VA Funding Fee And Closing Costs
The VA funding fee is a one-time payment that the Veteran, service member, or survivor pays on a VA-backed or VA direct home loan.
If you’re using a VA home loan to buy, build, improve, or repair a home or to refinance a mortgage, you’ll need to pay the VA funding fee unless you meet certain requirements.
You won’t have to pay a VA funding fee if any of the below descriptions is true.
You can pay the VA funding fee in either of these ways:
How much you pay will depend on the loan type and other factors, but the typical fee is 2.3% of the loan amount. This may decrease depending on the size of your down payment.
Note: Your lender will also charge interest on the loan in addition to closing fees. Please be sure to talk to your lender about any loan costs that may be added to your loan amount.
Your home loan lender will determine these details of your loan:
These rates may vary from lender to lender.
You should know that adding the VA funding fee and other loan costs to your loan could lead to you owing more money than the fair market value of the home.
Other closing costs may include:
Note: The VA requires that a seller can’t pay more than 4% of the total home loan in seller’s concessions, but this rule only covers some closing costs, including the VA funding fee. The rule doesn’t cover loan discount points.
Last updated September 23, 2020