+1 vote
A new built.. 400k mortgage at 3.75 VA. I can afford to make monthly full Escort payments up to $2,350. But is it wise to put any mony down or should i Not put anything down?
asked Dec 1, 2017 in VA Loans by Donald Thomas

1 Answer

+1 vote
With today's VA home loans, you pay a smaller funding fee if you put at least 5 percent down. Here is the VA's table for regular military:

Down payment    Funding Fee (1st use)    Funding Fee (subsequent use)
None                    2.15 percent                    3.3 percent
5-10 percent           1.5 percent                    1.5 percent
10 percent+            1.25 percent                    1.25 percent

That makes a pretty big difference, especially if this is not your first use.
If you can afford your monthly payment, including escrows (the property taxes and homeowners insurance) with nothing down, 100 percent financing is a valid decision. Especially if you need your savings to pay down higher-interest debt, save for emergency funds, or maximize your retirement contributions. Financial advisors often recommend that you take care of those things first, because mortgage interest is lower than the cost of other types of borrowing.

However, if you can afford a higher down payment, consider it, because it lowers your upfront costs and your mortgage payment too. Thank you for your question.
answered Dec 1, 2017 by GinaPogol (47,650 points)

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