I'm about to retire with 26 yrs in svc. My husband and I both have Excellent credit scores (800+). We've been pre-approved for a conventional 30 yr fixed loan with Countrywide. My question is two parts, actually. Would a VA loan be the better way to go? We have approx $40K available for a down payment. Is VA better than conventional?

Part II--I'll likely get at least 30% disability, but of course I won't get that word "officially" for another 6-8 months. Should we wait to buy a house so we qualify for other benefits afforded disabled vets? We'd rather get into our final home sooner than later. Any thoughts are appreciated!

If you have the paperwork already stating that you will be receiving VA disability then go ahead and send a copy of it into VA along with a signed VA Form 26-8937. This form and supporting documents can be faxed to your regional VA office. This is the form that waives the VA Funding Fee. If this is signed off on then go VA regardless of downpayment.

If your downpament is more than 20% then it won't make much difference either way.

Paul
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Paul

For the sake of argument, what will she have to do if her disability is denied?

Pay PMI or the VA Funding Fee if the down payment is less than 20%.

Paul
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So...should I apply for a VA loan, or the standard 30 yr fixed offered by Countrywide? Obviously, I haven't bought a home since taking a big loss in the early 80s. The standard loan seems much easier and faster.

What is the purchase price of the home you are buying?

Paul
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Right now, we're looking at a home for $379K in Washington state, outside of Seattle. Countrywide has given us pre-approval for a 30yr fixed rate mortgage for $360K, with our intent of putting approx $40K as a down payment. We estimated a home cost of $400K. They said discount points were .125, and interest was 6.625% It sounds high to me, but I really don't understand all this. Sorry to sounds like such an idiot.

Go with the VA loan. On a loan amount that large it will save you money monthly vs. the PMI on a conventional loan. Also, on bigger loan amounts the interest rate can get better easily due to the increase in yield so you can get a better rate.

Paul
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Thank you so much...your bottom line is what I really needed. You've been a great help!