Some Good News for Veterans!

It appears that (subsequent to my writing of this blog yesterday) that the House has passed a bill which the President is expected to sign which extends the current Funding Fees until November 17th. Despite the fact that the VA’s own website still states that the change is expected October 1st, that information seems to be outdated. The good news is that the change is still, by all extimations coming. It just looks like we will be waiting another six weeks! – Dean Hartman

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Effective October 1  November 17, 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 November 17, 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 veteran.

If you have any questions about purchasing a home with a VA loan or if you already have one and are considering a refinance of it because of the low interest rates, reach out to your favorite mortgage professional and explore the possibilities. There has never been a better time!