What You Should Know About VA Loan Funding Fees | VALoans.com

Knowing the VA loan funding fee process is very important?if you are new to the VA home loan system, how do you know the funding fee has been correctly calculated and applied?

It?s true that you may have little to worry about when dealing with a reputable participating VA lender, but human error, miscalculation and other factors are always possible. Knowing how the process works helps the buyer avoid surprises, miscalculations, and wasted time.

VA home loan funding fees are listed on a funding fee table the lender uses as a reference. The amount of the fee can vary depending on the borrower?s status as an active duty military member, whether the applicant serves in the Guard of Reserve, and whether the borrower is exempt or not exempt from paying the fee at all. The type of loan is also a factor. Are you applying for a construction loan, existing construction, or refinancing a current loan? The amount may vary based on these factors.

There are also questions the lender must answer?all of which can potentially affect the VA loan funding fee amount. Is the VA loan applicant making a down payment? The amount of the VA funding fee may be reduced based on the amount of that down payment.

Does the purchase price of the property exceed the VA appraised value? If so, the veteran must pay the difference between the purchase price and the value of the home ?in cash? according to VA requirements, the borrower can?t finance that amount as part of the VA mortgage. That affects the amount of the VA funding fee as the loan amount itself is different than the sale price.

When it?s time to calculate the fee, does the borrower wish to finance the it as part of the loan amount? Some do and some do not?but if you choose to have the funding fee added to your VA mortgage loan, the lender must calculate the VA fee without adding the fee amount into the loan. Doing so would inflate your fee artificially.

Sounds complicated, doesn?t it? It?s one reason why it?s a good idea to understand your VA loan funding fee?you can double check the amount to make sure the fee is the proper amount and has been calculated properly.

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Source: http://www.vanewsblog.com/2012/03/what-you-should-know-about-va-loan-funding-fees/

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