Has anyone used a VA loan?

[Clocker]

Anyone used a VA loan before. Is there any advantages to this?

Thanks

 

[Preyhunter]

The biggest advantage is that VA Home Loans (assuming this is what you're talking about) does not require the borrower to pay PMI when putting less than 20% down. That's the biggest advantage as far as I can tell, anyway.

 

[broon]

Yes, avoiding PMI is the big thing. You can get a loan without having any money down and not pay the extra monthly insurance fee. It may come with a slightly higher interest rate but not by much.

I've had two VA loans.

 

[TreyRandom]

Yep, Preyhunter's right. In addition, the VA only allows lenders to tack on certain fees (which keeps them from tacking on whatever fees they want). Tends to keep closing costs reasonable.

I got lucky two of the three times I did a VA loan... the rates were lower than conventional mortgage rates. From what I understand, this is not always the case - VA loans often have a slightly higher rate than conventional ones.

EDIT: You can also move in for no money down using a VA loan. However, be advised that you must pay a higher VA funding fee. The funding fee goes down with a larger down payment. I'd recommend putting down as much as possible to get the funding fee down as much as possible.

 

[Clocker]

well i can afford to be 20 percent down so is it better for me to go conventional. also i was wondering if the funding fee is negotiable?

 

[d3n]

Also, be aware that once you get into a VA loan you need to pay it down before you can take out another one. This can be problematic when going from one house to another.

 

[TreyRandom]

Originally posted by: d3n
Also, be aware that once you get into a VA loan you need to pay it down before you can take out another one. This can be problematic when going from one house to another.

Yes, but only if there's overlap where you would own two houses at once. I've gone from one house to another with 3 different VA loans... selling one then buying another.

 

[TreyRandom]

Originally posted by: Clocker
well i can afford to be 20 percent down so is it better for me to go conventional. also i was wondering if the funding fee is negotiable?

The funding fee is not negotiable - it's a rate established by the VA and goes to the VA in exchange for them guaranteeing your loan.

If you can afford 20% down, it depends on whether VA rates or conventional rates are lower, and what the closing costs for each are. I would guess that conventional would be cheaper due to the lack of a VA funding fee, but do your research to find out what your closing costs are in each scenario.

 

[timur]

Originally posted by: Preyhunter
The biggest advantage is that VA Home Loans (assuming this is what you're talking about) does not require the borrower to pay PMI when putting less than 20% down. That's the biggest advantage as far as I can tell, anyway.

Yup, that's pretty much it.

Also, there are a lot of closing costs that you as a buyer can't pay, as restricted by the VA...not that it matters if the seller knows this