VA loan or not?

Question

Should I use my VA loan to purchase a home even though I have enough cash for a sizable down payment?

Answer 1

Absolutely a VA loan is going to get you a lower interest rate. Yes there is a 3.3% funding fee for first time buyers but a VA loan comes with no MI (mortgage insurance) and no prepayment penalty. I would use part of your money available for a down payment and invest the rest. With property values still increasing at about a nationwide rate of about 6% there are better ways to invest your hard earned money. I hope this helps you but email me [e-mail] if you have any further questions.

Answer 2

Okay, first of all, I just need to say something about "BUD's" comment. YOU ARE WRONG! In the 80's first of all, a 14% rate WAS a great rate. This would have been the early 80's when the economy was in horrible shape and bond rates were extremely high because of a undeniably terrible rate of inflation. VA rates now are in the high 6% range to low 7's.

Please, next time you try to answer a question on mortgages, please get some education first. No offense, but you have terribly mislead the person asking this very good question.

Now on to the question at hand....There is nothing wrong with using your VA certificate. There is more paperwork to go through, but if you can keep the money that you currently have in savings, you would be better off doing that. You never know what could come up being a homeowner. Especially a NEW homeowner.

I would go for it and put nothing down. Just remember, there are still credit requirements, so just because you have that certificate, does not "entitle" you to a home. Many ARMY personnel think that, and it is just not the case.

If you would like more information on these and other types of loans, you can feel free to contact me at timothy.kazee@americanhm .com and I would be more than happy to help you out more with this situation.

Good luck, and thank you so much for defending our country. I salute you!!!

Answer 3

If you decided to go conforming, this is the breakdown.

If you have the down payment - and need only a 80 percent loan to value - say the house is 100,000 and you put down 20,000 - leaves you 80,000 you need financed. A 6.5 rate 30 yr your payment will be 505.65. Principle and Interest. A 6 rate 20 year, payment will be 573.14 a 6 rate 15 yr, payment will be 675.09

If you want a 100 percent loan, your rate will be higher - but you can use the money for updated carpet, draperies, etc. Based on a 100 percent loan, your payment would be 673.72 over a 30 yr period. This is a estimate only, based on A= Conforming rate's.

I used to write VA loans, but the paperwork, inspections are numerious, and the rates are just as good, going conforming. What ever you decide, Good Luck.

Answer 4

Hi I just bought my first house six weeks ago, and I went with a VA loan even tho I put 20% down at closing. I would strongly suggest you go with the VA loan. it is more work to get the VA loan, it took me almost 12 weeks to get the loan and finish with the VA inspection of the property before I could get the loan. But and this is a big BUT the VA will almost defiantly make sure that you don't get fu@ked over, with a lemon for a house. the VA which (is not profiting from your loan) has only your best interest in mind, unlike other loan agencies which the bottom line is the dollar. what ever you go with I would strongly suggest that you stay away from anything that is ARM, or the deadly option ARM (adjustable rate mortgage) in other words go only with a thirty ( or 15 year) fixed rate loan, anything else and you will be setting yourself up for failure. remember buying a home is serous thing and you should do it right even if it takes longer or cost a little more in the beginning.

-TY

Answer 5

The VA loan has the benefit of "no money down." However, depending on whether or not this is your first loan or not you will have to pay a VA funding fee.

http://www.homeloans.va.gov/docs/funding_fee_tables.doc

You can lower the fee by putting money down.

It really depends on what you want to do...do you want more money in your pocket or do you want to pay it down on your house.

Answer 6

NO..........DONT DO IT.........ONE OF MY ARMY BUDDIES DID AT 27% INTEREST IN THE 80'S........I THINK IT WAS A 33 YEAR NOTE ON A $44,000.00 SMALL HOUSE.......HE NEVER WOULD OF START PAYING ON IT UNTIL 23 YEARS LATER, THEY WANTED THERE $44 K BACK FIRST, I TOLD HIM, HE ASK TOO...HE GOT SICK AND HAD A HEART ATTACK, BUT NOT FROM ME TELLING HIM...THE ROOF FEAL IN AND LOST EVERYTHING...BACK OFF PLEASE...CHECK WITH THE BANK...BUT HURRY....ITS ABOUT 7.125 NOW..