VA Mortgage Advisor Connecticut Loans

VA Mortgage Loan Program – A Valuable Entitlement

The best mortgage loan program in America is the VA’s, thanks to the United States Government’s support. That is why every veteran needs to know how to utilize it.

When purchasing, you do not have to put down any money. That’s right, $0 down payment. You can finance up to 100% of the home’s appraised value, including closing costs and funding fee. The seller can pay up to 4% of your closing costs. This is a great "leg up" for the new home buyer, allowing use of this entitlement to build up equity and, once selling and paying off this mortgage, get another VA at 100% financing for bigger, better or different house. It provides value and ultimately equity with almost no money down except limited closing costs. If you want some help with military relocation, log onto http://www.pcsamerica.net.

When refinancing, you can lower your rate without qualifying regardless of property value, or take cash out, up to 90% of your home’s appraised value including closing costs and funding fee under VA guidelines. Lenders can create more stringent underwriting criteria according to their investor market, which drives programs underwriting criteria. The 100% refinance programs have now evaporated in the wake of the "Great Recession" due to investor appetites. Nonetheless, be advised that whenever you can lower your mortgage interest rate by about 1%, it is probably worthwhile refinancing.

VA Mortgage Loan Benefits:
• VA Assistance if in Default Due To Temporary Difficulty.
• Warranty from Builders if VA Inspects All Construction.
• Loans Up To $417,000 ($558,750 for Fairfield County).
• 15-year, 25-Year or 30-Year Loan Term Programs.
• Finance Up To $6,000 for Energy Improvements.
• No Mortgage Insurance with Monthly Payments.
• Reduced Funding Fee with 5% Down Payment.
• Finance Funding Fee in Loan Amount.
• Disabled Exempt from Funding Fee.
• Specially Adapted Housing.
• No Prepayment Penalties.
• May be Assumable.

You must occupy the home for any VA loan. The only out-of-pocket costs during loan processing and before closing are the appraisal and termite inspection. That is roughly $600 in Connecticut -- a good seller concession to try and get when purchasing.

The Certificate of Eligibility provides your entitlement. For submission of your loan to a lender, we will need your Certificate of Eligibility (Form 26-1880), which can be obtained by logging onto www.vba.va.gov/pubs/forms/vba-26-1880-are.pdf. It usually takes a couple of weeks to arrive in the mail. To complete the Form 26-1880 request, you will need your military records (DD214). If you need to obtain a copy of your separation records, log onto http://www.archives.gov/veterans/military-service-records/get-service-records.html. If you have any problems or need assistance, contact me at gtarone@equityams.com. Be sure not to be fooled into thinking that the $36,000 loan guarantee limit on the Form 26-1880 is a loan amount when it is merely the basic entitlement. The actual entitlement amount is adjusted according to how it has been used already, so the maximum loan limit is actually 25% of the VA approved loan amount for your particular county.

The funding fee is paid by the veteran, but can be financed in the loan. The fee varies depending on the type of property, service (Active Military, National Guard, Reserves) and other factors. Note that an exemption from the fee is granted to: (A) a veteran receiving VA compensation for service-connected disabilities, or (B) a veteran who would be entitled to receive compensation for service-connected disabilities if retirement pay was not paid instead, or (C) a surviving spouse of a veteran who died in service or from service-connected disabilities (whether or not such surviving spouse is a veteran with their own entitlement and whether or not using it for the loan).

VA loan underwriting is more flexible and forgiving. The borrower’s debt-to-income ratio can be higher than for conventional and FHA loans, and the rates tend to be slightly higher to compensate for the risk lenders take despite the VA’s guarantee.

Having the following available when applying can expedite the processing of your loan:
If purchasing, a copy of the signed Purchase and Sale Agreement and deposit check. If refinancing, a copy of the most recent mortgage statement. If self-employed, copies of the last 2 years of federal and state tax returns including schedules. Also, copies of:
• Last 2 years of W-2’s (or 1099’s) and current (within the last 30 days) pay stub.
• Last month’s statement for all bank accounts still open.
• Most recent statement for IRA’s, stocks, bonds, 401(k), investment or retirement plan (quarterly statement OK).
• Last three (3) receipts, stubs or bank statements showing social security or pensions that are directly deposited, or 1099's if you personally deposit them.
• Initial award letter for pensions or social security.
• Homeowner’s insurance declaration page or agent’s contact information.
• VA’s Certificate of Eligibility (Form 26-1880)

For your service to our country, a good lender or loan officer will guide and assist you through each and every step of the process including the closing. To qualify, it may be necessary for a loan officer to work with you over a period of time to deal with credit report errors and score issues, among other underwriting criteria. Patience can pay off.

There is no doubt that one of the most valuable entitlements veterans have is the mortgage loan program, so take full advantage of it in such a favorable low interest rate market. It is another way of America saying, “Thank you for your service!”