VA loans are available to current and former members of the United States Armed Forces. The loans are geared towards ex-military servicemen and women as a means to make their movement back into civilian life easier by providing them with assistance in purchasing their own home.
The VA loan program first came to life in 1944 as the Servicemen’s Readjustment Act. If you’re interested in purchasing real estate in Connecticut through a VA loan, you must first get a Certificate of Eligibility through either the lender or the VA directly. There are specific requirements for the length of time and service and the conditions surrounding discharge. The VA has a comprehensive list of their eligibility rules and conditions that can be viewed at http://www.homeloans.va.gov.
VA loans come with several advantages and several potential disadvantages to borrowers. In most cases, the disadvantages do not outweigh the advantages, but, if you’re hitting the Connecticut real estate listings heavy, trying to find that perfect home to settle in, it’s good to first determine whether or not a VA loan is right for you.
ADVANTAGES
• VA loans are available through many lenders and do not require a down payment. The only exception may be if the purchase price is greater than the value of the property or if your credit history shows delinquencies.
• VA loans give Connecticut real estate buyers the opportunity to purchase a home at a negotiable interest rate.
• Lenders are limited in the amount of origination fees, appraisal fees and closing fees they can charge on a VA loan.
• Veterans can save thousands of dollars over the course of several years since VA loans do not require private mortgage insurance.
• VA loans can be owner occupied single family or multi-family homes and are also available for new construction. VA loans typically cover new construction by a builder’s one year warranty or a one year insured protection plan.
• VA loans can close just as quickly as other loans – generally within thirty days.
• Borrowers with no credit history may still be able to obtain a VA loan.
DISADVANTAGES
• All VA loan borrowers, with the exception of disabled veterans, are required to pay a VA funding fee at closing that can range from .5 to 3.3% of the total loan amount. This fee is generally paid in cash or added into the total loan amount.
• The VA has very strict guidelines that appraisers must follow. Necessary repairs to the property can halt closing all together until they are remedied. Since Connecticut is a strong seller’s market, with an overabundance of competitive buyers, some Connecticut real estate agents might suggest that home buyers avoid VA loans, feeling as if other competing buyers have an edge since typical loans don’t have the rigid appraisal guidelines of VA loans.
VA loans are still a terrific option for any Veteran browsing Connecticut real estate listings for their first home. Just be aware of both the advantages and disadvantages!
John is a contributor to a Connecticut Home Loan, Real Estate Connecticut Website, which has helped hundreds of people gather information about real estate. http://connecticutrealestateadvice.com