Step by Step Guide
Types of Home Loans
- What is a VA Loan?
- What are the VA Loan Limits?
- VA Loan Eligibility
- VA Funding Fee
- Advantages of VA Loans
- VA Loan vs. Conventional and FHA Mortgages
- What are the VA Residual Income Requirements?
- How to Apply for a VA Loan
- VA Loans for Home Purchase
- Types of Properties Eligible for a VA Home Loan?
- VA Loan Refinancing
- Do I need DD214 to know if I am eligible for a VA Loan?
- What are VA Entitlement Codes
- VA Mortgage Purchase Loan Checklist
- VA Funding Fee
- VA Loans Frequently Asked Questions
VA Loan vs. Conventional and FHA Mortgages
VA Loans are one of the most powerful and unique loan programs that are only available to military homeowners and homebuyers.
When a military homebuyer is looking for a home they can put no down payment (0% down payment) and pay no mortgage insurance.
The VA Loan is a federal program, the government generally does not make direct loans to veterans. Instead, private lenders including Lendia finance the loan while the Department of Veterans Affairs (the VA) offers a guaranty.
The table below illustrates how a VA Loan compares to a Conventional Loan
| VA Loans | Conventional Loans |
| 0% Down (for qualified borrowers) VA Loans are among the last 0% down home loans available on the market today. | Up to 20% Down Conventional loans generally require down payments that can reach up to 20% to secure a home loan, pushing them out of reach for many homebuyers. |
| No PMI VA Loans are guaranteed by the Veteran’s Administration, you are not required to buy Private Mortgage Insurance. | PMI Required Private Mortgage Insurance is a requirement for borrowers who finance more than 80% of their home’s value, tacking on additional monthly expenses. |
| Competitive Interest Rates The VA guaranty gives lenders a greater degree of safety and flexibility, which typically means a more competitive rate than non-VA loans. | Increased Risk for Lenders Without government backing, banks are taking on more risk which, in turn, can result in a less-competitive interest rate on your home loan. |
| Easier to Qualify Because the loan is guaranteed by the VA, banks assume less risk and have less stringent qualification standards for VA Loans, making them easier to obtain. | Standard Qualification Procedures Conventional options hold stricter qualification procedures that can put homeownership out of reach for some homebuyers. |
The table below illustrates how a VA Loan compares to an FHA Loan
| VA Loans | FHA Loans |
| 0% Down (for qualified borrowers) VA Loans are among the last 0% down home loans available on the market today. | Minimum 3.5% Down FHA loans require a minimum down payment of 3.5% |
| No PMI VA Loans are guaranteed by the Veteran’s Administration, you are not required to buy Private Mortgage Insurance. | UFMIP and MMIP Required. FHA loans require a payment of 1.75% upfront mortgage insurance premium in addition to monthly mortgage insurance premiums regardless of the size of the down payment. |
| Competitive Interest Rates The VA guaranty gives lenders a greater degree of safety and flexibility, which typically means a more competitive rate than non-VA loans. | Same Risk for Lenders FHA Loans are insured by the Federal Housing Authority and this makes them less risky for banks as VA Loans are. FHA loans come with as competitive rates as VA Loans but with the added insurance premiums. |
| Easier to Qualify Because the loan is guaranteed by the VA, banks assume less risk and have less stringent qualification standards for VA Loans, making them easier to obtain. | Standard Qualification Procedures FHA loans have less restrictive guidelines than Conventional Loans but in many cases the monthly mortgage insurance is a huge deterrent to many home buyers and a cause for higher debt to income ratios that cause homeowners to be disqualified. |