{"id":329050,"date":"2024-11-11T04:01:33","date_gmt":"2024-11-11T09:01:33","guid":{"rendered":"https:\/\/www.houzeo.com\/blog\/?p=329050"},"modified":"2025-02-11T05:19:53","modified_gmt":"2025-02-11T10:19:53","slug":"va-loan-vs-conventional","status":"publish","type":"post","link":"https:\/\/www.houzeo.com\/blog\/va-loan-vs-conventional\/","title":{"rendered":"VA Loan vs. Conventional Loan: Which One Is Better?"},"content":{"rendered":"\n<p>VA loans are becoming a popular choice among eligible homebuyers due to their lenient requirements and affordability. Additionally, the VA loan approval rate was <a href=\"https:\/\/www.veteransunited.com\/education\/tools\/stats\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">55%<\/a> with an average loan amount of $373,375 in 2023.<\/p>\n\n\n\n<p>On the other hand, conventional loans are a bit less affordable than VA loans. However, with a market share of <a href=\"https:\/\/www.bankrate.com\/mortgages\/mortgage-statistics\/#data\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">53.2%<\/a>, they are the most common type of loan on the market. The government doesn&#8217;t insure conventional loans, and they are only available through private lenders. <\/p>\n\n\n\n<p>Get preapproved for a mortgage in just a few clicks. <strong>Start here!<\/strong><\/p>\n\n\n\n<div class=\"block-takeaways\" style=\"margin-top:20px !important\"><p class=\"topHead\"><\/p><p class=\"headKeytake\"><b> VA loan vs. conventional loan \n<\/b><\/p>\n<ul>\n<li>VA loans are only available for veterans and their family members.\n<\/li>\n<li>VA loans don&#8217;t have a down payment requirement. Whereas, you need to put down at least 3% on a conventional loan.<\/li>\n<li>Unlike a VA loan, a conventional loan allows you to buy multiple properties.\n<\/li><\/ul> \n<\/div>\n\n\n\n<h2 class=\"margin-top-28 wp-block-heading\" id=\"va-home-loan-vs-conventional-loan\"><strong>VA Loan vs. Conventional Loan: The Difference<\/strong><\/h2>\n\n\n\n<p>VA and conventional loans help buyers to purchase a home of their choice. However, the dynamics of both types of mortgages are different.<\/p>\n\n\n\n<h3 class=\"margin-top-15 wp-block-heading\" id=\"what-is-a-va-home-loan\"><strong>What Is a VA Loan?<\/strong><\/h3>\n\n\n\n<p>The Department of Veterans Affairs offers VA loans, which are called <a href=\"https:\/\/www.houzeo.com\/blog\/non-conforming-loan\/\" target=\"_blank\" rel=\"noreferrer noopener\">non-conforming loans<\/a>. Instead of Fannie Mae or Freddie Mac, these loans are sold to Ginnie Mae. <\/p>\n\n\n\n<p>Since VA loans, among FHA loans, USDA loans, and <a href=\"https:\/\/www.houzeo.com\/blog\/jumbo-loan\/\" target=\"_blank\" rel=\"noreferrer noopener\">jumbo loans<\/a>, are non-conforming loans, they have lenient mortgage requirements. <\/p>\n\n\n\n<h3 class=\"margin-top-15 wp-block-heading\"><strong>What Is a Conventional Loan?<\/strong><\/h3>\n\n\n\n<p>The majority of conventional loans are <a href=\"https:\/\/www.houzeo.com\/blog\/conforming-loan\/\" target=\"_blank\" rel=\"noreferrer noopener\">conforming loans<\/a>. It means that they can be sold to Fannie Mae and Freddie Mac. <a href=\"https:\/\/www.houzeo.com\/blog\/conventional-loan\/\" target=\"_blank\" rel=\"noreferrer noopener\">Conventional loans<\/a> are quite common and have a systematic process.<\/p>\n\n\n\n<p>Moreover, they are cheaper than non-conforming loans. This is because lenders have the option to recover their money and reduce the risks by selling the mortgage.<\/p>\n\n\n\n<h2 class=\"margin-top-28 wp-block-heading\" id=\"va-vs-conventional-mortgage\"><strong><strong>VA Loan vs. Conventional Loan<\/strong><\/strong>: <strong>Mortgage Requirements<\/strong><\/h2>\n\n\n\n<p>VA and conventional loans have mortgage requirements based on different parameters.<\/p>\n\n\n\n<h3 class=\"margin-top-15 wp-block-heading\"><strong>Credit Score<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>VA Loans:<\/strong> The VA has set no <a href=\"https:\/\/www.houzeo.com\/blog\/what-is-a-good-credit-score\/\" target=\"_blank\" rel=\"noreferrer noopener\">credit score<\/a> requirements. Nonetheless, the lenders may have them. Typically, the FICO score ranges from 580 to 620.<\/li><li><strong>Conventional Loans:<\/strong> Credit score requirements for conventional loans vary from lender to lender. However, most lenders demand a minimum credit score of 620.