	Last Will & Testaments Before Deployment

Why you should rent when transitioning out of the military

Transitioning out of the military can be an exciting time. Often, veterans and their families find themselves looking forward to finally putting down roots. This includes embarking on a new career, returning to school, and, of course, becoming a homeowner.

While it’s easy to understand the desire to immediately buy a house upon leaving the military, it may be a more financially stable decision to continue to rent. This is the biggest investment purchase of your life. Here’s why you should wait:

Your entire way of life is changing – your finances, your job, your residency, and the list goes on.

Any life-changing event brings a healthy amount of stress with it. Veterans exiting the military face a variety of stressors. They have to make seemingly endless decisions coming from all angles while deciding what’s next.

Plus, consider that you’ll be going through a major shift in financial stability. You may be working with the Department of Veterans Affairs to file a disability claim, planning for retirement, or facing a tedious job hunt. You are deciding what career field you want to be in or maybe you’ve decided to hold off on returning to the workforce entirely while you go back to school. You’re figuring out where you want to live, which oftentimes means another move. The transition doesn’t only affect you, but also your dependents. Will your spouse return to the workforce or change careers? Where will your children go to school? And it’s worth mentioning that you’re also experiencing a change in daily schedule and social activities. That’s a lot to deal with right off the bat.

Even if you are fortunate enough to secure a job before leaving the military, studies show that you will change jobs and move at least once in the first two years. According to a recent study by the Institute for Veterans and Military Families and VetAdvisor, almost half of post-military veterans stayed in their first job after separating for less than one year. Further, 59 percent are currently living in a different state from their home of record, and 38 percent said their residency had changed since leaving the service. Statistically, the odds are pretty high that you will change jobs and move to a different state at least once upon separation.

As understandable as it is to want to buy a house as soon as possible, there’s a reason Americans say buying a home is one of the most stressful life events in modern life. Most homebuyers aren’t simultaneously changing their careers. For veterans, imagine buying a home in the first place you land only to realize that you don’t like your job or your neighborhood. But now you’re tied to a house and a mortgage and unable to get out from under it. So, what should you do? Consider renting for at least one year, but possibly two while you settle into civilian life. Then, you’ll be better suited to “roll with the punches” and know that you’re making the best decision for you and your family.

Take the process one step at a time. First make the decisions that have to be made, like finding new employment or deciding where you want to move, and then go from there. Don’t let a sense of urgency dictate the most important purchase you ever make and don’t rush it. You have enough to deal with already.

---

Kristen Baker-Geczy is a communications specialist, active duty military spouse, and former MWR marketing coordinator. She was also deployed to Southwest Asia as an Air Force contractor.

---

Related Articles
VA Home Loans	Successful Military-to-Civilian Transition
What Can You Buy with a VA Home Loan?	Best States with Veteran Benefits
VA Home Loan Myths	State Veteran’s Benefits

What do veterans with VA home loans need to know about natural disasters and how they may affect the ability to maintain the mortgage loan without risk of foreclosure? There are many parts of America that struggle with wildfires, hurricanes, mudslides, tornadoes, and other natural disasters. The Department of Veterans Affairs has policies to help protect VA borrowers and their homes.

VA Mortgage Loan Policy on Foreclosures in General

VA loan policy addresses foreclosure issues with one main aspect emphasized over and over again which is avoidance. The VA official site urges all VA borrowers to contact their lenders at the first sign of financial trouble to get the most options available to avoid loan default and foreclosure.

According to the VA official site, “When a VA-guaranteed home loan becomes delinquent, VA provides supplemental servicing assistance to help cure the default.” The participating VA lender has “the primary responsibility of servicing the loan to resolve the default” according to the VA.

But in circumstances where the lender is “unable to help the borrower” the Department of Veterans Affairs has loan technicians working in the VA’s eight Regional Loan Centers. They “take an active role in interceding with the servicer to explore all options to avoid foreclosure.”

VA Mortgage Loan Policy on Natural Disasters

VA borrowers affected by natural disasters should know that there is help available in the recovery process. It is not just from the Department of Veterans Affairs or the lender. There are additional resources to prevent foreclosure, help recover the home from damage, or find a replacement home may be available from FEMA, the Small Business Administration, local charitable groups, and military relief societies.

