What are the cons associated with a VA loan versus a conventional loan?

Answer

If you qualify for and decide to take out a VA loan because of its flexible benefits, you should also be aware of this product’s downsides. You must pay a VA Funding Fee that’s about 2% of the loan amount (unless you’re exempt from a disability you incurred during service), which you don’t pay on a conventional loan. You must also pay closing costs as you would with a conventional loan.

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Must live in the home

You must move into the home within 60 days after closing (unless you qualify for an extension). You must live in the home you buy with a VA loan. You can’t buy a vacation home or rental property with a VA loan. And finally, sellers tend to choose buyers with all cash or with a conventional loan over buyers with a VA loan because most sellers are more familiar with cash or conventional loans than they are with VA loans.

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