What is the VA Loan Origination Fee?

Before borrowing for your mortgage, it’s important to understand origination fees. Choosing a lender to fund your VA home purchase loan or cash out refinance is a major decision that will impact how much money you will have to pay at closing. In this article, we will answer the question, What is the VA Loan Origination Fee?

When considering different mortgage lenders, one important factor to be aware of is what fees they will charge you. One of the fees mortgage lenders will charge you is the VA loan origination fee. A general description of loan origination fees will help you fully understand what they are and how they impact the cost of financing your VA home loan.

For any remaining questions on origination fees, call our VA loan experts at 800-720-0250. We will be able to review your application and quickly provide you with a free quote.

What is the VA Loan Origination Fee?

When obtaining a VA home loan, the loan origination fee is what the lender charges you in order to process your loan. It’s the fee you pay for the mortgage company to originate, or set up, your loan. Origination fees cover the wide range of costs mortgage lenders have when processing your loan. This includes the cost of underwriting your loan, scheduling appointments, collecting all of the necessary paperwork, and processing your application. Loan processing costs include verifying your employment, income, and assets.

“This was the best experience on a loan I have ever done.” – Wayne W.

The VA loan origination fee on a VA home loan is one way the lender makes money. The other way they earn money is by servicing your loan, including collecting your monthly payment and handling the escrow account. You will be required to pay the VA home loan origination fee at closing.

The VA loan origination fee is different from the VA funding fee.  Veterans have to pay the funding fee to the US Department of Veterans Affairs while the origination fee is paid to an approved VA lender.  The VA funding fee is charged on all VA loans by the Veterans Administration unless you are exempt.

The VA Funding Fee amount is smaller if you are doing an Interest Rate Reduction Refinance Loan (IRRRL).  One way to be exempt from the funding fee if you have a service connected disability.  This can save you thousands of dollars at closing because the funding fee is a percentage of the loan amount and can range from .5% to 3.6%.  Call our VA loan experts today 800-720-0250 for more information about the VA funding fee.

How Are VA Loan Origination Fees Calculated?

The VA loan origination fee is set by each individual VA mortgage lender. The Veterans Administration does not decide on the amount of the origination fee.  The amount is not regulated by the government. Each mortgage lender determines the loan origination fees they would like to charge in order to cover their operational costs of processing your loan.

The amount VA mortgage lenders charge varies significantly from lender to lender.  Some lenders have high salaries and expensive offices that may have a big impact on their origination fee amounts.

Understanding how loan origination fees from more expensive lenders can cost you more money is important to help you make the best decision for yourself.   Many veterans think they can’t save money on their origination fee but that’s not true.  Loan origination fees may be called by many different names.

Some VA lenders may charge a loan processing fee, underwriting fee, commitment fee, tax service fee, lock-in fee, application fee or many other types of fees.  The size of these fees matter if you are a veteran doing a VA refinance because usually these fees come out of your home equity at closing.  This means that bigger lender origination fees leave you with less equity in your home after closing.

The Cost of a VA Loan Origination Fee at HomePromise

At HomePromise, we proudly offer service members, veterans, and their families’ one of the most competitive VA loan origination fees in the country. Our HomePromise VA loan origination fee is only $590, no matter the type of loan or the total loan amount. To speak with our HomePromise experts about applying for a VA loan with a small origination fee, call us at 800-720-0250 to receive a free quote.

With a better understanding of VA loan origination fees, you can avoid being overcharged for your origination fee. Many lenders charge loan origination fees of over $1,000. Some mortgage lenders charge even higher amounts, such as 1% of the total loan amount. This adds a significant amount to your closing costs. Take a look at the huge difference the origination fee can make on your closing costs below:

When is the Loan Origination Fee Paid?

The loan origination fee is usually paid at closing as part of your closing costs. But some lenders require part of the Origination Fee at the time of loan application in the form of an application fee or commitment fee.  These fees are charged by some lenders even if your loan does not close.  Lenders like HomePromise don’t charge application fees or commitment fees.  You should always ask your lender what fees they charge and when they charge them.

Other closing costs can also include appraisal fees, title insurance, the VA funding fee, credit report changes, taxes, and surveys. Budgeting for the cost of your VA home loan origination fee is an important part of the home buying process.  A VA home loan expert at HomePromise can help you estimate your costs so you can feel safe buying a home without the risk of big jump in costs at the last minute.  Please call 800-720-0250 for more information.

Home buyers do have the option of asking the seller to cover the cost of their VA home loan origination fee. This is one way of decreasing your closing costs and avoiding an origination fee without increasing your interest rate. However, this must be negotiated and decided before your offer is made on a home.

