VA Loan Eligibility
Hi, Mortgage Mack here.
So, it’s been awhile since I’ve posted on my video blog and I had a couple of inquiries recently specific to VA loan.
VA Loan Eligibility – The Seller can Pay ALL the Closing Costs on Behalf of the Veteran
As many of you know, I’ve been a mortgage banker for a long time and I’ve done quite a few VA loans in my career. And the inquiry, the question was whether or not the seller could pay for the funding fee on a purchase transaction to benefit the VA buyer. And the answer to that question is yes. And actually, the seller could pay all the closing costs and including the funding fee. And so, a veteran could move in for literally zero dollars in that type of scenario.
So, you know, veterans administration has a fantastic loan program for veterans that qualify. And to know whether or not you qualify, the veteran can request a certificate of eligibility and I’ll leave a link here to where they would go to request that in the VA portal using their DD 214 or we can do it for you.
VA Loan Eligibility – Veterans Receiving Service Connected Disability maybe exempt from the VA Funding Fee
So, a veteran’s home loan is zero down and it does have what we call a funding fee. And it doesn’t have monthly mortgage insurance like many conventional loans do or FHA loans. And it has a funding fee. For the first time usage, it’s 2.15%. And for subsequent use, it’s 3.3. So, a veteran doesn’t usually pay the funding fee at closing, it is normally added to the loan unless of course the veteran has a certain amount of disability. When I request the certificate of eligibility and it tells me that the veteran is not required to pay the funding fee, then there’s no funding fee.
The VA Home Loan is a GREAT Benefit to those Who’ve Served their Country
So, it really is just a great program. If you’re a veteran and you have served your country and you think you might wanna buy a house call, you know, give us a call. Go to mortgagemack.com and apply and let us look at your scenario and see if we can help you.
The loan limit who for 0 down is up to the maximum conforming limit for our area, which is 453,100. And that is the absolute max. So, if you have a funding fee beyond that, the funding fee would have to be paid in cash and/or by the seller. But a lot of people don’t know that you can go up to a million dollars on VA loans as far as the loan amount is concerned. However, to do that, the veteran would put in essence what is 25% down for every dollar of above the 453,100 plus pay the funding fee in cash. So, I’ve actually had a scenario in my career where the amount borrowed was beyond the scope of the loan limit and then veteran did have to pay the funding fee at closing, but that was all. And that was all he had to pay plus whatever closing costs that weren’t paid by the seller.
And you know, there’s a lot of advertising out there that would lead you to believe that that is indeed the case. I mean, the Veterans’ Administration has recently come down pretty hard on some of those lenders that advertise on TV. And one of the things that they say is that they say no appraisal required for a VA we finance. And you know, veterans’ administration doesn’t require an appraisal for an interest rate reduction loan for a veteran. So, that’s kind of misleading and/or what I would term intellectually dishonest.
So, I encourage you that if you’re a vet and interested in inquiring about the opportunities for you as a veteran for a zero down loan or even to refinance your current VA loan, I will encourage you that if your current VA loan and the interest rate is above say— I would say today’s 5%-5.5% and it might be worth it, but just give us a call and we’ll be glad to help.
Thanks a lot. I hope you have a great day. I hope you find this helpful. I’d love to see your comments and/or questions below and I’d be happy to answer them for you.
Have a great day. Take care.