Connecticut VA Mortgages

VA Connecticut mortgages and loans for real estate purchase, refinancing, debt consolidation, rehabs, construction, real estate investment. VA no down payment and low down payments make it easy to afford a home. Finance 105% of your home purchase and buy with minimal out of pocket expense to you. Graduated payments let you qualify for a bigger mortgage and a bigger home.

• VA Mortgages for Refinancing – Save many, many thousands of dollars on interest payments by refinancing to a lower rate mortgage. Pay off high interest non tax deductible credit card debt. Take cash out for what ever reason.

• VA Mortgages for Buying a Home – 100% mortgage financing. Finance your closing costs. Finance your rehab project. Usually the single best investment that you can make. Get tax advantages, appreciation, one – four units. 

• VA Mortgages for Building a Home – Construction loans with no payments during building phase. Converts to a permanent mortgage.

• VA Fixed Rate Mortgages – 30 and 15 year terms. 105% financing. One – four units.

• VA Adjustable Rate Mortgages - Periodic and life time caps on interest. Can convert to a 30 year fixed. One – four units.  

• VA Graduated Payment Mortgages - Reduce your initial mortgage payments. Qualify for a larger loan and a bigger home. Convert to a fixed rate 30 year term mortgage at any time.  

VA Mortgages and Home Loans Questions Answered

1. Can a veteran get a VA loan to pay off the mortgage or other liens of record on his or her home?

Yes. The following refinancing loans are available under the VA guaranteed home loan program:
 

a. To pay off the mortgage and/or other liens of record on the home. In most cases, the loan may not exceed 90 percent of the reasonable value of the property as determined by an appraisal, plus the funding fee, if required. The loan may include funds for any purpose which is acceptable to the lender, plus closing costs, including a reasonable number of discount points. A veteran must have available home loan entitlement. An existing loan on a manufactured home (except as noted below) may not be refinanced with a VA guaranteed loan.
 

b. To refinance an existing VA loan to obtain a lower interest rate. Use of additional loan entitlement is not required. The loan amount is limited to the balance of the old loan plus the closing costs, discount points, funding fee, and up to $6,000 in energy efficient improvements. An existing VA loan on a manufactured home may be refinanced to obtain a lower interest rate.
 

2. Can a veteran get a VA business loan?

No. but business loans may be obtained through the SBA (Small Business Administration). The SBA gives preference to veterans wishing to obtain small business assistance. For more information on this financing, consult your telephone directory for the SBA office nearest you.
 

3. Can a veteran get a VA farm loan?

No, except for a farm on which there is a farm residence which will be personally occupied by the veteran as a home. The veteran may or may not conduct farming operations. If farming operations are to be the primary source of the borrower's income, then it must be established that the venture has a reasonable likelihood for success. If the borrower plans to use the residence, but has a source of income other than the farm which will be the primary source of income, then the farming operations need not be considered. Other types of farm financing may be obtained through the Farmers Home Administration which gives preference to veteran applicants. Additional information can be obtained by contacting a local office of that agency, the address and telephone number of which can be found in your telephone directory.
 

4. Can a veteran get a VA loan to buy or construct a residential property containing more than one family unit?

Yes, but the total number of separate units cannot be more than four if one veteran is buying. If more than one veteran is buying, then one additional family unit may be added to the basic four for each veteran participating; thus, one veteran could buy four units; two veterans, six units; three veterans, seven units, etc.

In addition, if the veteran must depend on rental income from the property to qualify for the loan, the veteran must (a) show that he or she has the background or qualifications to be successful as a landlord, and (b) have enough cash reserves to make the loan payments for at least 6 months without help from the rental income.
 

5. Can a veteran get a VA loan to purchase a cooperatively owned apartment?

Generally not. Statutory lien requirements, and the fact that all or almost all of the members of the cooperatively owned apartment must be veterans who are using their entitlement, have presented considerable difficulties in obtaining VA financing for these purchases.
 

6. Can a veteran obtain a VA loan for the purchase of property in a foreign country?

No. The property must be located in the United States, its territories, or possessions. The latter consist of Puerto Rico, Guam, Virgin Islands, American Samoa and Northern Mariana Islands.
 

7. Can a veteran obtain a loan from a private lender in one State for the purchase of property in another State?

Yes. However, many lenders limit their lending operations to certain areas.
 

8. May a lender require security from the veteran in addition to the property being purchased?

Yes. This is a matter between the veteran and the lender. While VA does not require that additional security be taken, it does not object if the veteran is willing.
 

Applying for a VA Mortgage Loan

VA-guaranteed loans are obtained by making application to private lending institutions. Lenders may be found by asking in the community in which you live what firms in the area make home loans. Most mortgage lenders will have the forms and other necessary papers to apply for a certificate of eligibility and for the loan and will help you fill them out. Any lender who does not have the forms may obtain them from the nearest VA regional office.
 

