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Veterans with disabilities, How To Get A VA Loan With A 580 Credit Score, homepromise

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. 

Figuring out how much you may owe for the VA funding 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?

The VA funding 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 is the VA Funding Fee? 

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. 

Buyers who are using the VA loan program for the first time pay a lower fee than returning users. The VA funding fee is calculated at 2.3% of the loan amount of your VA home loan. For buyers who have previously obtained a VA loan, the funding fee is 3.6%. This amount can be reduced at closing by putting at least 5% down when buying a home. 

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

First-Time VA Loan User After First Use of the VA Loan Down Payment Amount
2.3% 3.6% Less than 5%, including no down payment
1.65% 1.65% 5% or more
1.4% 1.4% 10% or more

Understanding the fee percentage amounts is one thing, but understanding how they apply to the total loan amount for your home is another. Below is a chart with a few examples based on the VA loan amount:

  Down Payment Amount $100,000 VA Loan Amount $200,000 VA Loan Amount $300,000 VA Loan Amount
First-time use Less than 5% $2,300 $4,600 $6,900
First-time use 5% or more $1,650 $3,300 $4,950
First-time use 10% or more $1,400 $2,800 $4,200
After first use Less than 5% $3,600 $7,200 $10,800
After first use 5% or more $1,650 $3,300 $4,950
After first use 10% or more $1,400 $2,800 $4,200

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 800-720-0520 to get a free quote, speak with a professional, and get all your questions answered. 

How the VA Funding Fee for VA Loans is Paid

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

If you’re required to pay the VA funding 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 VA 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 VA funding fee, 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 from the VA Funding Fee?

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 VA 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: 

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

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 800-720-0520 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. 

Call us at 800-720-0250 to receive a free quote today!

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