Why would a lender want me to use a conventional mortgage to buy a home instead of my VA loan?

Asked by John, Wayne, MI Sun Dec 13, 2009

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Andy Hargrea…, Agent, Plymouth, MI
Sun Dec 13, 2009
Honestly? A VA loan, while it is a good product, is largely viewed as a "Snail" in relative terms. For one, a conventional or FHA approval can easily be done in 30-40 days. There is about 0% chance of that happening with a VA. Two, on the VA appraisal, they place the order with VA, and it's not uncommon for it to be 2-3 weeks before they go to the home and then another 2-3 weeks to turn the appraisal in, as compared to 2-3 days for the other.

Since time is of the essence in many deals, that can be an issue. Also, while a VA is I believe 0% down, there is an up front VA fee you are responsible to contribute to, whereas conventional you are not.

I don't know all of the ins and outs of the deal, but maybe as around to another lender to see why -- or better yet -- have your LO better explain it to you.
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, ,
Mon Dec 14, 2009
Andy makes some good points. The chief benefits of the VA loan are: low down payment, no PMI, and less pricing adjustments for imperfect credit. With that being said, if you are putting down a good size down payment and if you have good credit, then conventional may be better for you.

Have your lender lay out the two programs side by side so you can see the comparison and decide which one you want to do. If your lender cant do this for you then find another lender!
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