VA Loan Pros and Cons

va loan pros and cons

VA Loan Pros and Cons

VA loans are becoming increasingly attractive home financing options for military borrowers faced with tough credit and down payment requirements.  However, it’s important to be familiar with the advantages and disadvantages—The VA loan pros and cons.

VA Loan Pros and Cons

As with most great deals, there’s usually a negative. We will examine both side of the spectrum.

Drawbacks of the VA Loan

VA Funding Fee

All VA loans come with a mandatory VA Funding Fee charged by the VA. It’s a cost you wouldn’t pay for a conventional loan or FHA loan, though you can finance it into the loan.

Strict Home Condition

The VA has strict funding requirements. Especially if looking to purchase a “fixer-upper,” this type of loan might not be the best fit due the approval process’ difficult nature.

Negative to the Sellers

Sellers aren’t always on board or open to receiving offers from VA borrowers. Many sellers do not like the paperwork involved, and sometimes even require substantial deposit if they do accept the offer.

Personal Property

Va Loans are intended for primary residences. Therefore, this isn’t a loan program you can use to purchase a second home or an investment property.

Advantages of VA Loans

No Down Payment

VA loans allow homebuyers to purchase a home with no down payment, a low interest rate and little to no closing costs. With many conventional loans needing a 5 percent minimum downpayment, this is a major plus.

No Insurance Premiums

With a VA loan, there are no monthly mortgage insurance premiums. This means no dealing with mortgage insurance underwriting requirements, and avoiding a major headache.


VA requires no minimum credit score, making underwriting much more flexible than for conventional home loans.

You can also choose between fixed and adjustable rate mortgages.

VA loans also allow you to pay of your mortgage early without worrying about getting knocked with prepayment penalties.

Your VA loan can also be flexible with bankruptcy and foreclosure. The VA loan can label you as eligible in as little as two years after a bankruptcy or foreclosure, while the wait can be much longer with other loans.

Flexibility at its finest!

Final Word

Both VA loan pros and cons are apart of the game. As with any mortgage, it’s important to take a good look at your financial standing, the advantages and disadvantages before making a decision.

If you’re eligible for a VA loan and believe the pros outweigh the cons, then now’s the time to compare rates.

Allow the nation’s top lenders compete for your best rate today!