Today we thank those who have served in our military and their families. I thought it was appropriate to remind people about VA loans since the only way to get a VA loan is to have served in our military!
VA loans are a great way to buy a home – they are one of two ways to buy zero down, the other is a USDA loan. You can use VA financing more than once and each time you use it, zero down is still an option. This can really help a veteran buy their first home. VA loans do not have a monthly mortgage insurance premium like FHA loans. They do have a VA funding fee that varies based on your down payment and if you have used your VA benefit before.
The VA funding fee for a first time user with zero down is 2.3% of the mortgage amount. Here is a table showing the funding fee for a purchase and the first time use:
For those that have used VA financing and want to use it again, the VA funding fee increases. If you put less than 5% down on a purchase, the VA funding fee is 3.6%. It’s added to your mortgage, so you do not need to pay for it at closing. If you put at least 5% down, but less than 10%, the VA funding fee drops to 1.65%. Remember there is not a monthly fee, just the funding fee added to your mortgage. This helps lower your monthly payment.
For those veterans that have a service related disability, the VA funding fee may be reduced or eliminated. We need to get your VA certificate of eligibility and it will tell us if your VA funding fee is reduced. In Minnesota, disabled veterans also want to check with your county as you may also get a reduction in your property taxes. Not everyone is aware of this, so make sure you contact the county to find out if you qualify for reduced taxes.
VA mortgages also have reduced closing costs. There is a limit to how much you can pay for lender fees on a purchase and a refinance. The seller can contribute to your closing costs, so if you are putting zero down, there is a possibility of putting very little into your purchase.
Thank you to all those that have served our country. I have many family members that have served in our military and I truly appreciate the sacrifices they have made and their families have made.
Leslie Vanderwerf, NMLS ID#335509, Cross Country Mortgage LLC, An Equal Housing Lender, NMLS#3029 – Email – Website