The Department of Vertans Affairs announced on September 8, 2011, via VA Circular 26-11-12, that the Funding Fee will drop lower for VA loans closed on or after October 1, 2011. While we rarely get good news on the lending front these days, it is nice when something comes out that will actually save home buyers money.
New VA Funding Fee Chart
Below is a VA Funding Fee Chart comparing the old (higher) Funding Fee percentages to the new (loan closed on or after October 1, 2011).
These changes will save thousands for most Veterans using VA financing to purchase homes in Orange County, where prices tend to be on the "high end" compared to most of the country. As an example, lets say Martha is purchasing a home in Irvine, CA for $600,000 using VA financing with zero down payment. If this is Martha's first time using her VA Eligibility, she would have 2.15% of the purchase price added to her loan. $600,000 * 2.15% is a $12,900 Funding Fee, resulting in a total VA loan of $612,900. But with the new lower percentages, Martha would only have 1.4%, or $8,400 added to her VA loan, a savings of $4,500. Considering that VA allows Zero Down financing in Orange County up to $700,000 and has no Monthly Mortgage Insurance like othwer types of "high loan to value" financing, it is somewhat surprising the Funding Fee was actually lowered. But we'll take it.
Of course the first step with VA financing is always to get PreApproved!
Authored by Tim Storm, an Orange County, CA VA Loan Loan Officer MLO 223456– Please contact my office at Home Point Financial for more information about an Orange County, CA Jumbo Mortgage. 949-829-1846. www.OCHomeBuyerLoans.com
Contact us for your Orange County VA Loan:
949-829-1846 | tstorm (at) ochomebuyerloans.com