Mortgage Matters :: Positive changes for VA loans

Mortgage Matters :: Positive changes for VA loans

News You Can Use

VA loans closing after October 1st  will have reduced funding fees.  In a time where FHA and USDA mortgage insurance has increased, it’s positive news that VA is reducing their costs to veterans.

For first time users the funding fee that is rolled into the loan is reducing by almost 50%.  It will be 1.40% for borrowers putting less than 5% down.  Many VA buyers opt to forgo a down payment so this is great news for the majority of VA borrowers.  For first time users putting at least 5% but less than 10% down, the funding fee has been reduced to .75% and then for borrowers with >10% down payment it’s only .50%

Veterans with a second or subsequent use and <5% down payment will have a reduced funding fee of 2.80% and then it reduces further to 2.15% next October.   Borrowers with more than 5% down payment will have the same funding fee as first time users.

These funding fees are for veterans who are or were active duty service members.  For borrowers who served in the Reserves or National Guard, the funding fees are .25% higher in most cases.  Also there is no funding fee for veterans who received a 10% or more disability rating when leaving the military.

It’s also worth noting that veterans may be eligible for a first time home buyer exemption for NC Housing’s First Home Mortgage and receive rates as low as the current 3.25% for a 30 year fixed mortgage.

It’s understandable to have questions about VA loans since they aren’t common in the Charlotte market.  However, this program is worthy of consideration so ask any questions you have, it’s an honor to serve those who serve.

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Rebecca Richardson is a Charlotte mortgage banker who excels at helping clients choose the appropriate mortgage strategy and enjoys demystifying the financial process on her blog at rebeccarichardsonmortgage.com.   She publishes a weekly “Mortgage Matters” e-newsletter and can be reached at  704.488.8883 or by email.