Veterans have more mortgage programs to choose from than most borrowers, but the right one depends on three things: how much entitlement you have left, whether you owe a funding fee, and what you want the loan to do. Buying a home, lowering a rate, and pulling cash out each point to a different program. Reading a program list top to bottom rarely helps, so this article is organized by goal.
Duane Buziak walks through seven strategies, from the VA purchase loan to soft pull comparison shopping. They apply to veterans buying or refinancing in Virginia, Florida, Tennessee, Georgia, DC, North Carolina, South Carolina, or Maryland. Every payment figure below is an illustration, not a quote, and no rate or approval is guaranteed.
By Duane Buziak, NMLS #1110647
1. VA Purchase Loan With Full Entitlement
Start with the numbers. Suppose you buy a $400,000 home with 0% down. The first-use funding fee of 2.15% (as of 2026) is $8,600, and financing it makes the loan $408,600. Here is what a 30-year fixed loan costs at three illustrative rates:
| Rate | Monthly principal and interest | Total interest over 30 years |
|---|---|---|
| 6.00% | $2,449.76 | $473,314 |
| 6.25% | $2,515.82 | $497,095 |
| 6.50% | $2,582.63 | $521,147 |
A half-point swing moves the payment by about $133 a month and total interest by roughly $48,000. That is why the rate conversation matters even on a program with no down payment. If you want to check these figures yourself, see how to calculate your mortgage payment.
The program works because the VA guarantees part of the loan, which removes the down payment requirement and the monthly mortgage insurance. With full entitlement (the amount of guaranty you can use), VA loan limits do not cap the loan amount. The company funding the loan still underwrites your income, debts, and residual income, the money left each month after major obligations and taxes.
- Request your Certificate of Eligibility (COE) through VA.gov or with help from Duane Buziak.
- Complete a NoTouch Credit Pull pre-qualification, a mortgage pre-approval without hard pull, so you can see your options first.
- Get a VA appraisal on the property you choose.
- Confirm you plan to occupy the home as your primary residence.
The common mistake: believing the VA sets a minimum credit score. It does not. Individual companies set their own overlays, which is one reason quotes differ. The other mistake is budgeting around the purchase price and forgetting that the financed fee raises the balance.
What to measure: cash to close, the full monthly payment including taxes and insurance, and total interest over the years you expect to stay. Ask about no-out-of-pocket closing options if cash to close is your constraint, and review the mortgage closing costs breakdown so no fee surprises you.
2. Confirm Your COE and Funding Fee Exemption
A funding fee paid by someone who was exempt is money lost for no reason. The funding fee is a one-time charge that helps sustain the VA program, and it is not always owed. Veterans receiving service-connected disability compensation are generally exempt, as are Purple Heart recipients and certain surviving spouses, per the VA funding fee page.
On the $400,000 purchase, first-use fee levels as of 2026 look like this:
- 0% down: 2.15% of $400,000 is $8,600.
- 5% down: 1.5% of a $380,000 loan is $5,700.
- 10% down: 1.25% of a $360,000 loan is $4,500.
An exempt veteran pays none of these. Subsequent use at 0% down is higher, 3.3% as of 2026, so confirm current percentages before you budget.
The COE is the document that proves entitlement and shows how much you have used. It often lists exemption status too, but check it rather than assume.
- Pull your COE from the VA COE page or ask Duane Buziak to request it.
- Look for a service-connected disability rating, including one granted recently or one pending.
- Compare fee levels at 0%, 5%, and 10% down against the cash you have available.
- Decide whether to finance the fee or pay it at closing.
The common mistake: financing a fee you are exempt from because the rating was never checked. Do this step before shopping, so every quote is built on the right loan balance.
What to measure: the funding fee in dollars and the resulting loan balance. On this example, the gap between a fee and an exemption is $8,600 of principal, which also carries interest for years. For a deeper look at how VA terms stack up, read about VA loan advantages over conventional mortgages.
3. VA IRRRL Streamline Refinance
The Interest Rate Reduction Refinance Loan (IRRRL) lets you refinance an existing VA loan into a lower rate with a reduced funding fee, 0.5% as of 2026, and limited paperwork. On a $408,600 balance that fee is $2,043.
The VA requires a net tangible benefit, meaning the refinance must measurably help you, such as a lower payment or a move from an adjustable to a fixed rate. For fixed-to-fixed refinances, the rate generally must drop by at least half a point. Check the VA IRRRL page for seasoning and recoupment rules.
Worked breakeven: suppose one discount point ($4,086, or 1% of $408,600) lowers the rate from 6.25% to 6.00%. The payment falls from $2,515.82 to $2,449.76, saving $66.06 a month. Dividing $4,086 by $66.06 gives a breakeven near month 62. That is the math, but a quarter-point drop would not meet the half-point test on a fixed-to-fixed IRRRL. A drop from 6.50% to 6.00% would: it saves $132.87 a month, and the same point breaks even near month 31. For more on this kind of math, see how to lower your mortgage interest rate.
