John Morris

VA Loans (Expensive)

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30 posts in this topic

We're in the middle of refinancing our mortgage down to a shorter term, and lower interest rate so I can get our home paid off near retirement age. The numbers work, we are very happy with the payment, and the low interest rate of 3.75%.

The reason why we need to go through the VA, is our home is barely above water in loan to value, a conventional loan won't touch us still unless we are 95% LTV. Our area is still reeling from the housing disaster of 08'. Our 365,000 dollar home in 08' slid down to a value of 98,000 dollars, and we owed 245,000 on it at that time almost 10 years ago. And we are still a tad under water, so the flexibility of the VA loan will help us out.

But, it comes with a price.

The VA is charging us $8250.00 to fund the loan, OUCH! And they are charging us a 600.00 appraisal. I told our lender I was going to go out and get our own appraisal done for around 250 to 300 bucks, but they told us the VA requires their own appraiser to visit our home, and their appraiser costs 600 bucks. We checked, and the lender aint lying to us.

 

I am aching over the fact that we have to add another 9 grand in VA fees to our principal, but like I said, the loan is very favorable compared to what we have now, and our home will be paid off 10 years early, just 5 years after I retire at the age of 60. But man, those fees!!!! Do me another favor VA! Thank you sir may I have another!

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A friend sold his Mom's house, after she passed. He had a VA inspection done to provide a broader sales base. I know that inspection wasn't that expensive. I wonder if there are different rates in other areas?

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4 minutes ago, lew said:

A friend sold his Mom's house, after she passed. He had a VA inspection done to provide a broader sales base. I know that inspection wasn't that expensive. I wonder if there are different rates in other areas?

Here ya go Lew: http://www.benefits.va.gov/HOMELOANS/documents/docs/phoenix_fee.pdf

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Why? Why higher than a regular appraisal? Hmmm, here in our neck of the wood appraisals for a conventional loan cost around 300 bucks or less.

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1 minute ago, Gene Howe said:

Wow! That loan fee is outrageous. 

 

Stick it to the vet!

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Here is the funding table for the actual loan, I fall into the category of 3.3% of loan for our fee. And our fee is $8250.00

http://www.benefits.va.gov/homeloans/documents/docs/funding_fee_table.pdf

 

But like I said, as horrible as those fees seem, the terms are favorable in the long run to us and our goals, but it just sucks is all to have to fork over 8250 bucks. The actual lender fees are only around 800 bucks, the lender is the good guy in this scenario!

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John, are you certain that isn't a fee charged by the lender and the title co.? A 1% origin isn't unusual. But, it's not charged or collected by the VA. 

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1 minute ago, Gene Howe said:

John, are you certain that isn't a fee charged by the lender and the title co.? A 1% origin isn't unusual. But, it's not charged or collected by the VA. 

From what I understand the 3.3% funding fee is by the VA, as seen in the pdf link I put up in my last post. I got that off the VA website.

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Here is why:

Quote

The VA Funding Fee is a set fee applied to every purchase loan or refinance. The proceeds go directly to the VA and help cover losses on the few loans that go into default.

https://www.veteransunited.com/valoans/va-funding-fee-explains-the-fee-who-pays-what-and-why/

 

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Just talked to my son in Tucson. His loan fees amounted to 1.25% on a 10 year, $285 K loan, 3 years ago. He doubles his principle pmt. each month and will be paid off in 2020. 

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14 minutes ago, Gene Howe said:

Just talked to my son in Tucson. His loan fees amounted to 1.25% on a 10 year, $285 K loan, 3 years ago. He doubles his principle pmt. each month and will be paid off in 2020. 

Was it a conventional or VA?

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4 minutes ago, John Morris said:

Was it a conventional or VA?

VA, he's retired AF. He and his RE agent did some lender shopping. 

Edited by Gene Howe (see edit history)

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3 minutes ago, Gene Howe said:

VA, he's retired AF. He and his RE agent did some lender shopping. 

We did some lender shopping too Gene, when it comes to the VA fees, our fees are 3.3 percent across the board, no matter what lender we speak with. Hmmm. He must have different conditions then we do. Per the chart I linked above, there are other conditions that would dictate a lower VA funding fee, he must of fell into the other categories that we do not.

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If you look at this form, http://www.benefits.va.gov/homeloans/documents/docs/funding_fee_table.pdf

You'll see that for 100 percent funding, no down payment, the fee is 3.3 percent. The fees go down if you come to the table with a down payment, or in the case of refi, you have equity in your home. We have no equity, we have no down payment, and we are using our VA loan for the second time, so we fit in the 3.3 percent category.

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31 minutes ago, Gene Howe said:

Just talked to my son in Tucson. His loan fees amounted to 1.25% on a 10 year, $285 K loan, 3 years ago. He doubles his principle pmt. each month and will be paid off in 2020. 

I see 1.25% in the chart I linked, he must of fell into one of those categories.

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11 minutes ago, clhyer said:

John, what interest rate & terms do you currently have?

Cal

6.6% with 30 yrs left on the loan.

 

New loan will be 3.75 percent fixed for 20 years, we'll make extra payments and actually get it paid off in 15.

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