Local community and real estate information for Cheshire CT by your Cheshire Real Estate Experts, Sally Bowman Real Estate

VA Loans: Benefits to Connecticut Veterans

Monday, April 18, 2011

by Sally Bowman Real Estate

As an expert in the Cheshire real estate market, I strive to provide helpful information to those interested in the area. Whether you're considering relocating to Cheshire or selling your Cheshire home, I hope you find a helpful resource in my blog. This week, I couldn't pass up posting this article written by Matt Polsky with VA Mortgage Center. Many service members do not know the process associated with obtaining a VA Home Loan and the benefits that come along with it.

Whether you’re headed to Connecticut on active duty or moving there after fulfilling your service, there’s an exclusive home financing option. The VA Home Loan program aids service members and veterans in purchasing their home. The abundance of benefits make Connecticut VA loans one of the most borrower-friendly options on the market.

More often than not, service members that apply are eligible. Those who may be eligible include military members who served on active duty during wartime for 90 days or peacetime for 181 days, respectively. Members of the National Guard and Reserves who served at least six years may be eligible. Those who may be eligible must have been discharged honorably or due to a service-related injury. Dishonorably discharged veterans are ineligible. In addition, spouses of those who died in the line of duty or due to a service injury may be eligible as well. If you are unsure if you apply, contact a VA home loan specialist like VA Mortgage Center.com.

Once determined that you fall into any one of these groups, the next step is to complete the Certificate of Eligibility (COE) from the VA website or through a VA-approved lender. COEs confirm your eligibility and get you started on the path to home ownership with a Connecticut VA loan.

VA loans’ popularity stems from the array of financial benefits they offer. Most notably, VA loans seldom come with a down payment. Qualified borrowers can fully finance a home worth up to $417,000 in Cheshire, Connecticut and the rest of New Haven County under the program. Even when VA loan borrowers pay a down payment, it remains below 5 percent.

Unlike conventional mortgages, VA loans come without private mortgage insurance (PMI), which is charged to homeowners each month with conventional mortgages. However, there is a VA funding fee in VA loans, but it is a mere 2.15 percent of the loan value for first-time homebuyers. In addition, interest rates on VA loans in Connecticut are negotiable because the VA backs up to one-quarter of each loan. Consequently, VA-approved borrowers assume less risk and lower interest rates. More benefits come with the loans, such as:
   -Interest rate caps for active-duty homebuyers
   -No prepayment penalty
   -Programs and assistance for borrowers facing default
   -Choices to refinance to lower interest rates

Although it may seem that this bulk of benefits makes it harder to qualify for a VA loan in Connecticut, it’s actually easier. The VA found that about 80 percent of homebuyers who qualified for a VA loan did not qualify for a conventional one. In part, this is due to no credit standard set by the VA, but instead the expectation by VA-approved lenders. Scores of 620 or higher are preferred. Debt-to-income ratios can be as high as 41 percent, and even a foreclosure or bankruptcy may not disqualify you.

If you've determined that you're qualified for a VA Home Loan, get the process started! Once you contact a VA Home Loan Specialist, contact me to get started in your search for a home in Cheshire. Great schools, community events and beautiful homes await you in Cheshire. Please let me know when you'd like to get started!