Saturday, April 30, 2011

Maine VA Loans

Service members and veterans moving to southern Maine to settle down or relocate have the privilege of financing a home through the VA Home Loan program. VA loans in Maine combine a handful of benefits that make buying a home less financially burdensome for military members. Even active-duty personnel can use a Maine VA loan, especially if they are looking for property near the, soon to close Brunswick Naval Air Station located northeast of Portland.

There is a general consensus among VA loan borrowers about the program's best benefit: the next-to-nothing down payments. Maine VA loans come with zero percent down to qualified borrowers. Almost all service members and veterans who receive a VA loan have the option to pay nothing down, while the rest of the borrowers pay less than 5 percent down.

Despite this one amazing perk, it's easier to qualify for a VA loan than a conventional loan. Of those who qualified for a VA loan, about 80 percent would not qualify for a traditional one. Even after the credit crunch, service members and veterans with imperfect credit can still get a VA loan in Maine. VA-certified lenders, such as VA Mortgage Center, most often lend to borrowers with scores of at least 620. They also accept debt-to-income ratios as high as 41 percent. A former bankruptcy or foreclosure does not mean a borrower will be denied a VA loan.

In addition to the down payment benefit, Maine VA loans come with a bunch more. Two advantages that save money in the long run are the lower interest rates and elimination of private mortgage insurance (PMI). Lower interest rates are the result of the VA's guarantee on up to one-quarter of each loan's amount. Lenders take on less risk and therefore shave off a few points. With lower rates and no PMI, monthly payments on VA loans shrink.

No prepayment penalty enables borrowers to pay at their own rate without fear of being charged for doing so. The program also comes with assistance to borrowers who are on the verge of default. One refinancing option, the VA Streamline, lets borrowers refinance their loan to lower their interest rate.

Not every service member or veteran is eligible for a Maine VA loan, but those who may be eligible include:

  • Military members who served on active duty for 90 days or 181 days during wartime or peacetime, respectively.

  • Reservists or members of the National Guard who served for at least six years.

  • Spouses of service members who died in the line of duty or because of a service-related injury.

The first step in attaining a Maine VA loan is completing a Certificate of Eligibility (COE). Contact a VA-certified lender today to get your COE and more info on VA loans in Maine.

For more mortgage and finance information, visit my website's mortgage center.