Best Mortgage Financing?!? VA or Traditional loans in today’s market–?

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Which is the better way to finance a home…

Home price… $ 230K
Available liquid savings (not including retirement of course) $ 70K
Excellent Credit: 750 score

Traditional Loan, putting $ 50K down (little over 20%) OR
VA Loan

what say you????
Sophia D.. I checked that website..with a down payment of $ 50K the funding fee would be 1.25%. So does that make it a better deal than conventional???

  1. Reply
    February 6, 2011 at 1:59 am

    Go conventional if you can. You wont have mortgage insurance. Government loans have a cheaper rate, but not enough to make up your mortgage insurance. You wont have mortgage insurance with 20% down on conventional. I wouldnt even consider a VA under what you have said. Go fannie mae or freddie mac. Here is the VA funding fee chart. If you are exempt from the funding fee it might be another issue. But from what you said go conventional.

  2. Reply
    Sophia D
    February 6, 2011 at 2:25 am

    I would say a VA because you can do 100% finanacing or if you want to you can buy points to lower your interest rate even lower. (Most likely lower than a conventional loan) Just remember unless you have a disability from the armed forces of 30% or more you still have to pay the VA financing fee at closing which I think is around one percent. But there is not MI to pay if you go the VA way even if you don’t put any money down. Navy Federal Credit Union has a loan program where they basically give you a VA loan without having to use your actual VA eligibility. I think the percentage rate is slightly higher but you can still get all the benefits of the VA loan without having to use your entitlement. If all else fails you can always talk to the bank and have them evaluate which is a better option for you. I’m sure they will be more than willing. Good luck!

  3. Reply
    Catar F
    February 6, 2011 at 2:40 am

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