VA loan funding fee
To put it simply, the VA Loan is also known and quite commonly regarded as the GI Bill of Rights through the Servicemen’s Readjustment Act. This bill is designed to specifically help veterans get a federally guaranteed house without the need for them to take care of a down payment, and it was signed into by the former President Franklin D. Roosevelt.
It is needless to say that the main objective behind VA Loan is to provide housing help to millions of veterans and their families. Through this financing program, many people were able to fulfill their dreams of finally purchasing their own house. Also, apart from being always considered history’s most helpful program to develop the welfare of its recipients, the GI Bill is likewise remarkable in terms of aiding in the economic progress of the US.
VA Funding Fee Explained
It is almost impossible not to associate the VA Loan with the VA funding fee, which is required by law. Presently slated at 2.15 percent on no down payment for an applicant who intends to make use of it for the first time, the said fee is charged to the veterans who actually use the VA home loan to allow them to contribute to the cost of the benefit they’re actually utilizing.
This just means that the financial burden to other taxpayers who have to pay for it is lessened, so in a nutshell, the VA funding fee sort of makes things fair to the citizens – veteran or not. Now, the reason why there’s a higher fee percentage for second time users is because these veterans were already given the chance to take advantage of their VA loan before, so it’s taken to mean they likewise had sufficient time to actually save up for a down payment.
It is important to remember that both the VA fee and the down payment required are both dependent on a few determining factors. For instance, options are available for military members who want to use purchase and constructions loans. It’s zero down payment with a 2.15 percent fee, or it can also be up to 10 percent down payment with a 1.5 percent fee.
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