VA policy includes encouragement to seek out these sources of help in addition to whatever is needed from the lender. But it also encourages VA lenders to take specific steps to help those affected by natural disasters.

VA Borrowers in Distress

The VA official site states, “VA encourages servicers of guaranteed loans in disaster areas to extend all possible forbearance to borrowers in distress.” Supplemental loans and/or loan modification options should be explored where appropriate. “It is the loan holder’s responsibility to counsel borrowers concerning assistance that may be available.”

Note that those statements are aimed at lenders who have “borrowers in distress” and the cause of that distress may or may not be a natural disaster. If you are afraid that your VA home loan is threatened by foreclosure action for any reason (not just a disaster), call your lender and ask to receive the counseling you are entitled to about your options to avoid losing your home.

Department of Veterans Affairs policy for homeowners affected by natural disasters includes encouraging lenders to impose a moratorium on foreclosure action in such cases. The official site reminds us that the lender is “ultimately responsible for determining when to initiate foreclosure and complete termination action.” But the VA recommends a 90-day hold on new VA loan foreclosures in the disaster area.

The VA Does Not Control Participating Lenders

As you can tell by the language in the quotes above from the VA official site, the Department of Veterans Affairs does NOT control participating VA lenders. They do not provide direction to them in making choices about which loans must be foreclosed upon and which ones qualify for assistance.

Your VA lender may or may not choose certain actions in the wake of a disaster. But those who do not communicate with the lender in a timely manner after the damage has been done risk missing out on some forms of help available to those who are proactive.

In the same way that the VA does not set or regulate VA loan details such as interest rates or FICO score requirements, it’s the lender’s job to also provide the borrower with the options needed when disaster strikes.

But the borrower must make the effort to contact the lender as soon as possible.

Mortgage Payments Are Still Due After A Natural Disaster Unless You Have Made Other Arrangements with Your VA Lender

VA mortgage loan payments should not be suspended even if your home is completely uninhabitable after a natural disaster. VA loan policy does not include any kind of automatic mortgage payment suspension option after a disaster. Lender standards will play a very important part in what happens next.

The key to understanding how to proceed here is that it may be possible to arrange for suspended payments or make other arrangements with the lender. But the borrower is definitely the one responsible for making contact with the financial institution and making those arrangements.

Don’t let too much time pass before communicating with the lender. Your options for loan modification or other foreclosure avoidance measures are better the sooner you make arrangements. If you miss too many payments, your options may be restricted.

Some borrowers might be tempted to delay their mortgage payment until they have made an insurance settlement. There are two reasons to discuss this approach with your lender.

One, your lender can help you make smart choices about how to proceed with your mortgage and there may be a better option available to you.

Two, borrowers have no guarantee as to the speed of an insurance settlement process. If there are any disputes over your claim or how the insurance company handles your claim, the delay in your settlement money could be longer than you need to avoid running into trouble with your mortgage.

Some Natural Disaster Assistance May Be Dependent on A Federal Disaster Area Declaration

Some home loan options or disaster relief programs are only open to borrowers who live in an area that has been identified as a Federal Major Disaster Area. As soon as you know if your area is named as such, go to the FEMA official site as well as contacting your lender to see what assistance is open to you in such cases.

Special Phone Numbers for VA Borrowers Affected by A Natural Disaster

You can call the Department of Veterans Affairs directly to speak with a loan specialist about post-disaster options by calling 877‐827‐3702.

Disabled veterans who have used the VA Specially Adapted Housing Grant to modify a home later damaged in a natural disaster should call 877‐827‐3702 to check the availability of supplemental grants to assist with repairs to that home.

Reasons to Avoid Foreclosure

Falling behind on a VA home loan for any reason, disaster or not, can lead to foreclosure of the property. This is the case if a VA borrower doesn’t take immediate steps to prevent the loan from becoming delinquent and vulnerable to foreclosure.

Your VA lender can discuss your foreclosure avoidance options with you including loan modification, forgiveness or adjustment of a certain amount of missed payments where applicable, refinancing to catch up and get current on the mortgage, etc. Some may be tempted to let a damaged home slip into foreclosure, but there is an important reason not to do so.

In certain cases where a VA loan closed before January 1, 1990, borrowers can be held liable for the dollar amount of a claim made by the lender to the government because of the foreclosure action.

