A VA-backed loan is one of the few mortgage products that allow the borrower full leverage -- that is, the ability to finance 100 percent of the purchase price (no money down). u00a0Especially in places where home prices are rising quickly, this can be a huge benefit. Trying to amass a downpayment of 5 or 10 percent as home prices are rising by 5 percent or more is a process of chasing ever-moving goal posts, but a no money down opportunity allows you to make a purchase now. u00a0While there is no mortgage insurance, you will be required to pay a loan funding fee; essentially, this is a one-time MI premium. The amount you are charged can vary, ranging from a low of 1.25 percent (with a 10 percent down payment) to as high as 3.3 percent of the loan amount. Factors influencing MI include: the loan size, down payment amount (if any), whether or not a borrower has had a previous VA loan, and the borroweru2019s military category. With the most common VA loan -- the no-money-down option -- the VA Funding Fee for regular military is 2.15 percent and the fee is 2.4 percent for those in the Reserves or National Guard.u00a0Another very valuable feature of VA-backed mortgages is that lenders do not use risk-based pricing. This means that even if your credit isn't all that high up the scale you won't see a higher interest rate or fees than someone who is closer to perfect. This is a considerable advantage when compared against conventional Fannie Mae or Freddie Mac-backed loans, where a FICO score of 620 means several percentage points in additional fees to obtain the same rate as a borrower with a FICO 740.u00a0If you can meet eligibility, a VA-backed loan can be a good way to purchase or refinance a home.