- Confirm the existing loan is VA-backed.
- Verify the net tangible benefit and that the loan has been seasoned long enough.
- Get side-by-side quotes with and without points.
- Check the new term against the years left on your current loan.
The common mistake: chasing a small rate drop without calculating breakeven, or resetting to a 30-year term when 18 years remain. A lower payment can hide higher lifetime interest.
What to measure: monthly savings, the breakeven month, and total interest before versus after. If you may move before the breakeven month, skip the points. Our refinance mortgage Virginia guide walks through the same comparison for other loan types.
4. VA Cash-Out Refinance
A VA cash-out refinance turns home equity into cash, and it can also move a non-VA loan into a VA loan. That second use matters for veterans who bought with a conventional or FHA mortgage and now qualify for VA terms. See the VA cash-out loan page for eligibility details.
Suppose a veteran owes $250,000 on a conventional loan against a $400,000 home and carries $30,000 in credit card debt at 24%. That debt costs about $600 a month in interest alone. A cash-out refinance could pay it off. But spread over 30 years at 6.25%, $30,000 costs about $184.72 a month and roughly $36,500 in interest. The monthly relief is real. So is the long tail, because short-term debt now sits on a secured loan against your home.
- Order an appraisal so the loan amount rests on a real value.
- Define exactly how the cash will be used, with dollar amounts.
- Compare the VA funding fee (2.15% first use, 3.3% subsequent, as of 2026) against conventional cash-out pricing.
- Confirm the maximum loan-to-value for each option. The VA permits up to 100%, but many companies cap lower, often at 90%.
The common mistake: rolling short-term debt into a 30-year loan without weighing total interest. If you take that path, consider making extra principal payments that mimic the original payoff timeline.
What to measure: blended rate, fees paid at closing, and net monthly cash flow once the debts are gone. If the net cash flow gain is small, a smaller cash-out amount may serve you better. If the cash is meant for upgrades, compare it against the best home renovation loan options first.
5. Reuse and Restore Entitlement
A VA loan is not a one-time benefit. Entitlement can be used again, and you do not always have to sell the first home to do it. This is common after a permanent change of station (PCS) move, when you want to keep a home as a rental and buy another.
Consider this illustration. A veteran used $100,000 of entitlement on the first home (25% of a $400,000 loan). Assume the county limit is $832,750, the 2026 baseline conforming limit from FHFA, which you should verify for your county. Maximum guaranty is 25% of that, or $208,187.50, leaving $108,187.50 of remaining entitlement. Multiplied by four, that supports about $432,750 of no-down-payment financing. On a $500,000 second purchase, the portion above that, $67,250, calls for a 25% down payment of $16,812.50.
Alternatively, restoration returns your entitlement after the first loan is paid off and the property sold, or in some cases through a one-time restoration while you still own a home paid off earlier.
- Read the COE for the entitlement already used.
- Ask the VA whether you qualify for one-time restoration.
- Calculate remaining entitlement against your county limit.
- Model the subsequent-use funding fee, 3.3% at 0% down as of 2026, unless you are exempt.
The common mistake: assuming you can use a VA loan only once, or that the first home must be sold first. Both are misconceptions that cost veterans options.
What to measure: remaining entitlement in dollars and the down payment required for the second home. A rental income plan for the first property should be part of your qualifying math, and the rental property mortgage qualification requirements explain how that income is counted.
6. Compare VA Against FHA, Conventional, and USDA
VA often wins, but not always. A veteran with 20% down and strong credit should test it. On a $400,000 home with $80,000 down, the conventional loan is $320,000 with no funding fee and no mortgage insurance at 20% down. The VA loan with 20% down carries a 1.25% fee (as of 2026) of $4,000, making it $324,000. At the same 6.25%, that is about $1,970 a month versus $1,995, a $25 difference before any rate gap. If the VA rate is lower, the answer can flip, which is why you compare full scenarios.
| Program | Down payment | Insurance or fee | Property rules | Fit for a veteran |
|---|---|---|---|---|
| VA | 0% with full entitlement | Funding fee, may be exempt; no monthly mortgage insurance | VA appraisal and minimum property requirements; primary residence | Strong when cash is limited or credit is mixed |
| FHA | 3.5% with a 580+ score (as of 2026) | Upfront and annual mortgage insurance premiums | HUD appraisal standards | Fallback if VA entitlement is unavailable |
| Conventional | As little as 3% to 5% | Private mortgage insurance below 20% down | Standard appraisal | Competitive with large down payments and strong credit |
| USDA | 0% | Upfront and annual guarantee fees | Eligible rural areas; income limits | Option for rural purchases in licensed states |
See HUD’s loan overview for FHA terms and the USDA guaranteed loan page for rural eligibility. If your down payment is the sticking point, this breakdown of the best low down payment mortgage programs shows payments at three different rates.
