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VA Mortgage Insurance

If you are familiar with VA Loans at all, you probably know that you do not have to make a down payment on the house that you want to buy. What you may not know, is that you also do not have to pay the Private Mortgage Insurance fee. A Private Mortgage Insurance (PMI)is the extra insurance that lenders require buyers to pay when they take out a loan that is usually greater than 80% the cost of their home. In other words, if you can only afford to pay 20% of the cost of your home, lenders make you pay the PMI.

When you obtain a VA Loan, lenders are not allowed to make you pay the PMI. However, if you apply for an FHA Loan or conventional loan, you have to pay the PMI, plus a down payment on the house you want to buy. It is convenient that you use the same forms to apply for a VA home loan as you would to apply for an FHA Loan or a conventional loan, and almost all lenders will handle VA Loans. It is only about 10% of applications that must be sent to the VA in order to be approved there.

Additionally, if you want to sell your home, the new buyer can assume the responsibilities of your loan. However, you cannot use your loan in order to purchase a new house. Once you turn over your loan, you release your connection to it. When you are applying for a loan and getting ready to purchase a house, it is highly recommended that you meet with what is called a pre-purchase counselor. The hope is that after you meet with this person, you will be more informed on the home buying process and that you know whether or not you are making wise financial choices.

Back to the Veterans' Loan Handbook Table of Contents.

VA Loans - Home Loans - VA Refinance - Home Refinance - Loan FAQs
Veteran Loan Center does not maintain relationships with any government agencies. This includes, but is not limited to, the Department of Veteran Affairs. Veteran Loan Center maintains relationships with Veterans Affairs (VA) mortgage specialists, as well as non-VA mortgage specialists. If you inquire about a VA loan, your information may be shared with a VA-approved lender; however, they are not affiliated with any government agencies, either. We reserve the right to share customer information with trusted affiliates to assist you with your loan. For more information, please read our Privacy Policy.

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