If you were ever in the military and want to buy a house, you have the option of choosing a VA loan as your mortgage loan, and this is also true for anyone who is currently serving in any of the branches of the U.S. military. VA loans offer a host of benefits to those who qualify, and they are usually the best type of loan for people who qualify. If you choose to get a VA loan, you will likely have to pay a funding fee for the loan, and here are three things you should understand about this fee.
It Is a One-Time Fee
Unlike the fees used with some other types of loans, the funding fee you pay for a VA loan is a one-time fee, and it is designed to cover some of the expenses and risks the Department of Veteran's Affairs has for backing up these loans. The amount you will pay for the fee is dependent upon several different factors, but one of the main factors that determines your fee is the amount of money you use for the down payment. If you put very little or no money down, the fee will be a little bit higher. If you put a decent amount down, it will be lower. The fees vary, but you should expect to pay between 1.25% to 2.4% of the purchase price of the house.
You Do Not Have to Pay It Upfront
If you are planning on getting a VA loan and do not have a lot of money for the down payment, you might be worried about how you will pay the funding fee and other closing costs. The good news is that the closing costs of VA loans are typically less than the closing costs of other loan types, and you can typically add the funding fee and other closing costs into your loan. This means that you will not have to pay it out of your pocket when you take out the loan. Instead, you can pay it off over time as you make your mortgage payments.
You Might be Able to Exempt the Fee
Additionally, there are people who qualify to have this fee exempted, which means they do not have to pay it at all. There are two main reasons the VA will exempt a fee, and one is if your spouse was in the military and died while serving. The other reason involves having major disabilities from serving in the military.
If you are interested in learning more about VA loans, funding fees, and other costs, contact a lender who offers these types of loans.Share
14 February 2019
When I began my first business selling sports equipment locally, I knew the sports-world well, and I knew how to run a business. One thing I did not know a lot about was the financial world. I had never applied for a loan in my life other than when I financed my car with the dealership in-house financing. My first application at a large bank was denied. I began looking into my other options, and I found that there were more lenders for new businesses than I realized. I applied at local credit unions, local banks, and other business lending services. I was able to secure more funding than I even expected, and my credit is just average. I created this blog to help other new business owners realize that there is funding out there. You just have to find it and apply! Don't give up on your dream.