YOU ASK:

Do VA loans have mortgage insurance?

WE ANSWER:

The Veteran's Administration or VA acts to guarantee the loan in behalf of the borrower. So you won't need to get third party mortgage insurance for a VA Loan. That means that you don't have to pay extra for upfront or monthly mortgage insurance premiums. Since the VA acts as your guarantor, there is no need for mortgage insurance.

Instead, the lender is asked to obtain a funding fee upon closing, which is a one-time fee paid upfront.

To compute for how much you would pay for the funding fee, get your total loan amount (don't forget to include closing costs if these will be rolled into the loan and are not paid out of pocket). There is a table for the fees, these depend on the situation of the borrower.

Remember, the VA is only for eligible veterans who served or serves the military on a full time basis. Thus, the table of fees is for various situations the veterans are in:

  • 2.15% for first time home buyer who can't pay the down payment.
  • 3.3% for those buying a home for the second time. This is also with no down payment required.
  • 1.5% if there is a 10% down payment or less.
  • 1.25% if there is a down payment of more than 10%.

As for members of the Reserve and the National Guard, the fees would be as follows:

  • 2.4% for first time home buyer who can't pay the down payment.
  • 3.3% for those buying a home for the second time. This is also with no down payment required.
  • 1.75% if there is a 10% down payment or less.
  • 1.5% if there is a down payment of more than 10%.
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