Recent news by the Veterans Administration announced the reduction in VA Mortgage Funding Fees in The Woodlands Texas and in everywhere VA Mortgages are available.
Many people talk about the VA Mortgage funding fee otherwise known as One time up front mortgage insurance has been reduced but few give credit where credit is due. The simple fact is that VA Mortgages have the lowest default rates of any home mortgage. This is in spite of the fact that VA Mortgages in the Woodlands Texas and elsewhere require no down payment and the Veteran is disallowed to pay many fees that a buyer has to pay on other home purchases. There are cases where veterans are discriminated as I’ve pointed out, however this still comes up from time to time as I’ve written about previously.
So the Veterans Administration is passing these savings to every Veteran qualifying for a mortgage. Starting November 18, 2011 these VA mortgage funding fee will be slashed in some cases by 60%. This information is current as of, Sunday August 20th 2017. Take a look at the table below.
Down Payment Veteran Reservist/National Guard Old Fee New Fee Old Fee New Fee % Reduction
First Time Use < 5% 2.15% 1.40% 2.40% 1.65% 35%
>= 5% and < 10% 1.5% .75% 1.75% 1% 50%
10% or more 1.25% .5 1.5% .75% 60%
Subsequent Use < 5% >= 5% and < 10% 10% or more Refinances - Interest Rate Reduction Loans (VA IRRL) .5% .5% .5% .5% No Change
Assumptions .5% .5% .5% .5% No Change
Service-Connected disability of 10% or more 0% 0% 0% 0% No Change
With all of the negative news about the mortgage industry this points to that many losses and problems in the industry are not a down payment or “skin in the game issue” but an underwriting issue.
I’ve been doing home loans long enough to know that VA home loans have always had some pretty stiff underwriting requirements and most loan officers just a few years ago flat refused to do them. In fact I was at a brokerage during the old days of subprime and I was the only Loan Officer doing VA Home mortgages and people at the company though I was crazy. Well it’s enough to say that I’m still doing VA mortgages and other mortgages and the people that thought I was nuts have mostly quit the business.
In closing, I want to say what I say to every Vet. “Thank you for your service” and it’s great to see that the VA mortgage won’t be going anywhere soon.
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