According to the VA official site, in such cases where VA has to pay a claim to the VA mortgage loan servicer, “the amount of such claim will be a debt you will owe to the Government. If your loan closed on or after January 1, 1990, you will owe the Government in the event of a default if there was fraud, misrepresentation, or bad faith on your part.”

VA Loan Foreclosure Avoidance Options

The following options may be available from your participating lender to help you avoid VA loan default and foreclosure regardless of whether a natural disaster is to blame for the financial difficulty that lead to missing mortgage payments:

• VA Loan Repayment Plans let the borrower pay a regular installment each month plus part of any missed installment payments.
• Special Forbearance where the participating VA lender agrees not to initiate foreclosure to allow time for borrowers to make up the missed mortgage payments.
• VA Home Loan Modification permits the lender to transfer the delinquent payments to the existing loan’s balance and start a new schedule of mortgage payments.

These are the options that permit the borrower to keep the home. In more drastic cases, avoiding foreclosure may be possible only by selling or transferring the property in one of the following ways according to the VA official site:

• Arranging a private sale of the home
• Short sale of the home for an amount below the payoff required
• Deed-in-Lieu of Foreclosure where the VA borrower deeds the property to the servicer rather than a foreclosure.

Important Takeaways for VA Borrowers Affected by Natural Disasters

• VA mortgage loan payments are still due after a disaster unless you have made other arrangements with your lender.
• The VA cannot modify your loan in any way. This is a process the borrower and lender must work together to accomplish.
• There is a difference between an area that has been hit with a natural disaster and such an area that is identified as a Federal Major Disaster Area. If you live in an area with such a designation, additional help may be available from FEMA, HUD, the Small Business Administration, and other agencies.
• Foreclosure avoidance requires you to work with the lender as early as possible when you know you can’t make payments.
• The VA advises lenders to issue a foreclosure moratorium for homes in a disaster area, but it cannot force them to do so.
• There are several options you can try with a participating VA lender to avoid foreclosure. Those options may include loan modification, a supplemental loan to bring you back into good standing on your mortgage. These options may vary depending on the lender, the borrower’s circumstances, and other factors.

Related Articles
Housing & Home Ownership	VA Loan Benefits for Disabled Veterans
FAQs About VA Home Loans	VA Loan Limits by County
VA Home Loan Options Overview	10 Veterans Benefits You May Not Know About

Home ownership is part of the American dream, and that’s no different for members of the U.S. Armed Forces. U.S. Department of Veterans Affairs (VA) Home Loans have helped make this dream a reality for nearly 22 million veterans and service members since 1944.

Once approved by the VA, these loans are provided by private lenders (banks and mortgage companies) and typically do not require a down payment or mortgage insurance because the VA guarantees a portion of the loan against loss, allowing the lender to provide more favorable terms.

Though the VA does not require a minimum credit score, most lenders do use credit score benchmarks as low as 620 making the loans easier to obtain for service members. Additionally, military buyers do not have to be first-time home buyers and can reuse this benefit.

With that in mind, VA Home Loans are meant to help veterans and service members obtain permanent housing. So, there are conditions on the types of properties buyers can purchase – you won’t be buying a farm or vacation home in Italy with a VA Home Loan.

Here’s a closer look at what can and can’t be purchased with a VA Home Loan.

---

VA Home Loans can be used to purchase:

• An existing home, or a condominium or townhouse in a VA-approved project. For condos or townhomes, the entire complex must be approved by the VA before the buyer can receive a loan for one unit. See the VA’s list of approved complexes here.
• A multi-unit property (up to four-plex), provided the buyer occupies one of the units. If more than one veteran is buying, then one additional unit can be added to the four. Additionally, if rental income from the property dictates whether or not the veteran can qualify for the loan, then the veteran must show that he or she has the background needed to be a successful landlord and have enough cash reserves to make payments on the property for six months without rental income.
• A manufactured (mobile) home or a modular home. Finding a lender to finance these types of homes can be difficult because they’re considered depreciating properties, although modular homes are more likely to appreciate – making finding a lender slightly easier. Additionally, manufactured and modular homes must meet certain conditions, like being affixed to a permanent foundation.
• A new construction. However, builders, plans, and building sites must be VA-approved, require several inspections, and the builders must provide at least a one-year warranty. Also, many lenders are hesitant to accept zero down financing for new constructions. Alternatively, veterans can obtain a non-VA Home Loan and refinance the home with a VA Home Loan once the building is complete.
• To simultaneously purchase and improve a home with energy efficient improvements. Improvements can include, but aren’t limited to, thermal windows and doors; insulation for walls, ceilings, attics, floors, and water heaters; solar heating and cooling systems; furnace modifications (not a new furnace); heat pumps; and vapor barriers.