<\/li><\/ul>\n\n\n\n<h3 class=\"margin-top-15 wp-block-heading\"><strong>Down Payment<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>VA Loans:<\/strong> There is no minimum <a href=\"https:\/\/www.houzeo.com\/blog\/what-is-a-down-payment\/\" target=\"_blank\" rel=\"noreferrer noopener\">down payment<\/a> requirement for VA loans. Irrespective of that, the lender may ask for it if the price of the property is higher than its market value.<\/li><li><strong>Conventional Loans:<\/strong> These loans do require a down payment. The percentage of the down payment depends on the lender, with a minimum of 3%.<\/li><\/ul>\n\n\n\n<h3 class=\"margin-top-15 wp-block-heading\"><strong>Private Mortgage Insurance<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>VA Loans:<\/strong> There&#8217;s no requirement for private mortgage insurance in the case of VA loans, as they don&#8217;t require a minimum down payment.<\/li><li><strong>Conventional Loans:<\/strong> You need to pay for <a href=\"https:\/\/www.houzeo.com\/blog\/what-is-pmi\/\" target=\"_blank\" rel=\"noreferrer noopener\">private mortgage insurance<\/a> if you put down less than 20% or have a low credit score.<\/li><\/ul>\n\n\n\n<h3 class=\"margin-top-15 wp-block-heading\"><strong>Property Requirements<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>VA Loans:<\/strong> This loan only allows you to purchase a <a href=\"https:\/\/www.houzeo.com\/blog\/primary-residence\/#primary-residence-definition\" target=\"_blank\" rel=\"noreferrer noopener\">primary home<\/a>.<\/li><li><strong>Conventional Loans:<\/strong> Conventional loans are not limited to primary residences. You can use them for buying a second home and <a href=\"https:\/\/www.houzeo.com\/blog\/investment-property\/\" target=\"_blank\" rel=\"noreferrer noopener\">investment properties<\/a> as well.<\/li><\/ul>\n\n\n\n<h3 class=\"margin-top-15 wp-block-heading\"><strong><strong>Debt-To-Income Ratio<\/strong><\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>VA Loans:<\/strong> There are no <a href=\"https:\/\/www.houzeo.com\/blog\/debt-to-income-ratio\/\" target=\"_blank\" rel=\"noreferrer noopener\">debt-to-income<\/a> requirements for VA loans, however, lenders thoroughly examine if your DTI is more than 41%.<\/li><li><strong>Conventional Loans:<\/strong> Lenders accept a DTI of up to 50%. However, they prefer a borrower with a lower DTI.<\/li><\/ul>\n\n\n\n<h2 class=\"margin-top-28 wp-block-heading\" id=\"va-home-loan-mortgage-rates\"><strong>VA Loan vs. Conventional Loan: Mortgage Rates<\/strong><\/h2>\n\n\n\n<p>Several factors influence your mortgage rates, such as your credit score, down payment, loan amount, etc. VA loans generally offer lower interest rates than conventional loans.<\/p>\n\n\n\n<p>Typically, the difference is 0.25%\u20130.42%. As of December 19, 2023, mortgage rates for 30-year fixed loans for VA loans are <a href=\"https:\/\/www.usbank.com\/home-loans\/mortgage\/va-mortgages.html\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">6.125%<\/a>, whereas for conventional loans, it is <a href=\"https:\/\/www.usbank.com\/home-loans\/mortgage\/conventional-fixed-rate-mortgages.html\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">6.375%<\/a>.<\/p>\n\n\n\n<h2 class=\"margin-top-28 wp-block-heading\" id=\"Is-a-VA-Loan-Better-Than-a-Conventional-Loan\"><strong>Is a VA Loan Better Than a Conventional Loan?<\/strong><\/h2>\n\n\n\n<p>Following are the reasons why a VA loan can be a better choice than a conventional loan if you&#8217;re eligible:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>There is no down payment requirement for VA loans, which allows you to buy a home without putting anything down.<\/li><li>Since the VA guarantees VA loans, there&#8217;s no need for private mortgage insurance.<\/li><li>VA loans offer lenient requirements. Even if you have a low credit score and a high DTI, you&#8217;ll be eligible for a VA loan.<\/li><\/ul>\n\n\n\n<h2 class=\"margin-top-28 wp-block-heading\"><strong>Bottom Line<\/strong><\/h2>\n\n\n\n<p>A VA loan can be the way to go if you are eligible. The VA offers loans with no down payment. Moreover, it also allows you to apply for a loan if you have low credit scores or\/and a high DTI.<\/p>\n\n\n\n<p>On the other hand, conventional loans can be a cheaper option if you put down 20%. Moreover, unlike a VA loan, conventional loans allow you to purchase second homes and buy properties as investments.