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In general are the VA loans higher than conventional?

My question is if I can afford the down payment of 5%, is it better to get a conventional than a VA ? by seanhenricks864 from Stockton, California. Nov 19th 2014 Reply


Jeff Phillips (JeffPhillips)
#683 ranked lender in California - 32 contributions

Here is what you are going to want to weigh:

VA has no Mortgage Insurance, but does have funding fee most likely 2.15% (financed into loan).

The MI percentage is probably around 1% per year on a conventional loan (5% down), but you might be able to remove the MI in 2 years with good appreciation.

If you have a disability from the VA, I would definitely go VA as there is no Funding Fee and there is no MI. Will state on your certificate of eligibility.

Hope this helps.

Jeff Phillips
jeff@hpifinancial.com
415-867-6488

Nov 19th 2014
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Stephanie Tourtellotte (Stephanie Tourtellotte)
#0 ranked lender in California - 33 contributions

As another option.There are lenders who will "wrap" the MI into the interest rate, in other words your rate could go up by .50 but you may not have to pay MI every month. However, this option is only something to look at if you are not 100% sure of going with your hard earned VA benefit.

Nov 19th 2014
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Bert Carpenter (BertCarpenter)
#38 ranked lender in Arizona - 1,815 contributions

VA loans generally have a lower interest rate than conventional loans, especially if the borrower does not have 20% down or credit scores are lower than 760. It would probably makes more sense to go 100% VA paying the 2.15% funding fee (which can either be paid in cash at closing or financed), or if you wanted you could put down 5% on a VA loan and the funding fee drops to 1.5%. I would be happy to work out some numbers for you so you can see the difference and make an educated decision. Just give me a call. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ Licensed in Arizona (AZLO0911876 / AZBK0902429), Washington (WALO40586 / WACL3087) and California (CADOC40586 / CAFLL6036566). We are licensed by the CA-DBO under the CFLL and CRMLA. Loans made or arranged pursuant to CFLL or CRMLA license. ~ www.LoansA2z.com ~ 888-889-9950

Nov 19th 2014
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,524 contributions

Hands down, no if ands or buts about it. If you plan on putting less than 20% down payment, and you have VA loan benefits - the VA home loan is the best way to go on so many fronts... The physical interest rates are lower, the closing costs are lower, and there is no monthly mortgage insurance. While there is a small up-front funding fee for most people, it shrinks with down payment size, and is completely waived if you have at least a 10% VA disability. We provide VA loans in MN, WI, and SD. www.VA-IRRRL-LOAN-MN.com

Nov 21st 2014
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Timothy Howard (timehoward)
#70 ranked lender in Utah - 150 contributions

5% down payment on a conventional loan will give you Private Mortgage Insurance (PMI). The cost of the PMI is going to depend on your credit score.VA, is straight forward, 100%, Financing fee, but that can be waived if you have 10% or more disability.Also, if you are still active in the military, the funding or financing fee is greatly reduced.Call me at 435.764.8709.or go to my website at WWW.YOURMORTGAGEGUY.USWe can help you and guide you so you can make an informed decision.

Nov 22nd 2014
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