Conclusion

Understanding VA loan origination fees can help you make an informed decision when choosing a mortgage lender, and it can also help save you money. When you’re ready to move forward with financing the purchase of your new home or doing a cash out refinance, turn to HomePromise as your mortgage lender. We offer military service members and veterans very competitive loan origination fees. Our VA loan origination fee is a flat $590, no matter the total loan amount.

HomePromise is approved with the U.S. Department of Veterans Affairs to provide VA home loans, whether for home buyers or existing homeowners who want to refinance. Our mission as a flexible and compassionate lender involves providing military service members with options that help save them money. We are here to help you make these important financial decisions with confidence.

HomePromise provides veterans and active duty service members with open communication over-the-phone about mortgage rates and discount points or any other questions about VA loans. Through HomePromise, you also have the option to apply online. Our VA loan experts will review your income sources, credit history, homeowner’s insurance costs and credit score to determine if you qualify for a VA loan. They will also answer any questions you may have and provide you with a free quote. Call us at 800-720-0250 to speak with one of our experts today. 

How Much is the VA Funding Fee?

Through the VA home loan, veterans, service members, and their spouses are eligible for a variety of useful benefits. What keeps the VA home loan and its benefits continuing year after year are the payments made from the VA funding fee. In this article, we will look at how much the VA finding fee is.

Figuring out how much you may owe for this fee when getting a VA loan is a hard task to handle without a mortgage professional. When you navigate the home buying process as a veteran, service member, or spouse of a veteran who died in the service, our HomePromise experts are here to help guide you at 800-720-0250.

What is the VA Funding Fee?

This type of fee is a one-time payment added onto the cost of the VA loan paid by the service member, veteran, or surviving spouse. The purpose of adding this fee to VA loans is to help cover any losses from defaulted loans. It also makes sure the program stays healthy and is still available for service members and their families in the future.

How Much Will It Be? 

The cost of the VA funding fee varies based on the loan amount, if you’ve used the VA loan program before, and how much money you put down. It’s important to note that the VA funding fee is based on the total loan amount, not the purchase price of the home.

“I would absolutely recommend HomePromise to anyone in need of a lender!” – Amy G.

Below is a chart detailing how the VA funding fee is calculated when buying a home:

Understanding the VA funding fee and how it applies to your VA loans is a complicated and important topic that will impact your future mortgage payments. Our HomePromise professionals are expertly trained to calculate the fees relevant to your VA loan. Contact us today at 800-720-0250 to get a free quote, speak with a professional, and get all your questions answered.

How the Fee is Paid

Now that you understand your potential amount, the next question is: how do I pay the it?

If you’re required to pay this fee, the payment is due at closing. Your mortgage lender is responsible for collecting the payment from you and sending it directly to the U.S. Department of Veterans Affairs.

Veterans, service members, and surviving spouses have options when deciding how to pay for the funding fee. They can pay the fee out-of-pocket at their closing, finance the or ask the seller to pay for the fee on their behalf. It is most common to finance the fee by rolling it into the loan amount.  If you are asking the seller to cover your cost, this must be pre-determined when the offer on your home is accepted.

When applying for VA loans, you should know that the U.S. Department of Veterans Affairs determines who has to pay the funding fee.  Your VA Certificate of Eligibility who show whether you have to pay the VA funding fee or not.

VA Funding Fee Exemptions: Are Disabled Veterans Exempt?

When veterans get VA loans, they are eligible for a variety of benefits, including great interest rates, no money down, no monthly mortgage insurance, options for lower credit scores, and limits on closing costs. These VA home loan benefits are lifetime benefits.

In addition to these benefits, disabled veterans are eligible to receive even more VA benefits. These benefits include special housing grants, property tax exemptions, disability compensation benefits for veteran income, and exemption from the funding fee.

Disabled veterans, surviving spouses of veterans who passed away in action or from a service-related injury or illness, and active-duty service members who have received a Purple Heart are all exempt from the VA funding fee. Members who are currently receiving disability benefits are able to waive the VA funding fee regardless of their level of disability.

Looking at our chart for VA funding fee amounts, being able to waive the VA funding fee can help disabled veterans save thousands of dollars in closing costs when purchasing a home. If you recently loan closed before you started receiving disability benefits, you may still be eligible to have your VA funding fee returned to you if you were in the middle of applying for disability at the time.

In order to be eligible for VA loans and the benefits they provide, veterans must meet specific requirements. Veterans with disabilities arising from injuries sustained in the line of duty may be eligible for a VA loan without meeting all of the necessary requirements.

