What are the benefits of a VA loan vs. a conventional loan?

You can get 100% financing with no mortgage insurance. This alone can save hundreds of dollars a month. You can get approved with flawed credit a lot of times. If rates improve after you close on your VA loan, you are always eligible for a streamline refinance.  There is no similar option with a conventional loan.
 
Is the VA loan the best way for 100% financing?

It's fast becoming the only way for 100% financing as conventional loans have backed off considerably with high financing levels! The next best is the FHA loan program.

Are conventional mortgage rates better than VA rates?

Which rates are lower on any given day will vary. VA rates are comparable to conventional rates where the borrower has great credit and plenty of cash for a down payment. The VA loan is the only way to get 100% financing these days.

If I have my certificate of eligibility, am I guaranteed to get a VA loan?

You are guaranteed for a VA mortgage once qualification is complete. The lender has to make sure you are able to support the mortgage payment for the home. The borrower must still qualify based on their income, assets, and their credit history.

What is the maximum VA loan amount?

The current maximum VA loan amount is $417,000. Even if you are eligible for a VA loan, you still have to qualify for the requested loan amount. This means that you may not be approved for the entire maximum loan amount even if you are VA eligible. If you want to purchase a home that is more than $417,000, then you would need to bring in additional money in the form of a down payment.


Do I need a down payment?

One of the great benefits of using a VA loan is that you can do the loan with no money down. If the loan and sales contract are set up correctly with the seller covering the closing costs, then you can basically get a home loan for 100% of the sales price.

I've had a past bankruptcy; can I still get a VA Loan?

If you've had a Chapter 7 bankruptcy, you need to wait two years after it has been discharged to be able to qualify for the VA loan.
If you've filed a Chapter 13 bankruptcy, you must wait one year after it has been discharged. Also, just like the Ch. 7, Each applicant's financial situation is unique and must be comprehensively evaluated on its own merits. These are general guideline characterizations and do not constitute underwriting guidelines or a commitment to lend.

What is the VA funding fee?

The VA funding fee is what the VA charges to guarantee the loan. It is not a fee that has to be paid at closing out of pocket. This fee can be simply added to your base loan amount and is paid over the life of the loan. This fee basically takes the place of the mortgage insurance that you would normally find on a conventional loan.

I have a service related disability.  Am I exempt from the VA funding fee?

Yes. As long as you are receiving disability income from the VA you should be exempt from any of VA's funding fees. Be sure to tell your lender this, as it can save you thousands of dollars. 
Visit the VA site for more information on disability funding.

I was turned down for a conventional loan. Can I possibly qualify for a VA loan?

Yes, it is still possible to qualify for a VA loan. The VA is less sensitive to credit issues than conventional lenders. The primary thing the VA wants to see is a clean credit record for the past 12 months, as well as documentation that proves you can make a house payment based on your income in relation to the loan amount you are requesting.

Will I have mortgage insurance?

One of the great benefits of the VA loan is that it enables you to borrower up to 100% of the home's appraised value (up to $417,000) without having to pay mortgage insurance. The VA charges a funding fee that is much less expensive than mortgage insurance and isn't part of your monthly mortgage payment.

Example:
If a buyer's home appraises for $100,000 and is purchased for $90,000, the borrower can borrow as much as $90,000. But if the home is purchased for $100,000 and only appraises for $90,000 the borrower can only borrow $90,000.