Thank you to all who have served and continue to serve in the United States armed forces. One of the benefits for our veterans, is in the area of home ownership. VA financing is a great way for veterans (even those still enlisted) to purchase a home with no money down. In some cases, with no money down and closing costs being paid by seller.
VA does require a funding fee. This funding fee is similar to FHA’s upfront mortgage insurance premium, although VA doesn’t require monthly mortgage insurance. The funding fee is part of an insurance policy for the lender (VA insures) that in the event the veteran defaults on the loan and goes through the process of a foreclosure–the lender would be ensured up to 25% of the total loan amount.
First time use vs. second and subsequent use of VA eligibility
Although VA financing does not require a down payment, if a veteran makes a down payment of 5% or more the funding fee is reduced from 2.15% to 1.50% for veteran/active duty. The funding fee can be financed, so it does not need to be paid at closing. For second and subsequent use of VA eligibility, the funding fee increases from 2.15% to 3.30%.
On July 4, 1776, the thirteen colonies claimed their independence from England, an event which eventually led to the formation of the United States.
As we celebrate our nations 237th. birthday . . . let us remember the men and women of the armed forces who put their lives on the line to protect our freedoms. America is still the greatest nation in the world . . . thank a veteran today AND remind them of one of the best benefits they have . . . VA financing with no money down.