Va Funding Fee is Dropping! October 1, 2011
Congress finally did something I think could help housing! With the passage of H.R. 1383, the Restoring GI Bill Fairness Act of 2011, mortgage loans for Veterans will be a little cheaper. The VA Funding Fees will be reduced effective October 1st, which should help some Veteran’s who are struggling in other areas of the Country where home prices are dropping.
The Funding Fee is essentially the VA’s PMI. It is a substitute for mortgage insurance on a Veteran mortgage loan and is charged at loan closing. It can be paid through seller contributions, lender credits, or added back to the Veterans loan amount. Since most Veteran home loans are funded with no money invested for a downpayment, the Funding Fee on those loans will be lowered from 2.15% to 1.4%. This reduction is for those Veteran’s that are first-time users of their entitlement and who are on active duty or honorably discharged.
Funding Fees for subsequent use of entitlement will drop from 3.3% to 2.8% in October, with further reductions to 2.15% in 2012 and 1.25% in 2013. Those Veterans who do make 5% or 10% down payments will see their funding fees drop to as low as a half of a percent. In addition, the National Guard members and Reservists will also see decreases in their VA PMI rates.
Loans for Veterans are one of the last true remaining “no money down” mortgage loan programs in the marketplace. FHA and USDA are now charging monthly fees in addition the the money collected upfront – so this reduction in the funding fee for Veterans should provide a significant money saving benefit to returning service members.
Congress is also hoping that since mortgage rates are so very low, this move will motivate some Veterans who have been waiting to purchase a home. The amenities you can get on a Home in San Antonio, that is near the base might surprise you! This make home ownership that much more affordable!
We work with the TOP Lenders in San Antonio – and we encourage you to let us point you towards the folks who can make this happen! Check out the Special Offers we have for the Military!
Tags: va mortgage loans, va mortgage pmi, veteran home loans, veteran mortgage loans