What Is A Funding Fee?
Posted on June 5, 2008
Filed Under Home Mortgage |
If you have already become involved in the process of getting a loan through the veterans Administration, there is a fee you might want to be aware of as you are proceeding with your application. It is called a funding fee.
Essentially, you will be required to pay a 2% funding fee to the VA unless you happen to qualify for specific exemptions. If you can pay a down payment of 5% or more, this fee will be reduced to 1.5%. If you manage a 10% down payment, that fee will be lowered to 1.25%.
If you are an eligible Reserve or National Guard seeking a loan, you will have to pay 2.75% funding fee. Like other veterans, paying down payments of 5% or more, or 10% or more will reduce the funding fee to anywhere from 2.25% to 2%.
If you are in the process of refinancing a loan with the VA, the new VA loan with have a funding fee of 0.5% to lower the interest rate. If you are a veteran and you’re planning to use an entitlement for a second or subsequent time, and you do not put down at least 5% as a down payment, you will be charged a 3% funding fee.
Mortgage-Guide-Info.Com for funding fee