Everything else keeps changing – why not VA loans too!! However, these changes will save you some money!
The VA funding fee (a fee that is charged on all VA loans, but typically added to the mortgage) is actually dropping on October 1, 2011. For those that are using their VA benefits for the first time, the funding fee will drop to 1.4% of the mortgage amount. It was at 2.15%! For those that have used their benefit before, it is dropping from 3.3% to 2.80%.
If you are putting more than 5% down on a VA loan, the funding fee is even lower – it drops to .75% whether you have used your benefit before or not.
For those in the reserves and national guard, the first time use fee is 2.65% but the subsequent use fee is still 2.80%.
If you receive VA disability benefits or have a disability due to military service, you may not be charged any VA funding fee. The VA determines if you pay a partial funding fee or if it is completely eliminated.
This VA circular will expire on October 1, 2012 and at that time it will depend on any changes that Congress will make. This change is due to the passage of Public Law 112-26, Restoring GI Bill Fairness Act of 2011.
Remember on VA loans – there is not a monthly mortgage insurance payment. The only additional charge is the funding fee so it helps to lower your monthly payment. There are also a few fees at closing that the Vet cannot pay – they can't be charged a commitment fee or a closing fee.
VA loans are a wonderful way to buy a home. It is one of the programs left that allows for zero down and the interest rates are great. If you have more questions, please contact a loan officer to see about getting qualified to purchase a new home!
Leslie Vanderwerf, NMLS ID#335509, Advisors Mortgage - Email – Website