- Request identical scenarios for each program.
- Build a comparison table of payment, cash to close, fees, and property rules.
- Factor in renovation needs, since a fixer may fit some programs better than others.
The common mistake: defaulting to VA without checking conventional when you have a large down payment.
What to measure: total cost over the years you expect to stay, not only the monthly payment.
7. Shop Through a Soft Pull Mortgage Broker
Comparison only works if it does not cost you. A NoTouch Credit Pull lets Duane Buziak view your profile without a hard inquiry, then compare programs across hundreds of wholesale lenders. The CFPB encourages borrowers to shop and compare multiple offers, and common scoring models often treat mortgage inquiries in a short window as one, though a soft pull mortgage approach avoids the question at the start.
Here is how the two routes differ:
| Factor | Single-company channel (for example Rocket Mortgage, Movement Mortgage, NFM Lending) | Broker with wholesale access |
|---|---|---|
| Price sources | That company’s own rate sheet | Many wholesale lenders, compared side by side |
| Program menu | Programs that company offers | VA, FHA, conventional, USDA, renovation, and commercial through multiple sources |
| Credit pull at the start | Varies by company; ask before applying | NoTouch Credit Pull, no hard inquiry |
| Comparison effort | You repeat applications yourself | One profile, several written estimates |
| Best used when | You already prefer that company’s service | You want to see the spread of options first |
Suppose a veteran gets a no hard inquiry mortgage pre-approval, reviews VA purchase quotes side by side, and only authorizes a hard pull once a specific option is chosen. That is the Dare to Compare approach. For a veteran-specific head-to-head, read Veterans United vs. a local VA broker.
- Complete the soft pull.
- Collect written estimates for each program.
- Compare rate, fees, and cash to close.
- Proceed with the chosen option.
The common mistake: applying with one company by default and never seeing what else exists.
What to measure: the number of options compared, the spread between your highest and lowest total cost, and hard inquiries incurred, ideally one. Learning how to read a mortgage loan estimate disclosure makes those comparisons much easier.
Questions Veterans Ask About Mortgage Programs
Who is eligible for a VA loan?
Eligibility generally depends on service length and discharge status, such as 90 consecutive days of wartime service, 181 days in peacetime, or six years in the National Guard or Reserves, plus certain surviving spouses. The VA confirms it through your COE. See the VA eligibility page.
How do I get my Certificate of Eligibility?
Request it on VA.gov, by mail, or through a broker who can pull it for you. It shows your entitlement and whether you have used any. Request it before shopping so your quotes are accurate.
Do all veterans pay a funding fee?
No. Veterans receiving service-connected disability compensation, Purple Heart recipients, and certain surviving spouses are generally exempt. As of 2026, first use at 0% down is 2.15%, and subsequent use is 3.3%.
What credit score do I need for a VA loan?
The VA sets no minimum credit score. Individual companies set their own overlays, so requirements and pricing vary. Comparing options through a broker shows where your profile fits best.
Is VA or conventional financing cheaper?
It depends on your down payment, credit, and rate. With 20% down and strong credit, conventional can cost less because it has no funding fee and no mortgage insurance. Compare total cost over your expected years in the home.
Can I use my VA loan benefit more than once?
Yes. You can restore entitlement after a sale, or use remaining entitlement while keeping your first home. A subsequent-use funding fee applies unless you are exempt, and a down payment may be needed above the entitlement-based limit.
What is an IRRRL and when does it make sense?
An IRRRL is a VA streamline refinance that lowers the rate on an existing VA loan. It makes sense when the net tangible benefit is clear and the breakeven month arrives before you expect to move.
Does a soft pull affect my credit score?
No. A soft credit pull mortgage review, such as a NoTouch Credit Pull, does not create a hard inquiry and does not lower your score. A hard pull happens only when you authorize a specific loan.
Where to Start: A Priority Order for Veterans in 2026
Confirm your COE and funding fee status first. Everything else, from loan balance to cash to close, depends on it. Run a soft pull comparison second, so you see the spread across programs before any hard inquiry. Then pick the program that matches your goal: a VA purchase loan to buy, an IRRRL to lower a rate on an existing VA loan, or a cash-out refinance when you have a defined use for the equity. If you are keeping a first home and buying another, add the entitlement math from strategy 5.
Ready to secure your dream home with trusted mortgage experts? Get your free NoTouch Credit PreQual today and discover your buying power without impacting your credit score. Then experience why homebuyers choose faster close times and access to hundreds of wholesale lenders working for you through Powerhouse Mortgages by Duane Buziak.
