Here is a handy VA mortgage calculator to help you estimate your monthly payment!
If you should have any questions about calculating your payment, feel free to call us at any time (360) 250-3400, and we will assist you!
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Funding Fee Rates for Loans Closed on or After April 7, 2023
The VA reduced the funding fee for certain VA loans making them a better value than ever. Use the chart below to know what percent funding fee your loan will require.
| Type of Loan | Down Payment | First Time Use Percentage | Subsequent Use Percentage |
|---|---|---|---|
| Purchase / Construction Loans | None | 2.15% | 3.3% |
| Purchase / Construction Loans | 5% | 1.5% | 1.5% |
| Purchase / Construction Loans | 10% | 1.25% | 1.25% |
| VA Cash Out Refinance | N/A | 2.15% | 3.3% |
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VA Funding Fee Exemptions & Disability Exemptions:
While the VA funding fee is required for most borrowers, certain veterans and other eligible individuals may be exempt. The VA grants exemptions for the following categories of borrowers:
- Active duty veterans eligible for compensation but not receiving it
- Eligible surviving spouses of deceased veterans
- Purple Heart recipients
- Veterans eligible for disability compensation but receiving retirement pay instead
- Veterans with pre-discharge exam or review-based compensation eligibility
- Veterans with service-connected disability compensation
To assess funding fee exemptions, lenders like us usually examine the Certificate of Eligibility (COE).
In cases where veterans receive retirement pay rather than VA compensation, we may require the original disability rating notification and financial documents reflecting the retirement income.
Keep in mind that only the VA can make the final decision on funding fee exemptions, it’s not up to us.
Paying Your VA Funding Fee
Mortgage lenders don’t have control over who is required to pay the VA funding fee or the specific amount. Your Certificate of Eligibility (COE) typically indicates whether you need to pay the fee.
If you’re required to pay the VA funding fee, it can be settled at the closing stage. Your lender is responsible for collecting the fee and sending it directly to the VA through an automated system.
VA loan borrowers have several payment options for the VA funding fee:
- Finance the fee over the loan’s lifetime (most common)
- Pay the fee out-of-pocket at closing
- Request the seller to pay the fee on their behalf
In most cases, borrowers choose to finance the VA funding fee into the entire loan amount, allowing them to spread the cost over the loan’s term. This approach helps to manage the upfront cost associated with purchasing a property.
Other VA Funding Fee Scenarios
In some cases, VA loan borrowers might find themselves in uncommon situations that affect the funding fee. For instance, when two veterans with VA loan entitlement co-borrow, the funding fee may differ based on who contributes to VA loan entitlement.
Additionally, VA loan assumptions come with a 0.5% funding fee, but if you get to keep a lower interest rate on the loan overall, this is still very attractive.
If you have further questions about VA loan closing costs, including the funding fee, reach out to us, and we’ll help you navigate the complexities of the VA loan process.