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VA Loan Information
COSTS OF OBTAINING A VA LOAN
Funding Fee
A basic funding fee of 2.15 percent must be paid to VA by all but certain exempt
veterans. A down payment of 5 percent or more will reduce the fee to 1.5 percent
and a 10 percent downpayment will reduce it to 1.25 percent.
A funding fee of 2.40 percent must be paid by all eligible Reserve/National Guard
individuals. A down payment of 5 percent or more will reduce the fee to 2.75 percent
and a 10 percent downpayment will reduce it to 1.5 percent.
The funding fee for loans to refinance an existing VA home loan with a new VA home
loan to lower the existing interest rate is 0.5 percent.
Veterans who are using entitlement for a second or subsequent time who do not make
a downpayment of at least 5 percent are charged a funding fee of 3.3 percent.
NOTE: For all VA home loans, the funding fee may be paid in cash or it may be
included in the loan.
Other Closing Costs
Reasonable closing costs may be charged by the lender. These costs may not be
included in the loan. The following items may be paid by the veteran purchaser,
the seller, or shared. Closing costs may vary among lenders and also throughout
the nation because of differing local laws and customs.
- VA appraisal
- Credit report
- Loan origination fee (usually 1 percent of the loan)
- Discount points
- Title search and title insurance
- Recording fees
- State and/or local transfer taxes, if applicable
- Survey
No commissions, brokerage fees or "buyer broker" fees may be charged to the
veteran buyer.
NEED MORE INFORMATION ABOUT VA LOANS?
Veterans seeking more detailed information concerning the VA home loan program
may request VA Pamphlet 26-4
or VA Pamphlet 26-6 from the nearest VA office.
Loan Guaranty personnel at that office will also be pleased to answer specific
questions and provide any other assistance they can.
Remember, VA-guaranteed financing is a benefit which Congress intended eligible
veterans should have. If you are a veteran homebuyer or know of one, it makes
sense to look into the VA loan program as a good way to finance a home
purchase.
FREQUENTLY ASKED QUESTION # 23 [ -more VA Loan questions- ]
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Q: Does the VA Charge A Fee? - Are there fees associated with my VA home loan?
A: There is a "VA funding fee" required by law. A first-time buyer will pay a little over two percent for a 'no money down' loan, and a second time buyer's fee is just above three percent. The reason for the fee includes the idea that the veteran is reducing taxpayer burden by contributing to the cost of his VA mortgage. The higher fee for second-time borrowers presumes that there is equity in the home, or the borrower has had plenty of time to save in order to pay for the extra percentage. There is also a fee for VA refinance loans, and they fall within the same general price guidelines; just above two percent for first-timers and just above three percent for those who borrow again.
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Remember, the VA does not make home loans. They insure the loans that we can assist you in getting.
Let us help you get a VA insured mortgage loan at the lowest possible rates.
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