The cost of the VA funding fees depends on the amount of their loan and other factors.
For all loans, the VA funding fee will be based on the type of loan a borrower takes, and the total amount of their loan.
The funding fee is calculated as a percentage of the borrower’s total loan amount.
Depending on their loan type, the fee varies on:
If it’s the first time or a subsequent time, that the borrower is using a VA- loan, and also depends on their down payment amount
In addition to closing fees, the borrower’s lender will also charge interest on the loan.
So it is important for the borrower to talk to their lender about any loan costs that may be added to their loan amount.
Borrowers can review the VA funding fee rate charts to determine the amount they’ll need to pay.
The Down payment and VA funding fee amounts are expressed as a percentage of the total loan amount.
For instance – If a borrower is using a VA-backed loan for the first time, and they’re buying a home for $200,000 and making a down payment of 5% ie. $10,000.
The borrower pays a VA funding fee of 1.65% of the balance amount which is $190,000. The funding fee is not applicable to the purchase price of the home but only to the loan amount.