If you're a veteran in Utah with a VA loan entitlement, you're sitting on one of the best mortgage benefits in the country. But the question we hear constantly is: "Should I use my VA loan or get a conventional mortgage instead?" The honest answer is — VA loans almost always win on total cost, but there are specific scenarios where conventional makes sense. Let's break down the real numbers.
*Varies by lender. **First-time use: 2.3%. Subsequent use: 3.6%. Prior service exempted: $0.
The VA loan benefit was designed to help veterans buy homes without down payments — and it delivers that promise. But the real advantage goes deeper. Here's what most borrowers don't realize:
This is the sticking point. VA loans charge a "funding fee" to the VA, not to you directly — but it's rolled into your loan balance. Here's what you need to know:
Funding Fee Rates (2026): First-time VA buyer = 2.3% of loan amount. Subsequent use = 3.6%. If you're disabled (VA-rated), it's waived entirely. Example: $400,000 VA loan = $9,200 in funding fee added to balance. Over 30 years, with interest, that's roughly $18,400 total cost.
Here's the key: that $18,400 is still cheaper than conventional PMI over the same period. Here's why:
VA Loan:
Conventional (3% down):
Winner: VA by ~$12,000 over 30 years. Plus you had no down payment.
There are three specific situations where a veteran should consider going conventional instead:
Example: $1.2M home in Park City, Utah
VA loans have no maximum, but conventional has a $806,500 limit in the Salt Lake metro. If you're shopping for a high-end property, VA is your only choice — not an advantage, just a reality.
VA wins by default.
Example: $500K home, you have $100K to put down
VA path: Put $0 down, carry funding fee of $11,500, rate 6.35%, payment $3,200.
Conventional path: Put $100K down, 20% equity immediately, no PMI, rate 6.65%, payment $2,640.
In this case, conventional can win monthly payment-wise. But you give up the VA benefit you earned. Most veterans I work with say: "I didn't earn this benefit to not use it." That's a fair call.
Conventional wins on payment, VA wins on principle.
Example: Military transfer, likely to move again in 3 years
VA funding fee only hits on first use. If you know you'll sell in a few years, the conventional PMI over a short hold can be competitive. But even then, VA's portability (use multiple times) often wins because you can reinstate your entitlement.
Either works; VA is still slightly better long-term.
Here's something nobody talks about: some sellers will only accept conventional offers, or they price VA offers lower because they think VA appraisals are "too strict." This is partially true — VA appraisers protect veteran buyers from bad deals. But in Utah's competitive market, it shouldn't deter you.
What we tell our veteran clients: "Use your VA loan, offer a 10-day appraisal contingency removal, and you'll win in 9 of 10 bidding wars against conventional. The financing advantage is real, and sellers know it."
Many lenders will approve VA loans for borrowers with 580–620 credit when conventional requires 620+. And VA allows DTI up to 60% with compensating factors, versus conventional's 45–50% hard cap. For many Utah veterans with solid income but slightly wonky credit or high debt, VA is the only path to homeownership.
We'll pull your VA certificate, compare VA vs conventional rates/terms side by side, and show you the actual monthly savings. Takes about 10 minutes.
Check Your VA Benefits →Use your VA loan. It's not complicated. The funding fee is real, but it's built into a benefit that delivers lower rates, no PMI, and higher approval flexibility. Over a 5-, 10-, or 30-year hold, VA wins on cost almost every time.
The only exception: if you're putting 25%+ down and you're absolutely certain you'll stay more than 15 years, then run both numbers. But even then, most veterans come to the same conclusion — the VA benefit is there for a reason, and it pays for itself.
If you're a veteran in Utah, you've earned this advantage. Use it.