Fees Can Drop?

September 20th, 2011

For VA loans closed on or after October 1, 2011, the VA Funding Fee (which is the VA equivalent of mortgage insurance) is dropping. This change is due to passage of Public Law 112-26, Restoring GI Bill Fairness Act of 2011. It is surprising to see fees actually drop! The VA Funding Fee is a percentage based on the sales price, can be paid in cash or financed into the new loan amount; but is almost always financed. The breakdown of what the VA Funding Fees have been, and will be, are below:

I. First Time Use Of VA Eligibility For Veterans:

Down payment:
Less than 5%:
– October 1, 2004 until October 1, 2011 is 2.15%
– On or after October 1, 2011 is 1.40%

At least 5% down but less than 10%:
– Before October 1, 2011 is 1.50%
– On or after October 1, 2011 is 0.75%

10% down or more:
– Before October 1, 2011 is 1.25%
– On or after October 1, 2011 is 0.50%

II. First Time Use Of VA Eligibility For Reservist/National Guard:

Down payment:
Less than 5%:
– October 1, 2004 until October 1, 2011 is 2.40%
– On or after October 1, 2011 is 1.65%

At least 5% down but less than 10%:
– Before October 1, 2011 is 1.75%
– On or after October 1, 2011 is 1.00%

10% down or more:
– Before October 1, 2011 is 1.50%
– On or after October 1, 2011 is 0.75%

III. Second And Subsequent Use Of VA Eligibility For Veterans:

Down payment:
Less than 5%:
– until October 1, 2011 is 3.30%
– October 1, 2011 thru October 1, 2012 is 2.80%
– October 1, 2012 thru October 1, 2013 is 2.15%
– On or after October 1, 2013 is 1.25%

At least 5% but less than 10% down:
– Before October 1, 2011 is 1.50%
– On or after October 1, 2011 10% or more is 0.75%

– Before October 1, 2011 is 1.25%
– On or after October 1, 2011 is 0.50%

IV. Second And Subsequent Use Of VA Eligibility For Reservist/National Guard:

Down payment:
Less than 5%:
– until October 1, 2011 is 3.30%
– October 1, 2011 thru October 1, 2012 is 2.80%
– October 1, 2012 thru October 1, 2013 is 2.15%
– On or after October 1, 2013 is 1.25%

At least 5% but less than 10% down:
– Before October 1, 2011 is 1.75%
– On or after October 1, 2011 10% or more is 1.00%

– Before October 1, 2011 is 1.50%
– On or after October 1, 2011 is 0.75%

V. Refinancing Loans (this stays the same):
– Before October 1, 2011 is 0.50%
– On or after October 1, 2011 is 0.50%

Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.

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