Before you start looking for homes for sale in the local area or scheduling
showings, it’s important that you start mortgage shopping (if you’re not
paying cash) for your future home purchase. If you have served in the U.S.
Military, or if you are the survivor of a service member, you may be eligible
for a VA Loan.
What is a VA Mortgage Loan?
A VA mortgage loan is a home loan that is available to qualified military members, including veterans, active-duty service members and some eligible surviving spouses. The benefit of applying for a VA loan is that down payments are not required in order to close on the home, which can make it easier for military members to secure housing. These VA home loans also typically have more favorable rates than conventional or FHA mortgages.
The VA Funding Fee: What You Need to Know
While you may not have to pay a down payment, you may have to pay the VA
funding fee. The VA funding fee is a one-time payment that must be paid by
the loan applicant either at closing or added to the mortgage.
There are some VA funding fee exemptions, such as:
• Applicants who are receiving compensation due to a service-related injury.
• Applicants who are eligible for service-related injury compensation but are receiving active duty pay or retirement pay instead.
• Applicants who are surviving spouses who are receiving Dependency and
There may be other exemptions, so it is important to work closely with your mortgage lender to verify your requirements to pay the VA funding fee. Those who have to pay the funding fee will pay a percentage based on the total amount of their loan.
VA Funding Fee Chart
VA Mortgage Loan Closing Costs
In some cases, the seller will pay the buyer’s closing costs. The seller contributions towards the buyer’s closing costs for a VA Loan has a maximum amount allowed is 4.0% of the purchase price. If you are required to pay closing costs as part of your real estate transaction, they will be determined by the mortgage lender and the title company.
If you qualify for a VA loan, then it’s important to partner with a local real estate agent who has experience working with veterans, active duty service members and family members.
Shannon Lindstrom is a knowledgeable local real estate agent who is familiar with the communities and neighborhoods throughout the Twin Cities and surrounding areas, but also she is an experienced MN Military Veterans Realtor. Shannon has received both the National Association of Realtors – Military Relocation Professional Designation as well as the Veterans Association of Real Estate Professionals (VAREP).
If you’re looking for a specialized Twin Cities Military Veterans Realtor, please contact Shannon Lindstrom @ 612-616-9714 at your earliest convenience.