Understanding VA Funding Fees When Getting a VA Mortgage

Oftentimes, Veteran’s and their families are confused about how a VA funding fee works for them. Not every lender takes the time to explain these fees and how they impact your loan. Every VA loan has a funding fee associated with it, the amount of the fee varies depending on a number of factors.

Understanding VA loans

The VA loan program started back in 1944 and has been modified several times since. The most significant modification occurred in 1992 when the program stopped requiring that loans be granted only to active military personnel and was expanded to include reservists and National Guard members who had or are serving for six years or more. For these personnel, funding fees were slightly higher but still made getting a home loan more feasible. It is important that veterans are aware of the fact that the loans are not made by the VA, they are guaranteed by the VA. In very limited cases, there may be direct loans, but these are typically in specialized situations.

Eligibility certificates

Every veterans approved loan requires a certificate of eligibility which may be obtained by the person applying for the loan or may be requested on their behalf. Core Mortgage Financial takes great pride in being able to offer this service to service members and their families. It’s just one more thing we are able to offer our clients. Those who are eligible include active military personnel, retired military personell and family members of service persons who lost their lives serving the country.

The 2021 VA funding fee

Each loan that is guaranteed or made by the VA requires a funding fee unless the certificate of eligibility states otherwise. The conditions that would not require a funding fee are in cases where a family member is entitled to benefits because a veteran lost their lives in service or as a result of service-related disabilities. In addition, members who are collecting compensation for service-related disabilities are exempt from paying a funding fee. When purchasing a home, the funding fee is tied to the amount of down payment that the buyer is making.

First Time Users:

• No down payment: 2.3 percent funding fee
• 5 percent to 9.99 percent down payment: 1.76 percent funding fee
• 10 percent or more down payment: 1.4 percent funding fee

For those who have used their eligibility before, the funding fee will vary from 1.4 percent for those with 10 percent or more down while those who are not making a down payment will pay a 3.6 percent fee.

Remember, Core Mortgage Financial will request your certificate of eligibility and your VA funding fee will be quoted on your certificate of eligibility. Contact us today and let us help you with the VA loan process.