veteran home loans

Can You Save Money on VA Home Loans?

Of all the misconceptions surrounding VA home loans, the idea that they are somehow more expensive than a traditional loan is perhaps one of the most prevalent – and one of the most misleading. Below, you can learn more about the various ways to save money with VA mortgages so that you can get the best value for your dollar. 

The Differences between VA Loans and Conventional Loans

Per the mortgage experts at Nerdwallet, a personal finance company that aims to help its visitors make the best personal financial decisions for their needs, there are a few differences between VA loans and conventional loans that you will need to keep in mind:


  • Property type – With a VA loan, you can only purchase your primary home. Conventional loans allow you to purchase any type of property you wish, including vacation homes, investment properties, and more. 
  • Down payment – With a conventional loan, you must have at least 3% of the loan value as a down payment. With a VA mortgage, there’s no minimum and you could get a loan with no down payment at all. 
  • Costs – Lenders charge a wide variety of fees, including things like origination fees. With a VA loan, you’ll still have these, but you may have other costs to worry about, as well. These include loan funding fees and more. 
  • Insurance – If you have a conventional loan and you pay less than 20% of the loan value down, you will likely need private mortgage insurance, or PMI, to help guarantee your loan. This is not a requirement with VA loans. 
  • Credit – You’ll need at least a 620 FICO score for a conventional mortgage, but with a VA mortgage, this varies by lender. The VA does not set a minimum. 


Ways to Save Money on Your VA Mortgage

In the long run, VA mortgage loans were not designed to save vets money on their mortgage loans. In fact, the costs are strikingly similar. The real benefit is in these loans’ accessibility; it is much, much simpler to be approved for a VA loan than a conventional mortgage, even if your credit is less than perfect. Despite this, there are two main ways in which you can save money when you choose a VA-backed mortgage over a conventional one. 


  • Lower interest. In December 2019, when the average interest rate for a 30-year fixed-rate conventional loan was at 4.04%, the rate for a VA loan with the same terms was 3.67% – and that can make a substantial difference in the amount you will pay over time. 
  • No PMI – Private mortgage insurance can be quite expensive, and because it’s tacked on to your monthly mortgage payment, failing to pay for it could leave you facing foreclosure. Most of the time, PMI will cost anywhere from 0.5% to 1% of the total value of the loan. This means that if you take out a loan for $250,000, you can expect to pay up to $2500 a year just for PMI. Thanks to VA home loans, you can avoid this. 

Though VA home loans were designed to be more accessible than affordable and give veterans the opportunity to purchase homes despite some credit issues and the lack of a large down payment, there are still ways to save. Namely, the lack of PMI and the lower interest rate will help you keep more of your money in your pocket.

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[…] early, so there’s even more incentive to pay more if you can. Second, you’ll be able to save thousands of dollars over the course of your mortgage, and that’s money you can put into your kids’ college funds or […]


[…] VA home loans tend to have lower interest rates than traditional mortgages, which can not only immediately reduce your monthly mortgage payment but can also save you tens of thousands of dollars over the course of your loan. Dropping your interest rate by even one percent makes a significant difference, and many veterans have found financial freedom simply by refinancing into a VA home loan. […]

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