Like any other home loan, the VA Streamline Refinance Program have
fees to close the loan. When dealing with these costs, a VA Funding Fee is usually a part of it. But what is it all about?
What is its purpose?
In its simplest explanation, a VA Funding Fee is an amount that is paid to the Department of Veterans Affairs to cover losses from other VA loans that go into default as well as making sure that future veterans would still enjoy this benefit.
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How much is the VA Funding Fee?
The amount depends on different factors, including the borrower’s nature of service and how much is the down payment. It would also vary if it’s the borrower’s first time to use his VA home loan benefit or not. A regular military personnel has a different percentage amount compared to a reserve or a national guard.
| Regular Military Personnel |
| Down payment |
Funding Fee (1st use) |
Funding Fee (subsequent use) |
| None |
2.15 percent |
3.3 percent |
| 5-10 percent |
1.5 percent |
1.5 percent |
| 10 percent and up |
1.25 percent |
1.25 percent |
| Reserve & National Guard Personnel |
| Down payment |
Funding Fee (1st use) |
Funding Fee (subsequent use) |
| None |
2.4 percent |
3.3 percent |
| 5-10 percent |
1.75 percent |
1.75 percent |
| 10 percent and up |
1.5 percent |
1.5 percent |
Are there any exemptions?
The VA Funding Fee could be waived under specific
circumstances. For veterans who are receiving disability compensation for a service-connected disability, the fee could be waived. Other than that, an eligible spouse of a fallen veteran who died in the line of duty or due to a service-connected disability can also be exempted from paying.
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What if I can’t pay for this fee?
Together with other
closing costs, it can be rolled into the monthly mortgage. Therefore, borrowers don’t have to worry if they couldn’t cover these costs upfront. If you can pay the costs when closing a loan, then that’s good. But if otherwise, this an option that a borrower can choose.
Despite having to pay this fee along with other costs, it’s still easy to say that veterans have one of the best home loan benefits to their advantage. This is, after all, the government’s way of showing gratitude to all the brave heroes that serve to protect the country.
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