Clients have asked why they should choose a VA loan over FHA or Conventional. The answer to that question depends on your unique situation. Generally speaking most Veterans are better off using their VA benefit. We have compiled a list of benefits that can help you with your decision.

  • Interest Rate: VA rates are generally lower than Conventional financing. Due to the rates being lower you will see more payment savings compared to most loan products.
  • No Mortgage Insurance: Most loan programs require 20% down in order to have no mortgage insurance. The VA loan has no mortgage insurance weather you have a large down payment or no down payment.
  • VA Funding Fee: VA charges a funding fee regardless of your down payment, unless you are a disabled Veteran – then it is waived. If a Veteran plans to put down 20% it may make more sense to use the Conventional loan program to avoid paying the funding fee. However, if a Veteran plans to be in their home for 5 or more years because of the lower interest rate it may still make more sense to pay the VA funding fee and do a VA mortgage. This will allow more savings over time.
  • Closing: Lower interest rates and no mortgage insurance is a great benefit for our Veterans.

 

As a veteran, make sure you weigh the above options when deciding which loan is more beneficial. We often come across veterans who have been swayed away from VA either by their realtor or loan officer.  As you are making the decision to buy a home it is critical to choose representatives that understand the VA home loan.