VA Mortgage

A mortgage with no down payment requirement, available only to ex-servicemen and
women, on which the lender is insured against loss by the Veterans Administration. Subject to a
proviso, VA loans are advantageous for veterans who need a no-down-payment loan. In most areas, VA
loans can be larger than FHA loans. FHA also requires at least 1% down and the insurance premium is
higher than on VAs. Conventional loans with no down payment carry interest rates .75% higher and up,
depending on the borrower's credit score. The proviso is that VA borrowers may pay a higher price
(rate or points) than is available on either FHAs or conventionals. They shouldn't—in the competitive
wholesale market where lenders quote prices to mortgage brokers, the prices are much the same. But
the retail market is something else. Some loan providers view veterans who need no-down-payment
loans, and who trust the loan provider to give them the market rate, as sheep to be fleeced.

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