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Between FHA and VA mortgages, are VA always cheaper?

I'm a veteran of the Air Force and I'm looking at my first home. Valued around 325k, I got a savings of 75k and impeccable credit (835, used three credit cards, one for gas, one for bills, one for food paid them off on time for six years, and a car which my wife and I leased for 4 years) I make around 6-7k a month total from all income sources, mainly job and I've been looking at loan programs. Which one would be the most suggested for my particular situation? by edward_253_294 from Santa Fe, New Mexico. Dec 14th 2011 Reply


Jamie McKeehan (Jamiem)
#34 ranked lender in Kansas - 32 contributions

Va is very favorable but it all depends on what your goals are. Feel free to contact as i have been helping familes achieve their goals for over 14yrs. I work for a Federally Chartered Bank (FDIC) and would be proud to help you out, even if you just have more questions. Call when you have some time 816-309-0054 Jamie McKeehan.

Dec 14th 2011
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Shon Atabaki (ShonAtabaki)
#49 ranked lender in Washington - 95 contributions

I would recommend a VA loan. There is a VA funding fee, based on the downpayment amount, but with a VA loan you can request a Seller Credit of up to 4% of the sales price which should be able to cover all closing costs AND the VA funding fee ...even if you opt for 100% financing! Best of luck!!

Dec 14th 2011
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Brian Allen (ballen)
#43 ranked lender in Maryland - 191 contributions

ED, VA is the least expensive Due to the passing of H.R. 2646, Veteran's Health Facilities Act Capital Improvement Act of 2011, the VA has slashed it's funding fees. VA Funding Fees are points charged by VA and can be financed into the loan. With no money down a funding fee of 1.4% would apply with a 5% down payment that is reduced to .75% and .50% with 10% down there is no monthly MI with VA Loans. Compared to FHA you will finance 1% and pay 1.1% monthly as well as a 3.5% down payment.Contact me and I will numercially compared both provide pre-approval and fund your loan great service great rates providing lending service for 25 years.Contact me at ballen@accessnational.com or phone me at 888-354-3299. Thank you for your service and Happy Holidays.First time Use Active Reserves 100% 1.4 1.65 5% 0.75 1.0 10% . 50 .75

Dec 14th 2011
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Brian Bagon (bbagon)
#3 ranked lender in New Mexico - 4 contributions

I would recomend a VA loan. The benefit is you will not have to pay PMI insurance. VA does have a funding fee, but this is added onto the loan amount, you do not have to come in with this at closing. Rates are some of the best in histor currently. I would also recomend using a local mortgage company to help you with your needs. I am the Regional Manager and I am located in Albuquerque. I understand the Santa Fe Market and would appreciate the opportunity to speak with you further. If you have further questions, please call me at 505-221-6933.

Dec 14th 2011
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Blake Kleckner (BlakeK)
#392 ranked lender in California - 257 contributions

VA loan interest rates and/or loan costs are typically a bit higher than FHA's, but no down payment or mortgage insurance is required. Not paying mortgage insurance with a VA loan will save you about $300/mo. compared to an FHA loan. The VA funding fee was supposed to drop to 1.40% from 2.15% of the loan amount starting 11-18-11, which it did, but on 11-22-11 it was increased back to 2.15%. FHA charges 1% up front to VA's 2.15%, so you will pay 1.15% more for a $325K VA loan, or $4,875 ($6,988 in total), but it will be included in the loan amount. Check out http://www.benefits.va.gov/HOMELOANS/circulars/26_11_19.pdf for clarification on the VA funding fee. Considering you have $75K, you might want to consider putting 5% or 10% down to lower the VA funding fee.

Dec 14th 2011
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Jeff Hutchison (jhutchison)
#14 ranked lender in Iowa - 40 contributions

Hi Edward, my rate on the VA loan would be 3.75% with 0 points, and my rate on the FHA would be 3.75% with 0 points. Both rates come with a lender credit and there will be 0 closing costs. VA will have no pmi, FHA will have a monthly MIP of approx. $264/month depending on your final loan amount. I work at a Federal Credit Union and we have the very best government backed financing terms on the market today. Let me know if I can help. thanks.

Dec 15th 2011
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,875 contributions

If you are a Veteran, hands down, the VA Home Loan is the way to go if you plan on anything less than a 20% down payment. The two primary reasons a VA loan wins is 1) Zero down payment option. 2) No mortgage insurance, which saves a lot of money over other less than 20% down loans. Need a VA loan expert in MN or WI? Visit www.MortgagesUnlimited.biz

Dec 15th 2011
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Bert Carpenter (BertCarpenter)
#38 ranked lender in Arizona - 1,821 contributions

It is almost always more expensive for an individual to use FHA financing vs VA financing. VA allows for as little as $0 down and there is no monthly Mortgage Insurance. FHA requires a minimum down payment of 3.5% of the purchase price, and there is a monthly mortgage insurance premium included in each of your payments. Interest rates are usually very comparable, if not identical for both loan programs. In both cases, Owner Occupancy is required. My advice is to find and use a local Mortgage Banker/Broker rather than using one of the big banks. Mortgage Bankers/Brokers are Trained, Tested and Licensed to insure borrowers are working with competent Loan Originators. Bank employees are not required to undergo such training. Make sure you check out the background of your selected Loan Originator at www.NmlsConsumerAccess.org.

Dec 15th 2011
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,588 contributions

VA is good if you don't want to put money down.. you can finance 100%, however the rate is slightly higher than FHA, but there is no mortgage insurance.. With FHA, you put 3.5% down, pay a lower rate but you do have to pay mortgage insurance. My guess based on past clients in your situation, is that using your VA benefits will get you a lower monthly payment. contact a local mortgage broker, not a bank and apply with them... they can type up both scenarios and show you the differences side by side so you can make an educated decision. WilliamAcres.com

Dec 15th 2011
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James Barath (JamesBarath)
#9 ranked lender in Indiana - 351 contributions

Take advantage of the VA benefits that you've earned as it will result in the lowest total cost mortgage strategy over the life of the loan even with a slightly higher funding fee and marginally higher interest rate. Happy Holidays!

Dec 16th 2011
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