GOOD NEWS FOR VETERANS. VA LOAN COSTS ARE DROPPING SOON!

 GOOD NEWS FOR VETERANS.  VA LOAN COSTS ARE DROPPING SOON!

 The Veterans Administration has just announced that the VA Funding Fee required for VA Home Loans, will soon be reduced for most VA home purchase loans.  Effective October 1, 2011, the one-time cost will be reduced by approximately 35%.  This amounts to an up-front savings of $2,250 on a purchase price of $300,000. 

 The VA Funding Fee is paid directly to the Department of Veteran's Affairs for the VA Guarantee, which eliminates the need for monthly PMI or Mortgage Insurance. The funding fee does not need to be paid separately and is typically rolled into the loan.  Veterans are not required to pay a down payment and they can finance the VA Funding Fee as well. The VA loan, when compared to an FHA loan for the same $300,000 purchase price, will result in a payment savings of about $280 per month, or $3,360 per year.

 

Until now, the VA Funding Fee for the first time use of a VA Guarantee has been 2.15% of the base loan amount.  The new fee will drop to 1.40% with a savings of .75% of the loan amount.  Since the VA Loan Benefit can be used more than one time if the prior loan has been paid in full, the subsequent use of the benefit will drop from 3.3% to 2.80% after October 1, 2011.  On October 1, 2012, that fee will drop again to 2.15% and again on October 1, 2013 to 1.25%. Those “second use” loans have always been higher due to the additional use of the benefit.  Reservist’s pay slightly higher fees than Veterans and Active Duty personnel.  The fee on Interest Rate Reduction Refinances will remain the same.  Call me for more details.

 

Some Veterans and surviving spouses of those who died in the service, or from service related disabilities may be exempt from paying the VA Funding Fee.  If you are a Veteran getting disability compensation for service-related medical issues, or are entitled to get compensation if you aren’t drawing retirement pay, you are exempt from paying the VA funding fee.  The VA will always have the last word on who is exempt.

FOR MORE INFORMATION ON VA HOME LOANS AND OTHER LOAN PROGRAMS, PLEASE CONTACT DOUG BULLWINKEL AT (800) 636-8910

LOOK FOR MY NEW WEBSITE COMING SOON: www.VALender.com

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NOTE: Doug Bullwinkel is a licensed California Mortgage Loan OriginatorNMLS #281609 for Vitek Mortgage with over 30 years in the Real Estate and Mortgage Industry. He specializes in Niche loan programs including the CalPERM-CalPERS Member Program, CalSTRS Home Loan Program for Teachers, VA and CalVet for Veterans, FHA, USDA, FNMA Homepath, CalHFA, CHF Grants and more. His website is LenderSolutions.com. He can be reached at (800) 636-8910 for more information