If you have a certificate of eligibility, you should present it to your lender when making your loan application, because the lender will want assurance that you are eligible before accepting the application. However, a lender will undoubtedly discuss the possibility of making a VA loan to you without seeing the certificate. In fact, many lenders will assist you in applying for a certificate of eligibility. So, even if you have not obtained a certificate, you should not delay making an application to a lender for a loan just for this reason.
 

To reduce delays in the processing of the loan, you should be prepared to give the lender the complete names and addresses and your employee identification numbers for present and past employers covering a 2 year period. You should also have available the location and account numbers for savings and checking accounts and all open and recently closed debts and obligations.
 

More Questions and Answers

1. If a lender is unwilling to accept a veteran's application for a loan, what should the veteran do?

The veteran should see another lender. The fact that one lender is not interested in making the loan the veteran wants does not mean that other lenders will not make the loan.
 

2. How are VA loans processed?

There are two ways a lender may process VA home loans-on a "priorapproval' or "automatic" basis.

When the loan is processed on a prior approval basis, the lender takes your application, requests VA to appraise the property, and verifies your income and credit record. All this information is put together in a loan package and sent to VA for review. If VA approves the loan, a commitment by VA to guarantee the loan is sent to the lender. The lender then closes the loan and sends a report of the closing to VA. lf the loan complies with VA requirements, VA issues the lender a certificate of guaranty.
 

In automatic processing. the lender still orders an appraisal from VA, but has the authority to make the credit decision on the loan without VA's approval. The biggest difference between prior approval and automatic processing is the time saved by avoiding the need to await VA's approval before loan closing.
 

All lenders do not have the authority to process loans on the automatic basis. Banks, savings and loan associations, and certain other lenders such as mortgage companies which are approved by VA have the privilege of processing VA guaranteed loans using the automatic procedure.
 

Lenders approved to participate in VA's Lender Appraisal Processing Program (LAPP) are generally able to expedite the processing of VA appraisals.
 

3. What should a veteran do while waiting for loan approval?

Sometimes it may take longer than you might expect for the lender or VA to process your loan application. For instance, your current or former employer may be slow in returning an employment verification form, or it may take some time to obtain a credit rating from out of State creditors. Occasionally, the application VA receives from the lender is incomplete in some important aspect and requires that VA ask the lender to furnish additional information before a final decision can be made. Ordinarily, you should plan on an average of 4 to 6 weeks to obtain a decision on your application.
 

In any case, information on the progress of your application should be obtained from the lender, who will be most aware of developments as they occur.
 

It is most important that you not make any commitments based on an expected approval of your loan. You should not, for example, give notice to your landlord until the loan is actually approved by VA (or by your lender if the automatic processing procedure is used). Generally, it is not advisable to move into the home before the loan is approved. If for some reason the loan is not obtained, you could be faced with additional expense and inconvenience.
 

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VA Mortgage Loan Repayment Terms

The maximum VA home loan term is 30 years and 32 days; however, the term may never be for more than the remaining economic life of the property as determined by the appraisal.
 

Questions and Answers

1. May a veteran pay off a VA loan before it becomes due?

Yes. A VA loan may be partially or fully paid at any time without penalty. Partial payments may not be less than I monthly installment or $100, whichever is less. (Consult your lender.)
 

2. May the maturity on a VA loan be extended to reduce the monthly payments?

Yes, provided the veteran and the lender want to extend it and the extension provides for complete repayment of the loan within the maximum period permitted for loans of its type.
 

3. If a veteran dies before the loan is paid off, will the VA guaranty pay off the balance of the loan?

No. The surviving spouse or other coborrower must continue to make the payments. If there is no coborrower, the loan becomes the obligation of the veteran's estate. Protection against this may be obtained through mortgage life insurance, which must be purchased from private insurance sources.
 

4. Will the veteran's payments always be paid to the same company?

No. It is common practice in the mortgage lending industry to sell mortgages, often before the first payment is even due. If your loan is sold, you may find that you sent your first payment to the wrong place and the new holder of your loan may send you an overdue notice. Even though you know you made the payment, and is is up to the two lenders to get it straightened out, do not ignore the notice. (Most lenders will notify the veteran if the loan is sold and help straighten out any problems.)
 

5. Does having a VA loan limit a veteran's right or ability to sell the property?

No. A veteran may sell the property to a veteran or non veteran at any time. However, if the loan was closed after March 1,1988, and it will be assumed, the qualifications of the assumer must be reviewed and approved by the lender or VA.
 

6. When a veteran sells the property to someone who will assume the existing VA loan, is the veteran released automatically from personal liability for repayment of the loan?

