@Anonymous wrote:My wife and I are looking to buy our first house this fall (September most likely) and since we are both Active Duty Military we are going to use the VA Loan. Since all of our checking and savings accounts are through USAA we are probably going to use them for the VA Loan too unless there are better options. From my understanding each military member is entitled to $400k total and then the interest rate is determined by your credit score. Is this true? The houses we are looking at are in the range of $180k-$220k so the amount is not what I am concerned with, just the interest rate. Also, I think it would make more sense for us to get a 15 yr vs a 30 yr mortgage because out housing allowance ($2100/month combined) would more than cover the 15 yr rate. Thoughts?
Not an expert yet but did spend an hour and a half on the phone with a mortgage specialist from NFCU recently. The $400k isn't correct, the mortgage amount you qualify for is based on your DTI, between our income, our existing debts (mostly student loans) my wife and I were prequalified for $275k which worked out to $1519 a month with mortgage, insurance, and property taxes. Also (and fortunately for my scores) interest ISNT determined by your credit score. I want to say Navy was/is offering 3.625 and with points I think you can get that down to 3.125% (if you purchased 2 points).
Ideally go for a 15 year mortgage, it's going to be more expensive monthly, but you'll save a ton on interest. You'll also be prequalified for a lot less. They base what you're qualified for again on DTI and that determines what your mortgage could be. Our DTI allowed for $1500 or so between the mortgage, property taxes, and insurance. For a 30 yr mortgage that allows us $275k, for a 15 yr mortgage we could only do $185k.
Some people feel the reason the 30 year mortgages exist is to allow people to "purchase more home". However, others argue this is to allow people to "afford a house they really shouldn't be buying". It's all based on perspective. I do know one thing for sure, regardless of if you're doing a 15yr or 30yr mortgage instead of paying your mortgage once a month split it up into two equal payments and you'll shave fours years and save close to $30,000 in interest (30 yr mortgage, $275k). Pretty crazy huh?
Again I'm no expert, but I hope this helps 
Oz