<\/p>\n\n\n\n<p>Nonetheless, it&#8217;s advisable to do thorough market research before moving forward with either of the mortgages.<\/p>\n\n\n\n<h2 class=\"margin-top-28 wp-block-heading\"><strong>Find Your New Home With Houzeo<\/strong><\/h2>\n\n\n\n<p>With thousands of property listings, Houzeo.com is one of the biggest property listing sites in the US. Find condos, townhouses, co-ops, and other types of <a href=\"https:\/\/www.houzeo.com\/homes-for-sale\" target=\"_blank\" rel=\"noreferrer noopener\">homes for sale<\/a> on Houzeo.<\/p>\n\n\n\n<p class=\"margin-top-15\"><strong>\u00bb Need More Clarity?&nbsp;<\/strong>Read these exclusive&nbsp;<a href=\"https:\/\/www.realestatequeen.com\/houzeo-reviews\/\" target=\"_blank\" rel=\"noreferrer noopener\">Houzeo reviews<\/a>&nbsp;and learn why the platform is the best in America\u2019s competitive housing market.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Also Read<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li><strong><a href=\"https:\/\/www.houzeo.com\/blog\/va-loan-for-second-home\/\" target=\"_blank\" rel=\"noreferrer noopener\">VA Loan for Second Home<\/a>:<\/strong> Read to know more.<\/li><li><strong><a href=\"https:\/\/www.houzeo.com\/blog\/va-loan-for-investment-property\/\" target=\"_blank\" rel=\"noreferrer noopener\">VA Loan for Investment Property<\/a>:<\/strong> Read to know more.<\/li><\/ul>\n\n\n\n<h2 class=\"margin-top-28 wp-block-heading\" id=\"faq\"><strong>Frequently Asked Questions<\/strong><\/h2>\n\n\n\t\t<div class=\"wp-faq-schema-wrap wp-faq-schema-accordion\">\n\t\t\t\t\t\t<div class=\"wp-faq-schema-items\">\n\t\t\t\t\t\t\t\t\t<p class=\"ui-accordion-header\">\n\t\t\t\t\t\tCan I convert my VA loan to a conventional loan?\t\t\t\t\t\t<span class=\"ui-accordion-header-icon ui-icon ui-icon-triangle-1-s\"><\/span>\n\t\t\t\t\t<\/p>\n\t\t\t\t\t<div class=\"ui-accordion-content\">\n\t\t\t\t\t\t<p>Yes, if you meet the lending requirements, you can <a href=\"https:\/\/www.houzeo.com\/blog\/how-does-refinancing-work\/\" target=\"_blank\" rel=\"noreferrer noopener\">refinance<\/a> your VA loan into a conventional loan.<\/p>\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t<p class=\"ui-accordion-header\">\n\t\t\t\t\t\tIs a VA loan a conventional loan?\t\t\t\t\t\t<span class=\"ui-accordion-header-icon ui-icon ui-icon-triangle-1-s\"><\/span>\n\t\t\t\t\t<\/p>\n\t\t\t\t\t<div class=\"ui-accordion-content\">\n\t\t\t\t\t\t<p>No, VA loans are not conventional loans. The <a href=\"#va-home-loan-vs-conventional-loan\">difference<\/a> between them is, that VA loans are non-conforming and conventional loans are conforming loans.<\/p>\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t<p class=\"ui-accordion-header\">\n\t\t\t\t\t\tCan a seller refuse to accept a VA loan?\t\t\t\t\t\t<span class=\"ui-accordion-header-icon ui-icon ui-icon-triangle-1-s\"><\/span>\n\t\t\t\t\t<\/p>\n\t\t\t\t\t<div class=\"ui-accordion-content\">\n\t\t\t\t\t\t<p>Yes, sellers can refuse to accept a VA loan. They have the right to choose the <a href=\"https:\/\/www.houzeo.com\/blog\/types-of-home-loans\/\" target=\"_blank\" rel=\"noreferrer noopener\">type of loan<\/a> as long as it's in good faith.<\/p>\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\n","protected":false},"excerpt":{"rendered":"<div class=\"new-excerpt\"><p class=\"small-desc\">VA loans and conventional loans have separate requirements and are available for different types of individuals. Here's what you should...<\/p><\/div><div class=\"reading_date\"><span class=\"readtime\">5 mins read<\/span><span class=\"date\">Nov 11, 2024<\/span><\/div>","protected":false},"author":119,"featured_media":428103,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46225,46241,46295],"tags":[23647,31386,31382,31383,31388],"class_list":["post-329050","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buyer","category-mortgage-types","category-va","tag-benefits-of-va-loan-vs-conventional","tag-conventional-loan-vs-va","tag-how-much-is-a-va-loan","tag-va-loan-definition","tag-va-loan-versus-conventional-loan"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>VA Loan vs. Conventional Loan: Which One Is Better?<\/title>\n<meta name=\"description\" content=\"VA loans and conventional loans have separate requirements and are available for different types of individuals. 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