A Certificate of Eligibility, commonly referred to as COE, is the document required by lenders in order to waive the VA funding fee. Before applying for a VA loan where the VA funding fee is waived, the majority of veterans have to meet the following criteria:

Determining your eligibility for VA loans and waiving the VA funding fee can be difficult to determine. Through their extensive training, our HomePromise VA home loan professionals can walk you through these complicated matters. Contact our experts today at 800-720-0250 to get help and a free quote.

Conclusion

HomePromise is a flexible lender approved with the U.S. Department of Veterans Affairs to provide VA home loans. We provide flexible services to meet the needs of service members and veterans, including over-the-phone, in-person, and online. Our VA loan experts are here to guide you through the process of applying for VA loans.

When you call HomePromise, our VA home loan professionals will treat you with care and compassion as they answer all of your questions. We will review your income sources, credit score, and credit history to determine if you qualify for a VA loan. We will also help you determine the amount you owe for the VA funding fee, if any.

Home Loans for Disabled Veterans

Understanding VA loans and the great benefits they offer disabled veterans is a hard subject matter to tackle alone. Seeing whether you qualify to waive the VA funding fee, how your disability compensation helps your income, and how you qualify for a VA home loan are some of the most commonly asked questions disabled veterans have when applying for a VA loan. Our HomePromise experts are professionally trained to help guide you through these important financial decisions. Home Loans for Disabled Veterans are possible with us.

What are the VA Home Loan Benefits for Disabled Veterans?

There are many VA home loan benefits available to veterans who qualify, including no money down, no monthly mortgage insurance, options for lower credit scores, limits on closing costs, and competitive interest rates. Many think that these VA home loan benefits are one-time benefits, but this is not true. These VA home loan benefits are benefits for life.

“HomePromise’s professionalism and personal touch instilled confidence and trust.” – Kimberly P.

Disabled veterans are eligible to receive added VA home loan benefits on top of the ones already explained above. These benefits include property tax exemptions, disability compensation benefits for added income, special housing grants, and exemption from the VA funding fee.

Property Tax Exemptions for Disabled Veterans

Property tax exemptions can help disabled veterans reduce the amount of real estate taxes they owe each year. Looking further into your eligibility for property tax exemptions and credits may help save you thousands of dollars when purchasing a home.

Real estate tax laws can change, each state has different criteria for qualification, and the amount of benefits you receive is typically proportionate to your disabled status.

Real Estate tax laws are complicated, and it’s best to consult with a professional to review your eligibility for property tax exemptions. Our HomePromise professionals are expertly qualified to provide a thorough review of you’re the available property tax exemptions and how they affect qualifying for a VA loan. Call us today to schedule your appointment at 800-720-0250. Get the facts about Home Loans for Disabled Veterans with us.

Disability Compensation Benefits for Veteran Income

One of the most common questions about disability compensation for veterans is whether or not this helps your income when applying for a VA loan. When disabled veterans apply for a VA mortgage, you still need to follow the normal process for documenting your income. However, you can use your disability compensation as part of your income when applying for a VA mortgage. The higher the income, the greater chance you have of getting a mortgage.

Are Disabled Veterans Exempt from the VA funding fee?

Disabled veterans, surviving spouses of veterans who passed away from service-connected medical issues, and active-duty service members who have a Purple Heart may all be exempt from the VA funding fee. This means that veterans who are currently getting disability benefits are usually able to waive the VA funding fee saving you thousands of dollars.

Being eligible to waive the VA funding fee helps disabled veterans save thousands of dollars in closing costs when purchasing a new home or refinancing their current one. Even if you close on your loan before you start to receive benefits, you may be eligible to have your VA funding fee returned to you if you were in the middle of applying for disability at the time.

Our VA home loan experts can help guide you through understanding how your VA disability can save you money on your VA funding fee.

How do Disabled Veterans Qualify for VA Loans?

Veterans must meet some requirements before they can become eligible for VA loans and all the benefits they provide. The most common form of documentation required by VA lenders is a Certificate of Eligibility, commonly referred to as a COE. The majority of veterans have to meet the following criteria before applying for a VA loan:

• National Guard
• Served more than 6 years
• Active Service During Peacetime
• Served for 181 days
• Active Service During Wartime
• Served for 90 consecutive days

The qualification rules for a VA loan are hard to figure out. At HomePromise, our VA home loan professionals are expertly trained to handle your questions. Contact our experts today at 800-720-0250 to receive a free quote.

Are There Grants Available to Help Disabled Veterans? 