No. If the loan was closed after March 1, 1988, the lender or VA must be notified and requested to approve the assumer and grant the veteran release from liability. If the loan was closed prior to March 1, 1988, the loan may be assumed without approval from VA or the lender. However, the veteran is strongly urged to request a release of liability from VA.
 

7. If a loan closed prior to March 1,1988 can be assumed without VA's approvals why should a veteran be concerned about requesting and obtaining a release from personal liability?

If a veteran does not obtain a release of liability, and VA suffers a loss on account of a default by the assumer or some future assumer, a debt may be established against the veteran. Also, strenuous collection efforts will be made against the veteran if a debt is established.
 

8. How may a veteran obtain a release of liability from VA?

By having the buyer assume all of the veteran's liabilities on the VA loan, and by having VA or the loan holder approve the buyer and the assumption agreement. (If the VA loan closed prior to March 1,1988, the application forms for a release of liability must be requested from the VA office that guaranteed the loan. If the VA loan closed on or after March 1,1988, then the application forms must be requested from the lender to whom the payments are made.)

VA Mortgage Repayment Plans

VA will guarantee loans to purchase homes made with the following repayment plans:

• Traditional Fixed Payment Mortgage

This type of mortgage loan calls for equal monthly payments for the life or term of the loan. Each monthly payment reduces a certain portion of the principal owed on the loan and pays interest accrued to date.

• GPM (Graduated Payment Mortgage)

This repayment plan provides for smaller than normal monthly payments for the first few years (usually 5 years), which gradually increase each year, and then level off after the end of the "graduation period" to larger than normal payments for the remaining term of the loan. The reduction in the monthly payment in the early years of the loan is accomplished by delaying a portion of the interest due on the loan each month and by adding that interest to the principal balance.

• Buydowns

The builder of a new home or seller of an existing home may "buy down" the veteran's mortgage payments by making a large lump sum payment up front at closing that will be used to supplement the monthly payments for a certain period, usually 1 to 3 years.

• GEM (Growing Equity Mortgage)

This repayment plan provides for a gradual annual increase in the monthly payments with all of the increase applied to the principal balance. The annual increases in the monthly payment may be fixed (for example, 3 percent per year) or tied to an appropriate index. The increases to the monthly payment result in an early payoff of the loan in about 11 to 16 years for a typical 30 year mortgage

.

VA Mortgage Downpayment Requirements  

• Traditional Fixed Payment Mortgage, Buydown Loans, and Growing Equity Mortgage

VA does not require a down payment if the purchase price or cost is not more than the reasonable value of the property as determined by VA, but the lender may require one. If the purchase price or cost is more than the reasonable value, the difference must be paid in cash from your own resources.

• Graduated Payment Mortgage

The maximum loan amount may not be for more than the reasonable value of the property or the purchase price, whichever is less. Because the loan balance will be increasing during the first years of the loans a down payment is required to keep the loan balance from going over the reasonable value or the purchase price.
 

VA Mortgage Interest Rates

The interest rate on VA loans can be negotiated based on prevailing rates in the mortgage market. Once a loan is made, the interest rate set in the note will stay the same for the life of the loan.
 

However, if interest rates go down, and you still own and occupy (or previously occupied) the property securing a previous VA loan, you may apply for a new VA loan to refinance the previous loan at a lower interest rate without using any additional entitlement.
 

VA Mortgage Closing Costs

The cost of obtaining any mortgage can be quite a lot. VA regulates those closing costs that a veteran may be charged in connection with closing a VA loan. No commission or brokerage fees may be charged to you for obtaining a VA loan. However, you may pay reasonable closing costs to the lender in connection with a VA guaranteed loan.

Although some additional costs are unique to certain localities, the closing costs generally include VA appraisal, credit report, survey, title evidence, recording fees, a 1 percent loan origination fee, and discount points. The closing costs and origination charge may not be included in the loan, except in VA refinancing loans.
 

In addition to negotiating the interest rate with the lender, veterans may negotiate the payment of discount points and other closing costs with the seller. Often, sellers will consider paying some or all of the discount points required by the lender in order to complete the sale. This can have a big impact on the amount of cash you must pay out of pocket in order to complete the purchase. If the seller will not consider paving points, the veteran may be able to negotiate an interest rate with the lender which is sufficient to avoid the need to include any discount points in the transaction.

VA Mortgage Funding Fee

A VA funding fee of 2.00 percent of the loan amount (2.75 percent for reservists) is also payable at the time of loan closing. This fee may be included in the loan and paid from the loan proceeds. The funding fee does not have to be paid by veterans receiving VA compensation for service-connected disabilities, or who but for the receipt of retirement pay would be entitled to receive compensation for service-connected disabilities, or surviving spouses of veterans who died in service or from a service-connected disability. If the veteran makes a downpayment of at least 5 percent, but less than 10 percent of the purchase price of the property, the funding fee is reduced to 1.50 percent of the loan amount (2.25 percent for reservists). If the veteran makes a downpayment of at least 10 percent, the funding fee is reduced to 1.25 percent of the loan amount (2.00 percent for reservists). If a veteran who has previously obtained a VA home loan obtains another loan with less than a 5 percent downpayment, the funding fee is 3.00 percent of the loan amount. With a downpayment of at least 5 percent, the funding fee is reduced to the percentages shown above for downpayments of at least 5 percent, but less than 10 percent, and for down payments of more than 10 percent.
 

