The VA loan allows veterans 100 per cent financing without private mortgage
insurance or a 20 per cent second mortgage. A VA funding fee of 0 to 3.3%
of the loan amount is paid to the VA; this fee may also be financed. In a
purchase, veterans may borrow up to 100% of the sales price or reasonable value
of the home, whichever is less. Since there is no monthly PMI, more of the mortgage payment
goes directly towards qualifying for the loan amount, allowing for larger loans
with the same payment. In a refinance, veterans may borrow up to 90% of
reasonable value, where allowed by state laws.