VA Funding Fee Decrease is Delayed
Recently the VA announced that they would significantly reduce their Funding Fees for VA loans that closed after October 1, 2011. Politics in Washington have pushed back this funding fee drop to apply only to VA loans that close after November 18, 2011.
VA loans have great interest rates and carry no monthly Private Mortgage Insurance even at 100% Many veterans do not realize that VA loans can go up to $1.5M but they do require a down payment if the loan is above 417k (for example, an 800k purchase price would require a 10% down payment). Another seldom known fact about VA loans is that a veteran can get a 2nd VA loan if the existing VA loan is less than $144k (this is called Bonus Entitlement). VA loans are only allowed on primary residences and require a 620 fico score.
There are certain closing costs that a VA borrower is not allowed to pay which need to be addressed on line 79 of the AAR purchase contract. The amount of these "VA non-allowables" varies depending on the title company and the purchase price but writing $800 on the space in line 79 should cover you 99% of the time. The seller is allowed to contribute up to 4% of the purchase price towards a VA buyer's closing costs and prepaids which would include the VA non-allowables.