Is the VA Funding Fee Worth it?

It depends on you. If you use a VA home loan, there is no monthly mortgage insurance required. So depending on how much you have to put down on your loan, the funding fee could end up being much less than the amount you would end up paying on mortgage insurance over the life of your loan.

Here is a chart to help you determine what your PMI (private mortgage insurance) rates would be. Use these numbers to help you choose whether your funding fee is worth it to you:

% Down Payment PMI Rate (30 yr mortg.) PMI Rate (10,15,20 yr mortg.)
80.01% - 85% .32 .19
85.01 - 90% .52 .23
90.01% - 95% .78 .26
95.01% - 97% .90 .79


Example: On a $150,000 loan, with a Down Payment of 5% on a 30 yr Fixed Mortgage:
$150,000 X .78%= $1170/yr in mortgage insurance

FYI: FHA loans require a 2.25% fee, AND mortgage insurance.. so consider this when choosing a loan


Happy House Hunting!
~Blalock & Associates

www.gohomesearching.com