VA Loans vs. Conventional Loans

If you’re a member of the military or a surviving spouse, you may be eligible for a VA home loan. Here at Patriot Home Mortgage, we specialize in VA loans – it’s one of the reasons why we’re called Patriot! We serve clients across the western United States, from Colorado to California, and our mortgage experts are here to help you find the best loan. 

While it may seem like a VA loan is an easy choice for those who qualify, there are many factors to take into account. In today’s blog post, we’re comparing VA loans to conventional loans, so that you have as much information as possible when choosing your mortgage financing. Continue reading to learn more, and if you’d like to schedule an appointment with a mortgage expert, contact us today!

Property Type

One of the primary factors in deciding between a VA loan and a conventional home loan is the type of property you’re purchasing. A VA loan is only for primary residences, whereas you can use a conventional loan for a second home, vacation home, or rental property.

Down Payment

One of the major benefits of a VA loan is that, often, no down payment is required. If you don’t have a down payment saved, then choosing a VA loan is a good option. If you are able to make a downpayment, though, you can compare rates for your mortgage financing options and choose one that works best for you in the long run.

Fees

Something first time homeowners can forget is the fees associated with purchasing a home. A VA loan requires a funding fee to help defray the cost of loans that end up defaulting. This is a one-time fee that’s dependent on the loan amount, the amount of your down payment, and whether you’ve used a VA loan before. If you can’t pay the fee upfront, it’s often rolled into the loan amount, which adds to the amount you pay in interest.

Credit

VA loans usually have no minimum credit score, since they’re insured by the government. If you have a low credit score, you also have the option of an FHA loan. Meet with an expert from our mortgage company to discuss your finances and options.

Mortgage Rates

One of the benefits of a VA loan is that it will often have a lower interest rate than a conventional loan, which will save you money in the long term. It is also a fixed-rate mortgage, which means you won’t be surprised by larger payments if rates rise. 

Debt-To-Income Ratio

There is often no maximum debt-to-income ratio for a VA loan, which means that, when it comes to debit and credit scores, they’re easier to qualify for. As with all mortgages, there are compensating factors, which include residual income (the amount leftover at the end of the month after mortgage and living expenses are paid). 

Need Personalized Mortgage Help? Contact Patriot Home Mortgage

At the end of the day, the mortgage option you choose is a personal decision! You want to make a smart financial decision, with as much information as possible available to you. Our mortgage company is here to help you decide and to make the mortgage financing process as smooth as possible.

If you have questions about whether or not a VA loan is right for you, we’d be more than happy to talk with you. Contact us in St. George, Utah, Mesquite, Nevada, or our other offices across the western United States today. We provide services for conventional mortgages, VA loans, USDA loans, jumbo loans, reverse mortgages, and more.