Home Buying in Manhattan>Question Details

Earl, Home Buyer in Manhattan, KS

My fiance is wanting to buy a house, we have about 80K in savings. He is in the military and qualifies for a VA Loan. But we are also wanting to

Asked by Earl, Manhattan, KS Sat Jan 22, 2011

put down cash. Can we do this with a VA Loan?

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7
Brandon Funk’s answer
The answer to your question is Yes. You can put money down on a VA loan however, if you are able to put 20% down you will be better off obtaining conventional financing. The main advantage to utilizing a VA loan is the opportunity to finance 100% of the purchase price. There is a funding fee that can be paid at closing or rolled into the loan amount but there is no monthly private mortgage insurance. In addition, the Seller can contribute up to 6% of the loan amount toward the Buyer's closing costs vs. 3% with conventional financing. As far as how to spend your 80k savings, I recommend that you retain 6-12 months of expenses on hand in savings and the remainder can be used toward a down payment or invested in other opportunities. Ultimately, I think your loan choice will depend on the purchase price of the house you want to buy, your income and your debts. Contact a local lender to get pre-qualified. Local lenders will save you money because they don't often charge origination fees and other erroneous junk fees.
1 vote Thank Flag Link Sat Jan 22, 2011
I would check with your mortgage broker, with VA loans you do not have to put that much cash down
0 votes Thank Flag Link Sat Feb 19, 2011
Confer with mortgage broker, YES if your preference reduce the loan balance I don't believe you would have any issues with VA loan

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0 votes Thank Flag Link Sun Jan 23, 2011
I am a Realtor and a Dave Ramsey facilitator. Brandon's advice is the best! You obviously have good spending habits to have $80k in savings. Keep at least 6 months expenses in savings and put the rest toward a house you can easily afford based on your current income and expenses. I would assume you have no other debt. If you do, pay it off and then go from there. Many people are in serious financial trouble because they leveraged too much debt and then something bad happens and they lose it all.

Go with the loan that has the best interest rate and overall terms, including fees.
0 votes Thank Flag Link Sun Jan 23, 2011
Earl,
Putting cash down is the same as earning whatever rate, less the tax deduction, you will pay. By hanging on to the funds, you have options to pursue other investments which may have larger returns.
The main advantage you may have in using some of your cash would be to purchase a more expensive home than you might qualify for with a down payment. If you plan to be in the area medium to long term, this may be a good consideration.
Speak to a full service mortgage broker who can go over your options and discuss the pros and cons of your situation and help you decide.
0 votes Thank Flag Link Sat Jan 22, 2011
Earl,

I am a retired Army officer and have used the VA loan in the past and helped many clients with the use of the loan. It is a great advantage to use the loan now. It is one of a very few programs that allow you to purchase a home with no money down.

On your question as to whether you can put money down the answer is yes. I do not recommend you put money down if you do not have to. Interest ratesd are at historic lows that have nto been seen since the great depression era. I advise my clients to put as little down as they have to.

However; I do not know the circumstances surrounding your home search. If the home you want to purchase is more than the VA will qualify the two of you for then you can put money down to meet the guidleine requirements.

If you are going to put money down then see what percentage you are going to put down. Once you hit the 10% or greater down it may nto be advantageous to do a VA loan. the VA charges a premium that is rolled into the loan amount. (basically it is there insurance premium). On most loans you are required to pay it until your down payment exceeds a certain percentage.

So, if your down payment is goign to be 10% or greater have themortgage professioanl do a comparison for you on the monthly payment and the cost over the time you expect to be lving there.
Web Reference: http://www.davedicecco.com
0 votes Thank Flag Link Sat Jan 22, 2011
The primary advantage to using a VA loan is that you won't have to put down 20% and can go as low as no money down. If you want to use cash to put down, then I would not use the VA loan, save it for a time when you might need it, talk to a loan officer about your options.
0 votes Thank Flag Link Sat Jan 22, 2011
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