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I was thinking about using a VA loan(havent read alot of the fine print about it yet), but whould that provide a better APR than going with a mortgage company? I know that I will prolly have a lower downpayment with the VA than with a mortage company, but in the end would I be looking at a better return overall with the VA, or should I wait and try to get my credit score higher and go with a mortagage company instead?

We've had 2 VA loans. The rates are usually a bit higher than conventional - at the same mortgage company - and there is a 1.5% "fee". The pluses are that there is no downpayment required, the extra fees and closing costs can be rolled into the purchase price (higher loan amount), and the seller is required to pay some of the closing costs that normally go to the buyer. (This can cause some sellers to refuse to sell to you.) Most mortgage banks do have the option of paying points to pay down the rate, however, just like a conventional loan.

One of the drawbacks is: once you've used the VA certificate, any refinances or second purchases under it (when you move and want to buy the second house and go VA again) the "fee" rises to 3%. (The assumption is that you'll only use it the first time because the $$ you get from the equity in your first house would be used as downpayment on a conventional in the second. We lost money in the first house, so went with VA again. Luckily, both DH and I are prior military, so we used the other certificate the second time around and got the 1.5% fee opportunity the second time around, as well.) Another obvious drawback is with 100% financing, you start out with zero equity in the house. (No different than a 100% conventional, except there is NO PMI with a VA loan.) If your money can work better for you elsewhere, of course, not necessarily a bad thing.

We're in the process of refinancing to a conventional now to lower the rate, since our home has increased sufficiently in value. The rates are lower than those offered by a VA refinance (for fixed rate) and skip the 3% fee.

just some additional info.

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