VA Loans Vs. Conventional Loans for Pueblo Veterans
Typically, the two most popular options for veterans looking to buy a home are VA loans and conventional loans. Each option has its own benefits, but the terms are different. Here’s how to decide whether you should opt for a VA loan in Pueblo or a conventional loan.
VA Loans Vs. Conventional Loans
Buying a home is one of life’s most exciting experiences. However, it is also a serious matter since it greatly affects one’s financial situation. That’s why it’s important to choose the right loan. When deciding between a conventional loan or a VA loan, Pueblo veterans should consider the pros and cons of each.
Advantages of VA Loans
One of the biggest benefits of a VA loan is that you have the potential to put zero down. Secondly, you do not have to worry about private mortgage insurance. With a conventional loan, you would continue paying this insurance until your equity went above 22%.
You are probably aware that credit requirements are quite relaxed with VA loans. However, you will have to show that your mortgage would be a modest percentage of your monthly income. VA loans also tend to bring lower interest rates compared to conventional loans. Furthermore, it’s also very easy to refinance. For the streamline option, no new appraisal or cost outlay are needed for closing.
Advantages of Conventional Loans
Did you know veterans loans are saddled with a funding fee that can be anywhere from 1.25% to over 3% of the total value of your loan? This funding fee is often due upfront.
Also, if you can afford the 5-20% down payment, a conventional loan may just be better as you won’t have to pay PMI (private mortgage insurance). You also don’t have to worry about the funding fee. Of course, your interest over the long run will also be lower since you are borrowing less.
Furthermore, there are typically more restrictions involved with VA loans. In some circumstances, VA loans may not be used for refinancing. For example, you may not use it to purchase a second home or an investment property. You may only finance your primary residence as VA loans in Pueblo also come with strict occupancy rules. There are limitations upon the conditions of the property as well, meaning that fixer-upper you have your heart set on may not be eligible.
Get More Information
At Mortgage Solutions Financial, we work with all kinds of mortgages. Our loan officers can give you all the information you need about conventional mortgages and VA loans in Pueblo. Simply give us a call or stop by and talk to a loan officer today.