Your eligibility is reusable depending on the circumstances. Normally, if you have paid off your prior VA loan and disposed of the property, you can have your used eligibility restored for additional use. Also, on a one-time only basis, you may have your eligibility restored if your prior VA loan has been paid in full but you still own the property.
What is the difference between first time use and subsequent uses of your VA eligibility?
When using your VA eligibility for the first time, there is a 2.15% funding fee. Anytime the eligibility is used after that, you are charged a 3.30% funding fee. These funding fees are typically added to the loan amount so you do not have to pay it up front. By VA charging this funding fee, they do not charge any monthly mortgage insurance premium.
Is there a way around this? - Yes, if you receive at least 10% VA disability, you are exempt from the VA funding fee!
Mortgage Monday is provided by Danielle Hifko, Mortgage Consultant with New American Mortgage
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