VA Loans and the VA Funding Fee

Posted March 13th, 2012 by admin

When you purchase a home with a VA loan, the VA charges a one-time fee in order to insure your loan without a monthly mortgage premium.
This one-time fee is known as the “VA Funding Fee”. It has changed over the years, but right now the funding fee is at 2.15% of the loan amount. The Funding fee may be waived or reduced if the veteran is disabled in active duty.
What this means to you:
The VA Funding Fee may be financed into the loan so that you do not have to pay it at closing. That being said, your monthly payments will increase due to the funding fee being bundled into the loan since it increases the total loan amount will increase as a result. Even with the increased monthly payments due to a higher loan amount, you will still be saving A LOT of money compared to comparable loan products. Currently, the FHA will insure loans with a minimum of 3.5% down. The VA will insure a mortgage with 0% down. The FHA has a monthly premium of 1.15% annually for a MINIMUM of 5 years. Not the case with VA. With a VA mortgage you have NO MORTGAGE INSURANCE TO PAY!

Text the word “info” to 858-876-SDVA (7382) for more information.

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