Loan Funding Fee – Closing Costs Explained

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• LOAN FUNDING FEE CLOSING COSTS EXPLAINED

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• A VA loan offers several benefits to buyers. Two
  major benefits are no down payment and reduced
  closing fees.

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• While buyers don't get to skip the closing costs
  completely, there are limits on the amount of
  closing costs that can be assessed to buyers on a
  VA loan.

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• The following information will help buyers
  understand how much they can expect to pay in
  costs on a VA home loan.

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• HOW MUCH CAN BORROWERS EXPECT TO PAY IN CLOSING
  COSTS?

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• Closing costs on a mortgage loan range from 2-5
  of the total purchase price.

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• These closing costs cannot be rolled into the VA
  loan buyers will need to write a check at
  closing to cover these costs.

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• This can come as a huge shock to buyers who are
  not expecting to pay any money at the mortgage
  closing appointment.

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• VA loans are especially attractive to those
  borrowers who don't have a lot of cash assets and
  are unable to put a lot of money down on a
  mortgage loan.

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• As a result, these closing costs may present a
  hardship for borrowers. However, VA loans offer
  buyers a way to purchase a home without writing
  a large check to cover closing costs.

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• WHAT ARE THE LIMITS FOR CLOSING COSTS ON A VA
  LOAN?

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• Lenders typically charge a 1 origination fee on
  a VA loan this fee is paid by the buyer at the
  time of closing.

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• Lenders can then tack on costs to the loan, such
  as

• Appraisal fees

• Costs for credit reports

• Tax and insurance escrow fees

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• Lenders are barred from charging closing fees
  and underwriting fees.

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• They are also prohibited from charging a mortgage
  broker's fee or any attorney fees (except
  attorney fees for title work).

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• VA loans may also not be assessed pre-payment
  penalties and fees, which is another benefit for
  veterans.

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• ARE OTHER FEES ASSESSED AT CLOSING ON A VA LOAN?

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• The VA charges a VA funding fee that can be
  rolled into the mortgage and factored into the
  monthly payments on the loan.

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• This funding fee is slightly different for active
  duty military personnel and veterans, as
  compared to funding fees for National Guard and
  Reserve personnel and veterans.

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• Active duty members and veterans can expect to
  pay a funding fee of 2.15 on a first mortgage
  with no down payment, or 3.3 on a subsequent
  mortgage with no down payment.

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• Guardsmen and Reservists and veterans can expect
  to pay 2.4 on a first mortgage with no down
  payment, or 3.3 on a subsequent mortgage with
  no down payment.

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• If a veteran chooses to make a down payment on
  the loan, the funding fee is reduced slightly
  depending upon the amount of the down payment.

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• With a VA home loan, the VA is not providing the
  funding to purchase the home. The VA is simply
  guaranteeing the loan in the event the borrower
  is unable to pay the loan back.

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• Veterans and recipients of VA home loans can
  choose from a long list of lenders.

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• It is important to research thoroughly potential
  lendersand make the right choice based on
  overall costs, loan origination fees and interest
  rates, and other loan terms.

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• Borrowers should also choose a lender with a
  solid reputation and a long history of assisting
  veterans and military personnel with obtaining
  home loans.

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• Mortgage Originator Jimmy Vercellino,
  specializing in VA loans, helps veterans use
  their VA loan benefit to their greatest
  advantage.  

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• For more details call 480-351-5904.
• Visit the site at http//bit.ly/vaclosingcosts

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VA LOANS FOR VETS 7702 E. Doubletree Ranch Road,
Suite 220 Scottsdale, AZ 85258 Phone (480)
351-5904 Email jimmyv_at_fcbmtg.com
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