Effective October 1, 2011, the costs associated with getting a VA mortgage are going DOWN!
An overview: a VA mortgages is one which has been 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 which means it is financed in the loan.
One of the advantages of a VA loan (subject to some restrictions) is that the veteran can borrow up to 100% of the purchase price for the home. In other words, no down payment is required.
The changed include with loans which close after October 1, the Funding Fee is being reduced. Because the funding fee is typically financed into the loan, the VA is effectively lowering the monthly payment because the loan amount is lower AND the loan pay off is lower. It’s a win/win for the verteran.
If you have any questions about purchasing a home with a VA loan contact me. I have great loan officers available. There has never been a better time!