Roadmap to Applying for a VA Loan in Connecticut

There are a number of benefits to applying for a VA loan that make it an appealing option for prospective home buyers:

• VA loans are 100% financed, which means there’s zero down payment unless required by the lender or the purchase price is more than the reasonable value of the property. By comparison, FHA loans require a minimum of 3.5% down and conventional loans require 3% down.
• VA loan recipients aren’t required to pay monthly mortgage insurance premiums or private mortgage insurance.
• VA loans offer low monthly interest rates.
• VA loan recipients only have to pay a one-time funding fee to the VA — however, veterans with a 10 percent or higher disability rating or who currently receive disability payments are eligible for funding fee exemption.
• VA rules limit the amount borrowers can be charged for closing costs; in some instances, a borrower can even ask the seller to pay certain closing costs.
• VA loan recipients are eligible for assistance from the VA if they run into difficulty making payments.
• Lenders can’t charge a penalty fee on a VA loan if the borrower pays the loan off early.
• You don’t have to be a first-time home buyer to qualify for a VA loan and you can reuse the benefit as many times as you’d like.

There are four types of VA loans in CT: purchase loans, refinancing loans, renovation loans and interest rate reduction refinance loans (IRRRL).

Purchase loans are the standard form of VA loan and enable you to buy a home without a down payment. Refinancing loans enable you to access up to 100 percent of your home’s equity and put that money toward things such as college tuition, home renovations, medical bills and so on. Renovation loans enable you to simultaneously purchase and renovate a home with funds guaranteed by the VA. The financing for this type of loan is based on the expected value of the property after improvement. Finally, IRRRLs help borrowers who already have a VA loan improve their interest rates by obtaining a line of credit without a home appraisal or income documentation.

Depending on which type of VA loan you apply for, you can purchase a home or condominium in a VA-approved project, build a home, install energy-related features in or make energy-efficient upgrades to an existing home and more.

Reach out today to apply to your VA loan. Our experienced agents look forward to hearing from you.

In order to qualify for a VA loan in Connecticut, you must verify your eligibility with a Certificate of Eligibility (COE). To receive a COE, you must meet one or more of the following requirements:

• Have served 90 consecutive days of active service during wartime
• Have served 181 days of active service during peacetime
• Have served more than six years in the National Guard or Reserves
• Are the spouse of a service member who has died in the line of duty or as a result of a service-related disability

There are a few other things you should know to make sure you qualify for a VA loan. First, VA loans have no minimum credit score requirement — however, each lender has its own FICO score requirement and each loan profile is subject to extensive lender review. The VA also doesn’t specify a maximum debt-to-income (DTI) ratio, though the average DTI for VA loans is 41 percent or lower.

Since VA loans are government-backed, borrowers benefit from low interest rates. In Connecticut, VA home loan interest rates are based on a number of factors, including the borrower’s debt-to-income ratio, credit score, the duration of the loan and current market conditions, and are determined by the lender.

The current national average interest rate for a 15-year fixed VA loan is 3.875 percent with 4.334 percent APR; the average rate for a 30-year fixed VA loan is 4.125 percent with 4.386 APR.[MC1]

Home prices in Connecticut are higher than the national average, which means the maximum loan amounts on VA mortgage loans in Connecticut are higher than the average, too. To see how maximum loan amounts vary from county to county, refer to the table below.

Not sure whether you’re eligible for a VA loan or require assistance applying for one in the state of Connecticut? Blue Water Mortgage is here to help. As one of the leading mortgage brokerages in New England (and now Florida!), our team of loan officers has extensive experience working in the Connecticut market and helping veterans finance the home of their dreams. Get started on your journey to home ownership by contacting us today.