Using your VA Benefits

If you have served a total of 2+ years active duty, or 6+ years in reserves, and have an honorable discharge (or are still active/reserve duty) you are eligible to utilize VA benefits for purchasing a home.

How the program works

VA charges a one-time "funding fee" of:

2.5% of the purchase price if you have not used your benefits for a home purchase previously, and have eligibility because of active duty service.

3.5% if you have active duty eligibility or reserve eligibility and have previously used your benefits.

2.75% if you are using your benefits for the first time and have eligibility based on 6+ years in the reserves.

If you receive monthly disability compensation from the VA you are completely exempt from any funding fees.

This funding fee is added onto your purchase price, and VA guarantees the loan against default; so you don’t have to pay mortgage insurance.

Compared to a Conventional loan

A conventional loan typically requires a minimum of 5% down
Example below is a 150,000.00 purchase, with a conventional 5% down loan versus a VA "0" down. Both loans are assuming seller has agreed to pay all closing costs/prepaids. Assumes a first time use of your VA benefits, with 2+ years of active duty service.

Conventional Vs. Loan VA Loan

As you can see on the V.A. payment is lower, and you don’t need a down payment. Also, since the "funding fee" paid to VA if financed into your loan (combined with no down payment), your principal & interest payment is higher on the V.A., making more of your payment tax-deductible. That’s right!! Your overall payment is lower, your cash out of pocket can be "0" instead of $4,500.00, and more of your payment is tax-deductible.

For more information, please give me a call.
Larry Marshal-  Mobile: 253-973-6363