---

VA Home Loans cannot be used to purchase:

• Property in a foreign country. Homes purchased using a VA Home Loan must be located in the United States, its territories, or possessions (Puerto Rico, Guam, Virgin Islands, American Samoa, and Northern Mariana Islands).
• A cooperatively (co-op) owned apartment. Financing for these types of shared ownership properties expired in 2011.
• A farm. If purchasing a farm, there must be a residence on the property which the veteran will occupy.
• Vacant land. There must be immediate plans to build a home on the property, but new constructions come with their own set of financing red-tape with the VA Home Loan (see section above).
• Investment property or a second home. Remember that VA Home Loans are intended to help veterans and military find permanent housing – second homes and investment property are considered surplus.
• A business loan.

---

Options for refinancing a VA Home Loan:

• Veterans who already have a VA Home Loan can reduce their monthly payments or shorten the terms of their existing loan through a program known as the Interest Rate Reduction Finance Loan. The VA does not require a credit check or appraisal for refinances, but some lenders do.
• The VA allows veterans who have equity in their home to get cash back when refinancing. However, some lenders may not allow cash-out refinancing or will allow the homeowner to refinance up to 100 percent of the home’s value to pay off an older mortgage.
• If a service member purchased a home using a conventional loan, he or she is eligible to refinance the mortgage into a VA Home Loan.

If you’re ready to buy a home using a VA Home Loan, be sure to check with your lender on what options are available to you before you go house hunting as this listing is not exhaustive. The VA Home Loan process begins with filling out a Certificate of Eligibility through the VA – get started and learn more here.

 

---

Kristen Baker-Geczy is a communications specialist, active duty military spouse, and former MWR marketing coordinator. She was also deployed to Southwest Asia as an Air Force contractor.

---

Related Articles
VA Home Loan Guide	VA Loan Limits by County
VA Home Loans: How to Get Started	VA Home Loans for First Time Buyers
5 Benefits of a VA Loan	FAQs About VA Home Loans
VA Home Loan Eligibility	VA Home Loan Myths
VA Loan Tips	VA Refinance Loan Options

Removing a borrower from a VA loan isn’t a procedure most think about when applying for a VA mortgage, but it is a contingency some will face for a variety of reasons.

In some cases, multiple borrowers apply for a VA mortgage loan together, but one borrower later decides that arrangement does not work for them any longer. In other cases, divorce or other circumstances may affect the arrangement.

How do VA borrowers get their names taken off a VA mortgage loan? The rules for this can be found in the VA Lender’s Handbook, VA Pamphlet 26-7, and it’s important to point out that in addition to the rules of the VA loan program, state law, lender requirements, and other factors may also apply.

---

Disclaimer

What follows is not legal advice, and should not be taken as such. If you need legal assistance when it comes to removing a borrower from a VA loan or adding/removing someone from the legal deed or title to the property, you should retain experienced legal counsel specializing in real estate or lending law in your state.

---

How To Remove Someone From A VA Home Loan

In general, the way to remove someone from a VA mortgage is to have the loan refinanced into the name of the remaining borrower(s) alone.

The simplest way to achieve this may be to apply for a VA Interest Rate Reduction Refinance Loan (VA IRRRL) which generally must result in some kind of benefit to the borrower in the form of a lower interest rate, lower payments, or the ability to move out of an adjustable rate mortgage into a fixed rate VA loan.

There are restrictions.

VA Interest Rate Reduction Refinance Loans are not open to a non-military spouse, for example, applying alone to get the veteran borrower off of the mortgage. VA loans cannot be issued to non-military borrowers on the original mortgage including the spouse.

Certain exceptions are made for qualifying surviving spouses of service members who have died as a result of military service, but in general, the non-VA loan eligible borrowers cannot apply for VA mortgages including refinance loans.

