Asked by Lee  |  Submitted October 19, 2016

Is there ever a reason why a veteran would pursue a conventional loan instead of a VA loan?

I have 30 years of service in the military, I'm wondering which option is best for me.

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  Answers  |  1

November 10, 2016

Not if you are exempt from the Funding Fee because of any service related disability. However, for Veterans who are not exempt, the Funding Fee (Mortgage Insurance) is 1.15% to 3.30% added upfront to the loan amount. If you obtained a Conventional loan with 20% down payment, there is no Mortgage Insurance. This is about the only case to consider Conventional. One other consideration is that VA interest rates are about 0.5% to 1.0% higher than other traditional rates so you may still choose VA even if you make a large downpayment.

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