{"id":12536,"date":"2010-03-28T11:24:45","date_gmt":"2010-03-28T17:24:45","guid":{"rendered":"http:\/\/template.lenderama.com\/?p=649"},"modified":"2010-03-28T11:24:45","modified_gmt":"2010-03-28T17:24:45","slug":"why-do-i-need-to-pay-a-va-funding-fee","status":"publish","type":"post","link":"https:\/\/dev203k.orbitwebx.com\/dev203k\/why-do-i-need-to-pay-a-va-funding-fee\/","title":{"rendered":"Why Do I Need To Pay A VA Funding Fee?"},"content":{"rendered":"

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The VA Funding Fee is an essential component of the VA home loan program<\/a>, and is a requirement of any Veteran taking advantage of this zero down payment government loan program.<\/p>\n

This fee ranges from 1.25% to 3.3% of the loan amount, depending upon the circumstances.<\/p>\n

On a $150,000 loan that\u2019s an additional $1,875 to almost $5,000 in cost just for the benefit of using the VA home loan.<\/p>\n

The good news is that the VA allows borrowers to finance this cost into the home loan without having to include it as part of the closing costs.<\/p>\n

For buyers using their VA loan guarantee for the first time on a zero down loan, the Funding Fee <\/a>would be 2.15%.<\/p>\n

For example, on a $15,000 loan amount, the VA Funding Fee would total $3,225, which would increase the monthly mortgage payment by $18 if it were financed into the new loan.<\/p>\n

So basically, the incremental increase to a monthly payment is not very much if you choose to finance the Funding Fee.<\/p>\n

Historical Trivia: <\/strong><\/p>\n

Under VA’s founding law in 1944 there was no Funding Fee; the guaranty VA offered lenders was limited to 50 percent of the loan, not to exceed $2,000; loans were limited to a maximum 20 years, and the interest rate was capped at 4 percent.<\/p>\n

The VA loan was originally designed to be readjustment aid to returning veterans from WWII and they had 2 years from the war\u2019s official end before their eligibility expired. The program was meant to help them catch up for the lost years they sacrificed.<\/p>\n

However, the program has obviously evolved to a long term housing benefit for veterans.<\/p>\n

The first Funding Fee was \u00bd% and was enacted in 1966 for the sole purpose of building a reserve fund for defaults. This remained in place only until 1970. The Funding Fee of \u00bd% was re-instituted in 1982 and has been in place ever since.<\/p><\/blockquote>\n

The Amount Of Funding Fee A Borrower Pays Depends On:<\/strong><\/p>\n