Conventional vs VA Loan

See the unique advantages of a VA Loan

Buying or refinancing a home is a very important decision. Almost as important as selecting the right home, is selecting the right loan program. There are distinct differences between VA and Conventional loans as well as significant advantages for buyers who qualify for a VA Loan.

Down Payment - VA Offers $0 Down

Conventional loans require a minimum down payment of 3% but in many cases, particularly in today's market banks are asking for as much as 10-20% down. Down payments help to mitigate the bank's risk should the loan go into default. Because a VA Loan is backed by the federal government, banks do not require a down payment making a VA Loan one of the only loan programs that can still offer 100% financing.

Monthly Payment - Save Big Every Month with VA

Because the loan is backed by the government, banks do not require PMI (private mortgage insurance), an added monthly expense required for conventional loans where the borrower finances more than 80% of the home's value.

Banks will also offer a lower interest rate to a VA borrower (typically 0.5%-1.0% reduction vs conventional). Interest rates are based on the banks capital risk should the loan go into default, but because a VA Loan is backed by the government the bank takes less risk and is able to offer a lower interest rate to you. A lower rate combined with no PMI can substanially lower your monthly payment as seen in the chart below.

VA Loan vs Conventional - Estimated Monthly Payment Savings
Loan Amount	1.0% Rate Reduction	PMI Savings	Est. Monthly Savings*
$150,000	$94	$115	$209
$250,000	$156	$191	$347
$350,000	$220	$268	$488
$450,000	$282	$345	$627

*Estimates based the borrower putting $0 down with a 1.0% interest rate deduction.

Qualification Standards - VA is More Lenient

The qualification standards for each loan type are very different. Once again, because the loan is backed by the government, banks assume less risk and have less stringent qualification standards for VA Loans making them easier to obtain.

It is important to know the differences between the loan types and understand your options. Get connected to a VA Loan expert who can help you see what is best for your situation.

Get Started with your VA Loan Request

What's Next? Are there any obligations?

By simply starting the request, you are not obligated in any way and your credit will not be pulled as a result of filling out the form on our website. You are simply asking for more information. Your contact information will be sent to a VA Specialist who will contact you to go over your options.

At VA Mortgage Center.com, we work exclusively with VA Loans. Over 500,000 military families have come to us for help through the VA Loan process. See how we can help you.