VA Loan Mortgage Funding Fee
The VA funding fee is required by law, and at present, the fee is 2.15% on no down payment va loans for a first-time use. Its purpose is to enable the veteran who obtains a VA home loan to contribute toward the cost of this benefit, resulting in the reduction of costs to taxpayers.
The funding fee is 3.3% for second time users who do not make a down payment. Based on the fact that these veterans have already had a chance to use the benefit once, and also that prior users have had time to accumulate equity or save money towards a down payment, thus comes the idea of a higher fee for second time use.
Members of the regular military fall into the category of first time user or subsequent user for purchase and construction loans.
Special Rules Regarding VA Funding Fee
The following apply for first time users: no down payment requires a 2.15% fee, up to 10% down payment requires a 1.5% fee, and 10% or more requires a 1.25% fee.
The following apply for subsequent users: no down payment requires a 3.3% fee, up to 10% down payment requires a 1.50% fee, and 10% or more requires a 1.25% fee.
In the Reserves/ National Guard category, the following apply for first time users: with no down payment requires a 2.4% fee, up to 10% down payment requires a 1.75% fee, and 10% or more requires a 1.5% fee.
For subsequent users, no down payment requires a 3.3% fee, up to 10% down payment requires a 1.75% fee, and 10% or more requires a 1.5% fee.
A cash-out refinancing loan for regular military requires a 2.15% fee if required for first time users. A cash-out refinancing loan for regular military requires a 3.3% fee for subsequent users. For Reserves / National Guard, a 2.4% fee for first time users and a 3.3% fee for subsequent users is required.
The VA funding fee is .50% on interest rate deduction loans. Manufactured Home Loans, require a funding feed of 1.0%.
Reduced Fee for Disabled Vets
Veterans receiving VA compensation for service-connected disabilities are exempt from paying the funding fee. Likewise, Veterans who would be entitled to receive compensation for service-connected disabilities are excluded from these costs, if they did not receive retirement pay.
Surviving spouses of veterans who died in service or from service-connected disabilities (no matter if such surviving spouses are veterans with their own entitlement and no matter if they are using their own entitlement on the loan) are not liable the funding fee.
How to Get Started
It’s important to understand the VA has the final say on who is exempt. Contact a loan specialist today to get more details. They will be able to help you get the process started and outline all possible fees charged by the VA or the lender. The process couldn’t be easier, click here to get startedva refinancing | veteran mortgage