Dave Ramsey Says VA Home Loans Are Bad — Here’s the Full Story
Recently, financial expert Dave Ramsey made headlines by stating that the VA home loan program “sucks” and that military members and veterans should avoid using it. To discuss this controversial opinion, a subject matter expert wade in: David Pere from VA Housing Education.
Before diving into Dave Ramsey’s claims, David explains that it’s unfortunately very common for veterans to be steered away from using their hard-earned VA benefits due to misunderstandings about how the VA loan actually works. One of David’s missions is to educate veterans and service members about the true advantages — and occasional pitfalls — of the VA loan program.
What Did Dave Ramsey Say?
During a recent call-in segment of the Dave Ramsey Show, a service member named Walter from Yuma, Arizona, asked about the best way to purchase a home while minimizing debt. Ramsey emphasized that both the VA loan and the FHA loan are “the most expensive” ways to borrow, stating that unless a veteran is disabled (thus exempt from the VA funding fee), the VA loan comes with high costs and “gotchas” that make it unattractive.
Is Dave Ramsey Wrong About the VA Loan?
David Pere agrees that, on paper, the VA loan can sometimes have higher costs compared to certain conventional loans. However, he stresses critical points that Ramsey’s take overlooks:
- Marketing Costs: Some lenders that heavily advertise to veterans charge excessive fees. Veterans should shop around to find reputable lenders.
- VA Funding Fee: Veterans with a 10% or higher service-connected disability rating are exempt from the VA funding fee, dramatically reducing loan costs.
- No Down Payment: The VA loan allows qualified buyers to purchase with no down payment — a major advantage that often outweighs slightly higher fees.
- Competitive Rates: Even factoring in the funding fee, VA loans frequently offer lower monthly payments compared to conventional loans requiring private mortgage insurance (PMI).
In short, David highlights that the VA loan, when used properly and with good financial habits, remains one of the most powerful tools available to veterans and service members to build long-term wealth through homeownership.
Maintaining Your Credit Matters
Another important point raised is the importance of maintaining a credit history. Dave Ramsey encourages a debt-free life, which is admirable. However, veterans need to know that having an active credit history — even with zero debt — is crucial for securing favorable mortgage terms. Without a credit score, obtaining any mortgage (including a VA loan) can become more complicated and expensive.
Final Thoughts
Both Dave Ramsey and David Pere agree that financial discipline is essential. However, veterans should not dismiss the VA loan based on a blanket statement. Each veteran’s financial situation is unique, and the VA loan remains a fantastic benefit — especially when used wisely.
Disclaimer: The information presented in this article is for educational and informational purposes only. It reflects the opinions of the original speakers and VeteransBenefitsHub.com and should not be taken as personalized financial advice. Readers are encouraged to consult with qualified financial advisors or mortgage specialists before making decisions regarding VA loans or homeownership.