In addition to the benefits for disabled veterans when financing a home through a VA loan, disabled veterans may also qualify to receive specific grants to help with accessibility modifications to a home. The Special Housing Adaptation (SHA) and the Specially Adapted Housing (SAH) grant are two grants that may be available for disabled veterans with a service-connected disability rating from the VA.

Each grant provides their own benefits for disabled veterans, including building a home with modifications for the veteran’s disability, remodeling the veteran’s current home to meet their disability requirements, changing a home that the veteran intends to purchase in order to meet the needs of their disability, and more. You can find out more about housing grants on the VA website Housing Grants.

If a disabled veteran isn’t eligible for either of these grants, another option available to them is a VA refinance designed to take money out of your home for home improvements. In addition to a grant, a VA refinance may be helpful if the work the veteran needs done is greater than the grant will allow. To help navigate these options, call our HomePromise experts today at 800-720-0250. Our VA loan professionals will provide you a free quote quickly and easily.

How Does Disability Compensation Contribute to VA Home Loan Applications?

In order to qualify for a VA loan, the veteran must have a reliable source of income that is likely to continue into the future. As disability compensation is expected to continue for disabled veterans, this income source counts toward your qualifying income when applying for a VA loan. Veterans who receive disability compensation from the VA are able to count this as income when completing a VA loan application. Putting your disability compensation toward your income can help you meet VA loan income requirements.

Conclusion

HomePromise is a flexible and compassionate lender approved with the U.S. Department of Veterans Affairs to provide VA home loans. The HomePromise approach takes into account the unique needs of each veteran and their families. Our HomePromise experts will review your credit score, credit history, and income sources to see if you qualify for a VA loan.

In addition to over-the-phone and in-person, our flexible services also include the ability to apply online. Our VA loan experts are here to provide you expertise to help you navigate these important decisions. Call us at 800-720-0250 to receive a free quote from one of our experts today.

Can I Get a VA Loan if I Don’t Have a Job?

VA lenders have to consider your sources of income when applying for a VA loan.  Having a job can be a big plus as a loan applicant for a VA mortgage but it isn’t required.  The VA home loan program allows lenders to look at other sources of income. In fact, some VA lenders can even turn your assets into income to qualify for a VA loan application. Can I get a VA Loan if I Don’t have a job? Keep reading to find out.

So, having a job isn’t a requirement if you find a lender who can work with your other income sources. The key is to find a flexible VA lender who knows how to work through the complicated VA lending rules.

Can I Use Part Time Income to Qualify for a VA loan?

Some service members are worried that a part-time job can’t be used for a VA mortgage application. You may have been told that only full time income is allowed. That’s not true in all cases. The key is how your lender does the verification of income when they review of your employment history. 

A part time job can be used as qualifying income but there are some special rules that a VA loan expert will help you navigate.  An expert review of your pay stubs will also be important to be able to use part time income.  If you call one of our VA loan experts at 800-720-0250 you can find out if your part time job can be used for a VA loan application.

“I highly recommend HomePromise without hesitation.” – Debra H.

Using VA Disability Income to qualify for a VA loan

A helpful source of income for some veterans is from a VA service-connected disability.  Some lenders will allow you to use a special calculation of your disability income to increase the income amount to a level higher than is used by other VA lenders.  This increase (some call it a “gross up”) is very important to get you the most income from your VA disability.  This approach to VA disability income worries some lenders so they make the income lower than is allowed by the VA.  If you have lower income allowed from your VA disability, then you might get denied for a VA loan when you shouldn’t be.  If you don’t have VA disability income yet but you think you might be eligible for it, you can find out how to submit a VA disability claim on the VA website File Claim.

Get an Expert Review of your Tax Returns

An expert review of your tax returns may uncover income that some VA lenders may overlook.  Tax returns are very complicated and not all lenders are experts and reading them.  You may find that you can get approved for a VA loan using income that can be uncovered in your last two years of federal income tax returns.  A VA home loan expert at HomePromise can do that review for you and give you feedback to see if income can be found to use for a VA loan.  Give us a call at 800-720-0250 to get an expert review of your tax returns.

Other Kinds of Income

There are other kinds of income that can be used for VA home loans including retirement income, social security income, your spouse’s income, a family member’s income and investment income.  These each have some VA lending rules that have to be used to determine if they are acceptable and how much of these income sources can be used.  If these income sources come in on a monthly basis then you should discuss them with a VA lender as an alternative income source.

Get Expert Advice Today

HomePromise is a flexible lender approved with the US Department of Veterans Affairs to make VA home loans.  The HomePromise approach is not a rigid approach but one that takes into account your special circumstances.  At HomePromise, we will review your credit score and credit history along with your income sources to see if you qualify for a VA loan.  Call us at 800-720-0250 for help today.