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What is the VA Funding Fee?

Posted On: October 13th, 2017 1:29AM

What is the VA Funding Fee?

The VA loan offers outstanding benefits for eligible veterans. These hard to beat benefits include a no down payment requirement, lower interest rates and no private mortgage insurance. When added together, these benefits can save VA buyers a significant amount on out-of-pocket costs. At the center of the program is the VA guarantee. You can think of it like insurance the VA provides to the lender in case the buyer defaults on the loan. In order to continue to offer this amazing loan program, the VA charges a funding fee to cover the cost of offering the guarantee.

 

The funding fee is a one-time fee charged by the VA on every VA loan. The fee ranges from 2.15 percent to 3.3 percent of the loan amount depending on your type of service and whether this is your first or subsequent use of the loan program. The fee is discounted if you choose to make a down payment and the fee is waived if you receive compensation for a service connected disability.

 

The funding fee is treated differently than other closing costs in that it can be rolled into your loan amount or you can choose to pay it at closing. There are a few exceptions or deviations from this chart for certain circumstances or loan products. You'll want to talk with a knowledgeable lender to determine the funding fee for your particular loan type and circumstances.

 

As a VA-savvy real estate agent I can guide you through the homebuying process using your VA loan. I have the knowledge and expertise to make it a great experience. Give me a call today!

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