What Is a VA Loan Funding Fee?
When you’re comparing VA mortgage rates in Dallas, you need to look at both the interest rates and the fees associated with each loan. No matter what type of mortgage you’re applying for, you’ll always have to pay additional costs before you get the loan. The types of fees you’ll encounter with a VA loan are different than the ones associated with traditional mortgages. The most noticeable fee is the VA loan funding fee.
What Is the VA Loan Funding Fee, Exactly?
The VA loan funding fee that helps pay for the government’s guarantee on the mortgage. For first-time VA borrowers, that fee comes to 2.3 percent of the total loan amount. If you’ve used a VA loan to buy a home or to refinance a mortgage in the past, the fee increases to 3.6 percent.
The only way to lower the funding fee for every VA loan you take out is to put a down payment on the property. This helps off-set the amount of money the VA has to guarantee. In turn, they’ll pass those savings onto you by lowering the fee.
Does It Affect the VA Mortgage Rates in Dallas?
The VA loan funding fee is a set percent and happens for every loan no matter how much you’re borrowing. It’s independent of the interest rate and doesn’t influence the other fees associated with the loan or the extra costs lenders may charge.
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