VA Home Mortgage Loan Fees
Videos feature Tim Lewis, VA Loan Team Manager, NMLS #157603.
What is the VA funding fee and how does it work?
The VA funding fee must be collected by lenders as required by the Federal Government. It was established in order to offset some of the taxpayer costs associated with the VA Home Loan Guaranty Program. For regular military borrowers, the VA funding fee for purchases is a standard 2.15% for first-time VA loan use and 3.3% for subsequent use. Cash-out refinancing loans for regular military require a fee of 2.15% for first-time use and 3.3% for subsequent use. The Streamline VA Refinance funding fee is generally just .5%. Funding fees can be slightly higher for Reserve and National Guard veterans. The VA funding fee can be reduced with a down payment. For example, in a typical scenario, 10% down reduces the funding fee to 1.25%. Certain veterans with service-connected disabilities and spouses of veterans who died in service or from service-connected disabilities are exempt from VA funding fees. The VA determines who is exempt.
You can speak with a VA loan professional to learn more about the VA funding fee in your situation.
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