Applying for VA Loans in Connecticut
Applying for a VA loan is similar to other types of government mortgages. However, the borrower is expected to have a Veteran's Certificate of Eligibility and to schedule a VA-assigned appraisal. Procuring the Certificate of Eligibility first is recommended, and after the property is selected and a purchase agreement signed, the appraisal should be conducted through the VA. The application process, however, takes place through a mortgage broker or lender.
Nevertheless, when it comes to the application, not all lenders are the same. Some are approved for automatic processing. The loan, in this case, can be processed and closed while waiting for the VA to approve the borrower's credit application. The Lender Appraisal Processing Program gives such financial institutions the option to review the VA's appraisal and to then close the loan on the basis of the assessment. This approach closes the loan sooner.
Like other government mortgages, VA loans in Connecticut have less strict guidelines. Applying veterans must have served on active duty, with a discharge other than dishonorable, for a minimum of 90 days in war and 180 continuous days in peacetime. For veterans enlisted after September 7, 1980 and officers after October 16, 1981, there is a two-year service requirement.
National Guards, reservists, and surviving spouses follow different sets of requirements. National Guards and reservists must have served for at least six years.
For purchasing a property, what do VA loans cover? Each guarantees a maximum of 25 percent of a $417,000 loan, or $104,250. Closing costs, while not included in the mortgage total, can be rolled into the purchasing price. The borrower must live in the property purchased.
To qualify, on a financial level, a borrower's debt-to-income ratio cannot go above 41 percent, although some exceptions may apply. Credit history, which the VA instead of the lender examines, must be at least satisfactory. However, those with no or shorter credit history may qualify by proving the ability to make payments on rent, utilities, and telephone bills.
As with other government mortgages, VA loans require borrowers to be a few years out of bankruptcy and foreclosure. Borrowers applying must be two years past filing for chapter 7 or one year from chapter 13, with good credit. Borrowers who filed for foreclosure over the past two years are not eligible.