The Home Buyer's Korner

Information presented should be used for educational purposes only.

February 6th, 2014

Guy looking up in color

Veterans Certificate of Discharge

va certificate of eligibility

If you’re planning on getting VA mortgage loan the Veterans Administration imposes a VA Funding Fee unless you happen to be exempt.  The fee can be included in your mortgage and passed directly to VA to insure your lender against loss.

There are a few exceptions that allow for the fee to be waived:

  1. Veterans who have a service related disability and currently compensated by the VA.
  2. Veterans who would be receiving VA compensation due to service related disabilities, if they were not already receiving retirement pay.
  3. Spouses of veterans who passed away in service or because of service related disabilities. 

VA funding rates change from time to time, but the rates listed in this post are for VA mortgage loan are accurate as of February 6, 2014. If you are interested in taking out a VA loan past this date, consult your mortgage loan officer for up to date fees imposed by the Veterans Administration. 

VA funding fee vary based on the amount of the down payment, whether this is the first time the borrower has taken out a VA loan previously or whether you served on active duty or as a reserves or National Guard.  Additionally, those of us who served in active duty are categorized as either a first time user or subsequent user.   

  

Purchase – First Time Use  

Down Payment

  

Active Duty/Retired

  

Guard/Reserve

$0 Down

2.15%

2.40%

5-10% Down

1.50%

1.75%

10% or More

1.25%

1.50%

 

Purchase – Additional Use   

Down Payment   

Active Duty/Retired

  

Guard/Reserve

$0 Down

3.30%

3.30%

5-10% Down

1.50%

1.75%

10% or More

1.25%

1.50%

Cash Out Refinance   

 

    

VA Usage

  

Active Duty/Retired

  

Guard/Reserve

1st Time Use

2.15%

2.40%

Additional Use

3.30%

3.30%

 

Interest Rate Reduction Loan   

 

  

  

VA Usage

  

Active Duty/Retired

  

Guard/Reserve

1st Time Use

0.5%

0.5%

Additional Use

0.5%

0.5%

As you can see, the only change in the fee structures for first time and subsequent users is when the borrower goes with the “no down payment” option. The difference between the two ends up equaling 1.15%, which is a fairly significant amount of money.

If you are considering taking out a VA loan and would be classified as a subsequent user (meaning you have already taken out a VA loan in the past), then you might want to consider making a down payment.

Related Post

VA Certificate of Discharge

VA Certificate of Eligibility

VA Energy Efficient Mortgage

VA Loans & Short Sale Properties

VA Loans FAQ’s

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