Are you a veteran considering a VA loan? If so, then it's important to understand the VA Funding Fee. Veterans Affairs (VA), helps defray some of the cost associated with providing mortgages and loan guarantees for military veterans. In this blog post, we'll examine what exactly the VA Funding Fee , as well as who pays it and how much they may need to pay. We'll also look at instances in which homeowners can be exempt from paying this fee or have it refunded. Read on to learn more!
Overview of the VA Funding Fee:
The VA Funding Fee a one-time fee that helps cover the cost associated with providing loans to military veterans. It can range from 1.25% - 3.3% of the loan amount depending on eligibility status and loan type. It can be paid in cash at closing or added to the principal balance of the loan.
Who Pays the VA Funding Fee?
Typically, veterans who are taking out a home loan using their VA benefit will be responsible for paying this fee. However, according to certain eligibility criteria, there may be instances where another entity pays the VA Funding Fee on behalf of a veteran. For example, some disabled veterans may not have to pay the fee. Additionally, if a veteran is refinancing their home loan, they may be able to have the Funding Fee waived if the new loan amount does not exceed their original one.
How Much Does the VA Funding Fee Cost?
The cost of the VA Funding Fee depends on several factors, including eligibility status and loan type. For first-time use loans, the fee typically ranges from 1.25% - 3.3% of the total loan amount.
Refinanced loans typically have a lower rate of 0.5% - 1.25%. Disabled veterans are exempt from paying this fee altogether under certain circumstances; however, it's important to note that in order for disabled veterans to qualify for exemption or refunded VA Funding Fees, they must provide proof of their disability with the appropriate documentation.
Exemptions from Paying the VA Funding Fee:
In some cases, veterans may be exempt from paying the VA Funding Fee. Active-duty service members are typically exempt from this fee if they are taking out a loan for a home purchased in an area designated as a “high-cost area” by the VA. Additionally, disabled veterans who qualify and provide proof of their disability status may also be exempt from paying this fee.
Refunds on VA Funding Fees:
If a veteran takes out a loan to purchase or refinance their home, then they may qualify for a refund of their VA Funding Fee if certain conditions are met. Those who can demonstrate that they were overcharged due to incorrect calculations or errors made by their lender may be able to recover some or all of the fees they paid. Additionally, if a veteran refinances their loan and the new loan amount is not greater than the original one, then they may be eligible for a full refund of their VA Funding Fee.
What is the VA funding fee for first time use?
The VA Funding Fee for first-time use loans typically ranges from 1.25% - 3.3% of the total loan amount.
How to Calculate Your Specific VA Funding Fee Amount?
The specific amount of VA Funding Fee you may need to pay depends on your eligibility status, loan type and the amount of your loan. To calculate your estimated VA Funding Fee amount, you can use the VA’s online Loan Guaranty Calculator.
Is There a Way to Waive or Reduce Your VA Funding Fee Payment?
Yes. In some cases, veterans may be eligible to waive or reduce their VA Funding Fee payment. Those who qualify for exemption due to specific circumstances, such as active duty service members taking out a loan in a high-cost area or disabled veterans providing proof of their disability status, may not have to pay the fee at all. Additionally, those who are refinancing an existing loan may be able to have their VA Funding Fee waived if the new loan amount does not exceed the original one.
Conclusion:
Understanding the VA Funding Fees is key for military veterans who are considering taking out a home loan using their VA benefits. This one-time fee helps cover the cost associated with providing loans to veterans, and it typically ranges from 1.25% - 3.3% of the total loan amount, depending on eligibility status and loan type.
Those who qualify may be able to have this fee waived or refunded in certain instances; however, it’s important that all requirements be met in order for this to occur. By understanding what the VA Funding Fesses are, how much it cost and what options you may have for reducing or eliminating payment on your loan, you can make a more informed decision about whether a VA loan is right for you.
FAQs:
Q: How much does the VA Funding Fee cost?
A: The cost of the VA Funding Fee depends on several factors, including eligibility status and loan type. For first-time use loans, the fee typically ranges from 1.25% - 3.3% of the total loan amount. Refinanced loans typically have a lower rate of 0.5% - 1.25%. Disabled veterans are exempt from paying this fee altogether under certain circumstances.
Q: Is there a way to waive or reduce my VA Funding Fee payment?
A: Yes. In some cases, veterans may be eligible to waive or reduce their VA Funding Fee payment. Those who qualify for exemption due to specific circumstances, such as active duty service members taking out a loan in a high-cost area or disabled veterans providing proof of their disability status, may not have to pay the fee at all. Additionally, those who are refinancing an existing loan may be able to have their VA Funding Fee waived if the new loan amount does not exceed the original one.
