And
the Oscar For the Best Loan Goes to the VA Loan
by Bruce Reichstein, President, VALoans.com
Veterans and active duty military Personnel always hear about their VA eligibility for financing a home loan as authorized by Congress, yet do they really know if this is the best type of loan out there? We at VALoans.com decided to put the VA loan program to the test. There are many different loan products available to Veterans, yet we narrowed it down to the most popular three, ranging from $0 down to 3% down. The loan types are as follows:
- 30 Year 97% Loan to Value Conventional Fixed Rate Loan
- 30 Year FHA First Time Homebuyer Fixed Rate Loan
- 30 Year VA Fixed Rate Loan
| CONV. 97% FIXED | FHA FIRST TIME |
VA | |
| Loan Amount after Down Payment | $121,250.00 | $123,068.75 | $125,000.00 |
| Fees: Appraisal Fee | $310.00 | $375.00 | $300.00 |
| Fees: Credit Report | $20.00 | $20.00 | $20.00 |
| Fees: Processing Fee | $425.00 | $0.00 | $0.00 |
| Fees: Underwriting | $485.00 | $0.00 | $0.00 |
| Fees: VA Funding Fee | $0.00 | $0.00 | $2,687.50 |
| Fees: Tax Service Fees | $85.00 | $0.00 | $0.00 |
| Fees: Flood Certificate | $19.50 | $19.50 | $19.50 |
| Fees: Closing Fee | $150.00 | $100.00 | $0.00 |
| Fees: Per Diem Interest | $284.18 | $154.00 | $154.08 |
| Loan: FHA/MIP Premium | $0.00 | $1,818.75 | $0.00 |
| Loan: Hazard Ins. | $1,005.00 | $1,005.00 | $1,005.00 |
| Reserves: Hazard Ins. | $251.25 | $251.25 | $251.25 |
| Reserves: Mortgage Ins. | $188.88 | $101.04 | $0.00 |
| Reserves: All Tax | $1,070.05 | $1,070.05 | $1,070.05 |
| Reserves: Aggregate Amt. | $(529.06) | $(529.06) | $(428.02) |
| Reserves: Tax Pro-Ration | $(584.32) | $(584.32) | $(584.32) |
| Title: Abstract, Title Search | $150.00 | $150.00 | $150.00 |
| Title: Closing or Escrow Fee | $150.00 | $0.00 | $100.00 |
| Title: Title Exam Fee | $200.00 | $200.00 | $200.00 |
| Title: Ins. Binder Fee | $35.00 | $35.00 | $35.00 |
| Title: Buyers Attorney Fee | $250.00 | $250.00 | $250.00 |
| Title: Lenders Title Ins. | $100.00 | $100.00 | $100.00 |
| Title: Title Ins. | $350.00 | $350.00 | $350.00 |
| Gov't Fees: Recording | $50.00 | $50.00 | $50.00 |
| Gov't: City Tax Stamps | $113.25 | $113.25 | $113.25 |
| Gov't: State Tax Stamps | $250.00 | $250.00 | $250.00 |
| Add'l: Survey | $375.00 | $375.00 | $375.00 |
| Add'l: Pest Inspection | $0.00 | $75.00 | $0.00 |
| Total Est. Closing Costs | $5,203.73 | $5,749.46 | $6,493.29 |
| Downpayment | $3,750.00 | $2,812.50 | $0.00 |
| Total Needed at Closing | $8,953.73 | $8,561.96 | $6,493.29 |
| Interest Rate | 5.625% | 5.710% | 5.625% |
| Principal & Interest | $697.98 | $715.07 | $719.57 |
| Mortgage Insurance | $90.94 | $50.52 | $0.00 |
| Real Estate Taxes | $214.01 | $214.01 | $214.01 |
| Hazard Insurance | $83.75 | $83.75 | $83.75 |
| Monthly House Payments | $1,086.68 | $1,063.35 | $1,017.33 |
The results of our analysis clearly show that the VA loan requires
the least amount of downpayment ($0) and has the lowest monthly payment.
Different lenders may have fluctuating closing costs, yet they cannot
change the parameters of the programs examined and their results
will show that the VA loan is the clear winner in this comparison.
The key factor that allowed the VA loan to have the lowest payment
was that both the Conventional Loan and FHA Loan require Monthly
Mortgage Insurance. The VA loan does not. We want Veteran borrowers
to be aware of these facts and to be informed when purchasing a new
home. Each Veteran has different personal situations and they should
compare each program available to them and the costs associated with
each loan type.
Above
Article Copyright © VALoans.com.
Reproduced with Permission
