Recently the Department of Veteran Affairs announced some positive news in regard VA loan funding fees. Effective 1 October, 2011, VA funding fees will be decreasing across the board, with changes corresponding to the down payment ranges on the new VA loan taken.
Currently, the VA loan funding fee for first-time use, with a 5% or less down payment is 2.14% of the loan amount for active duty veterans and 2.40% of the loan amount for Guard and Reserve veterans who qualify.
However, as of October 1st, the rates will be lowered to 1.65% of the loan amount for those making a down payment of 5% or less and 1.40% or less of the loan amount for those making a down payment of more than 5%.
In addition, currently VA loans with a subsequent use currently have a funding fee of 3.30% for both active duty and Guard/Reserve members. However, as of October 1, 2011, the fees for those making a down payment of 5% or less will drop to 2.80% for subsequent use. In addition, the fees for those making a down payment of more than 5% will drop to 2.55% for subsequent use.
Furthermore, on October 1, 2012 there will be yet another drop across the board in the funding fee for subsequent use to 2.15 for active duty, Guard and Reserve vets, regardless of down payment.
Finally, on October 1, 2013 the VA loan funding fee for first time and subsequent use will drop down to 1.25% across the board for all borrowers, regardless of down payment percentage.
For some VA loans, the funding fees will not change at all however. The funding fee for VA loan assumptions and Interest Rate Reduction Refinancing loans or IRRRLs will remain at .50%, for all borrowers.
In addition, VA loan funding fees are always waived for veterans receiving disability benefits from the VA and this will continue to be in effect still as well.
Across the board these are all positive changes, as the VA loan is already perhaps the best loan option available for veterans and active duty service men and women. However, the new reduction in funding fees will make these loans even more affordable across the board. As always, these numbers are subject to changes in the future and if any changes do occur, we will of course provide updates.
For more information on current home loan programs and options for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com
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