Yeah, I totally get where you’re coming from. When we bought our last place, the funding fee was a bit of a shock after all the “no PMI” hype. It’s easy to overlook until you see the numbers on paper. Just gotta weigh it out for your own plans—sometimes it works out, sometimes not so much.
the funding fee was a bit of a shock after all the “no PMI” hype.
That’s a common surprise, honestly. The VA loan’s “no PMI” benefit gets a lot of attention, but the funding fee can feel like it offsets some of those savings, especially if you’re not exempt. As for rates, they’ve ticked up partly because VA loans are still government-backed, so they follow general market trends. Lenders also factor in risk and secondary market demand. If your credit score’s on the higher end, you might still land a competitive rate—sometimes it pays to shop around or even work on boosting your score a bit before locking anything in.
I get what you’re saying about the funding fee—when I first started looking into VA loans, everyone made it sound like you’d just waltz in, skip PMI, and save a ton. Then you see that funding fee tacked on and it’s like, wait, is this really cheaper? Especially if you’re not exempt, it adds up fast. I did the math and for me, the break-even point compared to a conventional loan wasn’t as clear-cut as all the ads make it seem.
About the rates ticking up, I’ve noticed that too. I keep seeing headlines about mortgage rates in general, but it feels like VA loans used to be a little lower than conventional, and now they’re almost neck and neck—or sometimes even higher. Is that just a temporary thing, or are VA rates always going to be this close to conventional from now on? I’m also wondering if lenders are just padding their margins a bit because they know people see “no PMI” and jump at it.
Has anyone actually tried comparing the total monthly payment (including funding fee rolled in) between VA and conventional lately? I’m trying to figure out if it’s worth sticking with VA or if I should just go conventional and avoid the upfront hit. I’ve got decent credit, so maybe I’d qualify for a solid rate either way, but I’m not sure if I’m missing something on the VA side that would tip the scales.
Curious if anyone’s run those numbers recently or found any tricks to get the funding fee reduced (besides the obvious exemptions). Or is it just one of those “it is what it is” situations?
I went through this exact debate when I refinanced last year. Here’s what I did: I grabbed a VA loan quote and a conventional quote, then plugged both into a spreadsheet with the funding fee rolled into the VA side. For me, the VA monthly payment was actually a bit higher, even with no PMI, because the funding fee got spread out over the life of the loan. The only way it made sense was if I planned to stay in the house for a really long time, but I’m not sure I will.
One thing I noticed—if you put down 5% or more, the VA funding fee drops a bit, but it’s still not nothing. I wish there was some secret hack to get it lower, but unless you’re exempt, it’s just baked in. I do wonder if lenders are padding VA rates lately, too... it didn’t used to be this close.
I’ve noticed the same thing—VA rates used to be a clear win, but lately they’re almost neck and neck with conventional. Is it just lender margins creeping up, or maybe secondary market demand shifting? I’ve also wondered if the funding fee structure is overdue for a rethink. It’s wild how much that fee can add up over time, especially if you’re not planning to stay put for decades. Anyone else seeing lenders tack on extra “VA-specific” charges lately, or is that just my area?