Should I put money down on a VA loan?
Sometimes. A down payment of 5% or 10% lowers the VA funding fee tier and reduces the loan amount and payment. But spending reserves to do it can leave you exposed right after a move. For most Utah buyers with limited cash, keeping savings intact matters more than shaving the funding fee. Run both versions of the payment before deciding.
Sometimes. A down payment of 5% or 10% lowers the VA funding fee tier and reduces the loan amount and payment. But spending reserves to do it can leave you exposed right after a move. For most Utah buyers with limited cash, keeping savings intact matters more than shaving the funding fee. Run both versions of the payment before deciding.
Detailed answer
The funding fee is tiered by down payment, so putting 5% or 10% down reduces it measurably, and a smaller loan means a smaller payment and less interest over time. For a veteran with substantial liquid savings beyond an emergency fund, a down payment can be a reasonable use of capital. For most buyers, it is not. Households moving into a new home face immediate costs that never show up on a closing disclosure: appliances, window coverings, yard work, a deposit somewhere, an unexpected repair in month three. A veteran who empties savings to lower a payment by $120 and then finances a water heater at 22% has gone backwards. There is also a middle path worth pricing: no down payment, financing the funding fee, and using seller concessions to cover closing costs, then making extra principal payments once reserves are rebuilt. That reaches a similar balance position without the early-month fragility. Ask for both payment scenarios in writing and compare them against what the savings account looks like on day 31.
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