Sep 29, 2011
Courtesy KCM.
Effective October 1, 2011, the costs associated with getting a VA mortgage are going DOWN!
An overview: VA mortgages are bundled, securitized and sold in the secondary market with the backing of the Federal Government. In order to insure these mortgages, the government charges a type of insurance premium, called a VA Funding Fee, which is typically added to the loan amount (thereby financed).
Remember, too, that the VA (subject to some restrictions) will insure loans up to 100% of the purchase price for the home.
What is happening next week? On loans that close effective October 1, that Funding Fee is being reduced. Because it is typical that the fee is financed into the loan, the VA is effectively lowering the monthly cost (because the loan amount is lower) AND the amount that will be paid back when the home is sold (again, because the loan amount is lower). It’s a win/win for the verteran.
Make it a great day Trianlge!
~Rach
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