Posted on Aug 3, 2014
CPL(P) Cyber Threat Intelligence Consultant
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Does anyone know a good tool ( or human expert ) to compare the three routes to home loans side by side and create an amortization schedule for varying terms ?
Posted in these groups: Valoancaptain VA LoanD6a55f7 Finance Degree1 Home Loan
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Responses: 4
MSG Wade Huffman
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SPC P K, Your best bet is to discuss your specific situation with whoever you are planning to use for your mortgage (bank, credit union, mortgage company). They really have no vested interest in which program you use and will lay out the pros and cons of each based on your own situation. i used conventional for my loan (through a bank) and for my refinance a couple years ago (through my credit union); that was the most cost effective for me since I was able to provide a down payment; but that is not the case for many. I wouldn't rely heavily on any 'on line' tools or assessments given how quickly things can change, the algorithms these sites use could very well provide you with 'stale' information.
Good luck in purchasing your home!
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SGT Squad Leader
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If you have the option to buy VA, it is typically your best option. I would second MSG Huffman's oppinion and use a loan officer to research with you. If you are unsure of who to use, ask a realtor. When my wife was a real estate agent in NC, she sent her clients to a loan officer that she commonly worked with. The loan officer was an expert on coaching clients into improving credit, setting attainable goals and reasonable deadlines. This allowed her buyers to purchase the homes they desired at an interest rate that didn't hold them back.
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CPL(P) Cyber Threat Intelligence Consultant
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I am trying to run some numbers in California and will post a comparision for all three. Stay tuned.

SGT (Join to see) I am FICO 700 now. Hoping to bump to 725 at least before I can let some lender run the number.
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CPL(P) Cyber Threat Intelligence Consultant
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MSG Wade Huffman
Very curious why you/one would go for conventional when VA loan does not attract mortage insurance and bunch of closing cost and other fees.
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MSG Wade Huffman
MSG Wade Huffman
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CPL(P) (Join to see) , it's very simple. If you have a down payment (I put 20% down) then there is no PMI (the PMI pays to 'insure' the portion normally covered by the down payment, or the VA guarantee). Also, no funding fee on a conventional loan (I don't have a VA rating so would have had to pay that). The remainder of the closing costs are no different regardless. Also, at the time I purchased, the interest rate on a conventional was nearly one full point lower than on VA.
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MAJ Jim Woods
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Edited 8 y ago
SPC PK,

I currently have 2 homes. One on VA and the other on FHA. The VA is about 1.5 percentage points lower. I have had multiple loans with both organizations and I would go with whichever has the lowest monthly payment and if you can afford it, go with a 15 year mortgage. It gets paid off earlier saving about 30% of interest and if you decide to sell even after just a few years your equity is higher.
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CPL(P) Cyber Threat Intelligence Consultant
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Sir
Thanks for the feedback. Would you mind sharing the rate for VA versus FHA ? I understand the times and circumstances would be different for each individual and locale.

Did you make any aggressive attempts to tweak your FICO as the rate from lenders is all centered around the FICO, largely ?
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MAJ Jim Woods
MAJ Jim Woods
8 y
2.5 on the VA and 3.5 on the FHA. No attempt to tweak FICO. We had a bankruptcy about 10 years ago so our credit wasn't as good as it is now. VA doesn't care but it can effect other lenders. Hope this helps.
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CPL(P) Cyber Threat Intelligence Consultant
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MAJ Jim Woods
Very interesting rate. VA 2.5 is less than prime and FHA 3.5 is .25% higher than current prime. 3 questions, if I may (a) Which year did you get these rates (b) Did you have a rating and (c) Did you get these rates after clearing the bankruptcy off your credit report ?
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MAJ Jim Woods
MAJ Jim Woods
8 y
The VA was in 4/2010 and the FHA was in 2/2012. They are not supposed to "punish" you 7 years after the bankruptcy but it stays on the record for 10 years so it was still on the record with the VA loan and still listed as FYI for the FHA. I do know that the bankruptcy is no longer on our records. I believe that at the time of the VA loan the score was around 600 but we had been going cash for everything for a long time and it allowed the score to climb out of the depths.

I went to Iraq as a contractor in 2011 and by the time I got back we didn't owe anybody anything except for the VA home. If you have a bankruptcy within the last 7 years, the VA loan will be easier to get. The FHA loan required a down payment but our score by that time was in the 750+ range.
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SPC Anthony Smith
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Find a Loan Officer, best choice being a VA Lending Specialist, to give you a breakdown of each program. I would not rely on any online tools as they pull data from unreliable sources and also leave out crucial aspects of the loan process. I can tell you that if you qualify for VA and Conventional, those would be the two to compare. Conventional will only beat a VA loan if you have 20% to put down, and even then the VA Loan can still come out on top.
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CPL(P) Cyber Threat Intelligence Consultant
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8 y
Thanks for the note and sharing your expertise in loans.

Would 20 down + VA provide the optimal in terms of lowering the rate ? Is 20 a magic number to not pay mortgage insurance. If one is able to pay 20 down, then how can one leverage VA in that scenario ?

Without a tool, modelling the scenarious is beyond human abilities.
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SPC Anthony Smith
SPC Anthony Smith
8 y
20% down is the magic number to avoid paying mortgage insurance on a conventional loan. The VA loan has no mortgage insurance ever, but has a funding fee all Vets/Military must pay that is financed into the loan (generally 2.15%-3.3% of the base loan amount). Conventional loans do not have this fee but to receive a similar rate as a VA loan, you generally must pay around the same in points as a closing cost. Therefore when you apply for your loan, if you have 20% to put down, ask your loan officer to compare the VA Funding Fee with the Conventional Closing Costs if the interest rates were the same. I know it can be confusing. If you are going through a home buying process soon, I have no problem if you would like to just inbox me as you go through your process and ask questions.
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