The VA funding fees are changing due the Veterans Administration analyzing the VA mortgage loan program.  The VA has decided to decrease funding fees for VA loans.

How Will the New VA Funding Fees Impact Borrowers?

The new VA funding fees will impact both new and existing borrowers. New borrowers who take out a VA loan after April 7th, 2023, will pay lower funding fees. The amount of the fee will vary based on the type of loan, down payment amount, and military service status.

For example, a first-time VA loan borrower with no down payment will see their funding fee  from 2.3% to 2.15% of the loan amount. A borrower with a down payment of 5% or more will see their funding fee increase from 1.65% to 1.50% of the loan amount. These decrease may seem small, but they can add up quickly for borrowers who are financing a large amount.

Existing VA loan borrowers who are planning to refinance their loan will also be impacted by the new funding fees. If you currently have a VA loan and are planning to refinance after April 7th, 2023, you will need to pay the new, lower funding fee. This may make refinancing more attractive for some borrowers, as the additional savings could improve savings.

It's important to note that the new funding fees will not impact disabled veterans or their surviving spouses, as they are exempt from VA funding fees.

How Can Borrowers Prepare for the New VA Funding Fees?

If you are planning to take out a new VA loan or refinance your existing VA loan after April 7th, 2023, it's important to factor in the new lower funding fees into your calculations. This will help you determine the total cost of your loan.

Borrowers who are considering refinancing their VA loan should compare the new lower funding fee and the potential savings from a lower interest rate. Depending on the size of the loan and the difference in interest rates, the lower funding fee may make refinancing more attractive.

It's also a good idea to speak with a VA-approved lender, like 1^st Choice Mortgage or financial advisor to discuss your options and how the new funding fees may impact your finances.

In conclusion, the new VA funding fees that will go into effect on April 7th, 2023, will impact both new and existing VA loan borrowers. While the decrease may seem small, they can add up quickly for borrowers who are financing a large amount. It's important to factor in the new fees when planning your finances and to speak with a 1^st Choice Mortgage, we are experts when it comes to VA mortgages in Idaho. 

You can find more information and the current Chart by going here: VA Funding Fee Chart