Advantage to using a VA loan over conventional loan?

lkaustin · Joined: 25 Jul 2008 Posts: 1 1.31 Dollars($)

If we are looking to buy a first home at 125,000, and have a 20,000 down payment, is it still better to use VA loan benefits? I was under the impression that fee limits and no prepay penalties as well as no mortgage insurance were worth using the VA benefit. If we are making a down payment as stated, are we better off looking for a conventional loan? credit rating is good to very good. we live in Louisiana if that is relevant.

ckalvesmaki · Posted: Fri Jul 25, 2008 1:44 pm Post subject:

You don't have the 20% down so you will have a monthly MI payment...but it will be small.....with VA you don't get a monthly MI payment but you do have an upfront VA funding fee.....the rates are about the same.....Having said that....you really just need to compare the costs side by side....and see what the breakeven point is comparing the upfront to the monthly...on the conventional side the lender can include the MI in the rate....

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