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Should you make a down payment on a VA loan?

While a down payment is not required, it might save you money

You don't need to make a down payment when you buy a house with a Department of Veterans Affairs (VA) loan. This makes homeownership more affordable for Veterans and active-duty military personnel who qualify. But is buying a house with no money down a good idea when you have a VA loan?

Making a down payment can lower your funding fee

When you use a VA loan to buy a house, you will have to pay a funding fee. This fee is a one-time payment you make at closing or roll into your mortgage. How much you pay depends on the size of your down payment. See this table from

  If your down payment is...  Your VA funding fee will be... 
First use Less than 5% 2.15%
  5% or more 1.5%
  10% or more 1.25%
After first use Less than 5% 3.3%
  5% or more 1.5%
  10% or more 1.25%

The fee is based on the amount of your loan and whether this is the first time you've received a VA loan. If you borrow $250,000 to buy your first house with a down payment of less than 5%, you will pay $5,375. If you make a down payment of 10% or more, you will pay $3,125.

Making a down payment can save money on interest payments

A down payment reduces the amount you need to borrow, which can save you money on interest payments over the life of the loan. It also starts you on a path to building equity in the home.

Look at the big picture of your finances before you make a down payment. You may want to keep cash in reserve to pay for unforeseen expenses or emergency repairs. If you have high-interest debt, it may make more sense to pay down this debt rather than to put cash down on your house.

Freedom Mortgage is a top VA lender in the United States according to Inside Mortgage Finance, 2023.

Freedom Mortgage Corporation is not a financial advisor. The ideas outlined above are for informational purposes only and are not investment or financial advice. Consult a financial advisor before making important personal financial decisions, and consult a tax advisor for information regarding the deductibility of interest and charges.

Last reviewed and updated March 2024 by Freedom Mortgage.

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