There may also be restrictions imposed by state law (see below).

---

Other VA Refinancing Loans

In general, for VA refinance loans (cash-out, no cash-out, etc.) the same parties obligated on the original loan must be on the new loan, but you may be able to refinance a VA mortgage in a single veteran borrower’s name only (provided that borrower was named in the original transaction).

In any case, VA refinance loans require occupancy and the new loan will require at least one borrower or her spouse or qualifying dependent children to use the home as the primary residence.

---

VA Loans, Co-Borrowing, And State Law

A legally married couple has VA loan options that a veteran and non-veteran who are not married don’t. A legally married couple can apply for the VA loan together without consideration for the non-military spouse’s status as such.

An unmarried veteran and non-veteran borrower applying together for the VA loan will learn that the VA only guarantees the veteran’s portion of the mortgage.

Why are these issues relevant to adding or removing another borrower from the loan? Because a veteran and spouse will have different considerations in such cases than two veteran borrowers or a veteran and non-veteran borrower, etc.

When a legally married couple applies for the loan, state law may affect the transaction where community property laws exist. Community property laws are state requirements that affect the legal standing of/responsibility for debt between the couple, and how debt obtained in a legal marriage is to be divided should the couple get a divorce.

Community property laws may affect how you can remove a spouse from a VA mortgage depending on the state the home is in; it pays to read up on community property law before moving forward with a procedure to remove a borrower in such circumstances.

VA loan rules do not override state community property law, and the Department of Veterans Affairs does not keep track of such laws or how they may change.

Community property laws generally do not affect transactions between non-married VA co-borrowers, but your experience may vary depending on a variety of factors including whether or not the applicants are considered a “common law” couple (again, depending on the state).

---

Other VA Refinancing Loans

In general, for VA refinance loans (cash-out, no cash-out, etc.) the same parties obligated on the original loan must be on the new loan, but you may be able to refinance a VA mortgage in a single veteran borrower’s name only (provided that borrower was named in the original transaction).

In any case, VA refinance loans require occupancy and the new loan will require at least one borrower or her spouse or qualifying dependent children to use the home as the primary residence.

---

VA Loan Assumptions-An Option To Refinancing

In cases where a veteran wants to get out of a VA mortgage loan but does not have a co-borrower, the VA loan assumption is an alternative.

A VA loan assumption is not the same procedure as a refinance loan, but it does allow a non-military person to assume responsibility for the existing VA mortgage, and release the original borrower from having to make monthly mortgage payments.

The person assuming the loan must financially qualify and agree to relieve the Department of Veterans Affairs from any responsibility for the mortgage.

A loan assumption is not the same as a refinance loan-the assuming borrower takes over the original mortgage. A release of liability issues for the original borrower may depend on a variety of factors so it is crucial to ask the lender about it. Lender standards, state law, and other factors will affect your transaction where applicable.

VA loan assumptions may also be possible when a legally married couple are divorcing and the non-military spouse wants to take over the loan, or when a co-borrower wants to get out of the loan but the other borrower(s) do not.

---

VA Loan Rules Versus State Law For Deeds

All of the information you have read on this page about VA loans, adding or dropping borrowers and refinancing applies strictly to VA loan rules for the loan transaction itself.

If you have questions about deeds, you will need to consult the local authority in your state as VA loan rules do not address deed issues (except where they may directly pertain to VA loan requirements) nor does the Department of Veterans Affairs keep copies of state deed law or related data.

---

VA Loan Rules For Loan Assumptions, Refinance Loans, And Who May Borrow

VA loan rules do not address other regulations, requirements, or ordinances that relate to the real estate transaction, matters of the deed, legal requirements for conveyance, obligation, or ownership of the property as governed by state/federal law.

VA loan rules are limited to instructions to the various parties to the loan for procedural matters and regulations as they pertain to the VA and VA regulations.

Additional lender requirements and other standards may apply.

Related Articles
VA Home Loan Guide	VA Loan Limits by County
VA Home Loans: How to Get Started	VA Home Loans for First Time Buyers
5 Benefits of a VA Loan	FAQs About VA Home Loans
VA Home Loan Eligibility	VA Home Loan Myths
VA Loan Tips	VA Refinance Loan Options