Before you start looking for homes for sale in the local area or scheduling showings, it’s important that you start mortgage shopping (if you’re not paying cash) for your future home purchase. If you have served in the U.S. Military, or if you are the surviving spouse of a service member, you may be eligible for a VA Loan.
What is a VA Mortgage Loan?
A VA mortgage loan is a home loan that is available to qualified military members, including veterans, active-duty service members and some eligible surviving spouses. The benefit of applying for a VA loan is that down payments are not required in order to close on the home, which can make it easier for military members and veterans to secure housing. These VA home loans also typically have more favorable rates than conventional or FHA mortgages.
The VA Funding Fee: What You Need to Know
The VA funding fee is a financial component associated with Department of Veterans Affairs (VA) home loans. This fee is designed to offset the costs incurred by the government in providing VA-backed mortgages, ensuring the sustainability of the program for future veterans. The funding fee is a one-time payment required from most VA loan borrowers and is calculated based on factors such as the borrower’s military service, down payment amount, and whether it’s their first or subsequent use of the VA loan benefit. While the fee contributes to the overall stability of the VA loan program, it’s essential for prospective homebuyers to understand and plan for this cost when considering the financing options available to them.
While you may not have to pay a down payment, you may have to pay the VA funding fee. The VA funding fee is a one-time payment that must be paid by the loan applicant either at closing or added to the mortgage.
There are some VA funding fee exemptions, such as:
• Applicants who are receiving compensation due to a service-related injury.
• Applicants who are eligible for service-related injury compensation but are receiving active duty pay or retirement pay instead.
• Applicants who are surviving spouses who are receiving Dependency and
Indemnity Compensation.
There may be other exemptions, so it is important to work closely with your mortgage lender to verify your requirements to pay the VA funding fee. Those who have to pay the funding fee will pay a percentage based on the total amount of their loan.
VA Funding Fee Chart
VA Mortgage Loan Closing Costs
In some cases, the seller will pay the buyer’s closing costs. The seller contributions towards the buyer’s closing costs for a VA Loan has a maximum amount allowed is 4.0% of the purchase price. If you are required to pay closing costs as part of your real estate transaction, they will be determined by the mortgage lender and the title company.
If you qualify for a VA loan, then it’s important to partner with a local Realtor® who has experience working with veterans, active-duty service members and family members.
For inquiries about real estate or to initiate a discussion about how I can be of assistance, feel free to reach out to Shannon Lindstrom, an experienced Realtor® with RE/MAX Results. Shannon holds certifications as a Military Residential Specialist, Military Relocation Professional Designation, and Veterans Certified Real Estate Agent, serving to the Twin Cities/MN area. Contact Shannon at 612-616-9714 or visit www.ShannonLindstromRealtor.com for more information.
Shannon Lindstrom, Realtor®, CDRE®, CREDS, CRS, GREEN, MILRES, MRP, VCA
RE/MAX Results
7373 Kirkwood Court No, Ste. 300
Maple Grove, MN 55369
Direct: 612-616-9714
[email protected]
[email protected]
www.ShannonLindstromRealtor.com
www.ShannonLindstrom.info
www.TwinCitiesMilitaryVeteransRealtor.com
www.MNDivorceRealEstateExpert.com