VA Equal Housing Opportunity Notice

Discrimination in the sale of housing because of race, color, religion, sex, handicap, familial status or national origin is prohibited by Federal laws. In November 1962, Executive Order 11063 banned discrimination in all federally assisted housing. The "Fair Housing Law," Title VIII of the Civil Rights Act of 1968, followed by amending legislation, required positive action be taken by Federal agencies to prevent discrimination in all housing. Further, title VIII protects you from the following acts when they are based on discrimination on account of race, color, religion, sex, handicap, familial status or national origin:

• Refusal to deal,
• Discrimination in terms of sale,
• Discriminatory advertising,
• False representations that a dwelling is not available,
• Blockbusting,
• Discrimination in financing, and
• Discrimination in real estate services.
   

These laws provide every person an equal opportunity to choose suitable housing.
 

The Department of Veterans Affairs affirmatively administers the VA housing program by assuring that all veterans are given an equal opportunity to buy homes with VA assistance. All VA program participants-builders, brokers and lenders offering housing for sale with VA financing-must comply with Executive Order 11063 and the Civil Rights Act of 1968, as amended.
 

Builders must sell newly constructed homes with VA financing to eligible veterans without regard to the race, color, religion, sex, handicap, familial status or national origin of the veteran.
 

Brokers participating in the VA home loan program must not discriminate against a person on the basis of race, color, religion, sex, handicap, familial status or national origin by refusing to show or sell a property; by discriminating in the terms of the sale; or by representing that property as not available for inspection.
 

Lenders participating in the VA loan program are required by the Civil Rights Act of 1968, as amended, to act on applications for VA home loans without regard to the race, color, religion, sex, handicap, familial status or national origin of the veteran. In addition, the Equal Credit Opportunity Act prohibits a lender from discriminating against an applicant on the basis of the foregoing, or on the basis of age or marital status; because an applicant's income derives from any public assistance program; or because the applicant has exercised any right under the Consumer Credit Protection Act. Lenders are also prohibited from discouraging applications on these grounds. To ensure that each applicant is fully aware of his or her rights under the Equal Credit Opportunity Act, a lender must provide each applicant with the Equal Credit Opportunity Act Notice and a written statement of the reasons when credit is denied.

Therefore, if you are seeking to use your entitlement to buy a home, you may be assured that VA will protect your civil rights and equal housing opportunity.
 

The following actions, when based on discrimination because of race, color, religion, sex, handicap, familial status, or national origin, are recognized violations of the Federal fair housing law:

• Refusal to negotiate to sell property.
• Discrimination in terms or conditions of sale of real property.
• Advertising indicating any racial, religious, ethnic or gender preference.
• False representations that real property is not available for inspection or ale.
• Blockbusting or inducing owners to sell real property by representations regarding entry into the neighborhood of persons of a particular race, color, religion, sex, handicap, familial status or national origin for profit.
• Discrimination in financing, terms or conditions of a loan, or denying a loan.
   

If you experience or suspect discrimination by a builder, broker, or lender, the local VA office will investigate. To start a VA investigation, submit a written complaint directly to the local VA office. Your complaint must describe the discriminatory action, including the date it occurred, names, addresses and telephone numbers of all parties involved in the action, and the address of the property involved. VA has a form for this purpose (VA Form 26-8827, Housing Discrimination Complaint) which you may request from your local VA office.
 

You should note that in many localities fair housing associations have been organized to assist you in locating and purchasing a house of your choosing. There may be such an organization in your area.
 

If you are unable to find new homes available for sale with VA financing in your area or if you are unable to determine whether particular homes being built are available for sale with VA financing, we suggest you contact the local VA regional office. In addition, in many areas VA has repossessed homes which it will sell to qualified buyers. Inquiry as to the availability of any VA repossessed homes for sale in the area in which you are interested may be made by contacting local real estate brokers.
 

Another area to be explored is the existence of State benefits. Many States offer housing programs which are independent from federal programs. The programs and benefits, as well as the qualifying criteria, may differ from one State to the next. Information on State programs may be obtained from State officials or from the local VA regional office.
 

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Information on this site is deemed to be accurate but is not guaranteed. When in doubt, consult your loan officer, tax professional,  attorney, realtor, or other  professional with specific questions or concerns.

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