Every time I close a VA loan, I think the same thing: most people who qualify for this benefit either don't know they do, or believe something about it that isn't true.
So let's clear it up.
What makes the VA loan so good
- No down payment required for eligible borrowers with full entitlement.
- No monthly mortgage insurance. None. On a $400,000 loan, that alone can save $150 to $300 a month compared with other low-down-payment loans.
- Competitive rates for those who qualify.
- Flexible credit guidelines compared with conventional financing.
- Limits on closing costs the veteran can be charged, and sellers can contribute toward your costs.
Who qualifies
Generally: veterans, active-duty service members, many National Guard and Reserve members, and some surviving spouses. Eligibility depends on your length and type of service.
You prove eligibility with a Certificate of Eligibility (COE). You don't need to get it yourself before calling me. I can usually pull it in minutes.
The funding fee, honestly
VA loans don't have mortgage insurance, but most have a one-time funding fee. It can be paid at closing or rolled into the loan.
VA funding fee · purchase loans
First use, 5% to 9.99% down: 1.50%
First use, 10% or more down: 1.25%
Subsequent use, less than 5% down: 3.30%
Example: $400,000 loan, first use, $0 down
Funding fee = $8,600 (usually financed)
If you receive VA disability compensation, you're usually exempt from the funding fee entirely. Always check this. It's one of the most valuable details in the program.
Five myths that cost veterans money
1. "You can only use it once."
False. Your VA benefit can be reused. In some cases you can even have two VA loans at once, depending on your remaining entitlement.
2. "VA offers lose to other buyers."
This one has a grain of truth from years ago. Today, a well-prepared VA offer with a strong pre-approval competes fine. What matters is how your agent and I present it.
3. "The appraisal will kill the deal."
VA appraisals check that the home is safe and sound. That's a protection, not a trap. If the appraisal comes in low, there's a formal process to request reconsideration, and you can negotiate with the seller.
4. "There's a maximum loan amount."
With full entitlement, there's no VA loan limit. You still have to qualify for the payment, and lenders have their own guidelines, but the VA doesn't cap the loan.
5. "You can't buy a condo with VA."
You can. The condo project needs to be VA-approved. If it isn't, it can sometimes be submitted for approval.
You earned this benefit. My job is to make sure you use all of it, not just the parts everyone already knows about.
Residual income: the rule nobody mentions
VA underwriting looks at something other loans don't: residual income. That's the money left over each month after your mortgage, debts and estimated living costs. The required amount depends on your family size and region.
It's a good rule. It exists to make sure you can actually live comfortably with the payment, not just qualify on paper.
Refinancing a VA loan
- VA IRRRL (streamline): lowers your rate with minimal paperwork. Often no appraisal. It still has to make sense on a break-even basis, and I'll show you that math.
- VA cash-out: lets you tap equity, and can also be used to refinance a non-VA loan into VA.
What to do next
- Have your DD-214 (or statement of service) handy.
- Check whether you receive disability compensation. It likely waives the funding fee.
- Call me for a pre-approval. I'll pull your COE and show you exactly what you qualify for.
Figures in this article are illustrative examples, not rate quotes. Your actual rate, mortgage insurance and costs depend on your credit, down payment, property and loan program. This is not a commitment to lend. All loans subject to credit approval and underwriting guidelines. Rates and terms are subject to change without notice.
Let’s put your benefit to work
I’ll pull your Certificate of Eligibility, check whether your funding fee is waived, and show you your real buying power. 15 minutes, no pressure.