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Unformatted text preview: to guidelines furnished by the federal government, and Cal–Vet has no discretion regarding these limitations. Secondary Financing – At the time of purchase, secondary financing is permitted. The combined Cal–Vet loan and secondary financing cannot exceed 98% of the Cal–Vet appraised value. Title to Property – When a property is being financed with a Cal Vet loan, title is first conveyed to the Department of Veterans Affairs of the State of California by the seller. The department then sells the property to the veteran under a land contract of sale. The department continues to hold legal title until the veteran has paid the loan in full, after which the buyer gets a grant deed. The department uses a standard CLTA joint protection policy, rather than a “lender's” ALTA policy. Loan Origination Fee – The application fee is $50, plus an appraisal fee paid by the applicant. Refinancing – No refinancing are available, with a possible exception where a Cal–Vet take–out is arranged prior to obtaining an “outside” construction loan, and prior to transfer of title to property. However, if your old loan is paid off, a new Cal–Vet loan is available. Cal–Vet loans may be paid off without penalty and may be used over and over. Occupancy – The veteran or an immediate member of the family who qualifies as a dependent must occupy the property. Dynasty School (www.dynastySchool.com) 5-47 REAL ESTATE FINANCE
Death – A Cal–Vet must apply to be insured under the State's Home Protection Plan of life Insurance. If approved for life insurance, the basic coverage provides for payment in full of the contract balance as of the date of death of the insured. Disability – Disability insurance is required for those under age 62 whose health condition is acceptable and who are working full time for full pay. The disability insurance terminates at age 62 unless benefits are being paid at that time. Fire and Hazard Insurance – DVA contracts for fire and hazard insurance for most properties. Premium payments for this and other insurance are included as a part of the loan installment. Construction Loan – All other qualifications remain the same. Cal–Vet usually uses a five–...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.
- Spring '10