If a veteran can put down 5% on a home purchase and does not have a service-connected disability, going through the VA (Department of Veterans Affairs) is typically their best lending option. By putting down 5%, the funding fee charged by the VA is reduced to 1.5% from the usual 3.3% on a second use VA home loan.
To illustrate the potential savings, let’s consider the purchase of a $400,000 house. Without a 5% down payment, the funding fee of 3.3% would amount to $13,200 added to the loan. However, if the veteran brings in a $20,000 down payment (5% of $400,000), they can save $7,500 by avoiding the additional funding fee.
It’s important to note that this option is applicable only if the veteran does not receive 10% or more in VA service-connected disability benefits. For veterans in this situation, other benefits and options may be available.
At Creekside Mortgage, Inc. we take pride in assisting fellow veterans and providing truthful answers during the homebuying process. To get your questions answered and receive guidance, you can contact them at 360-571-5626 or via email at Greenwaldteam@creeksidem.com.
Please keep in mind that loan terms and conditions can vary, and it’s always a good idea to consult with a qualified financial professional or lender to discuss your specific situation. Our team is here ready to help when your ready.
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