Question:

How big is the VA loan origination fee?

Answer:

The VA loan origination fee is a typical 1%, but may vary among lenders and states. Generally, lenders offering VA loans estimate closing costs from 3 to 5% of the loan amount. The veteran buyer is often allowed to roll VA loan origination fee and other closing costs into the loan.

However, even though a VA loan is great option for veterans and other eligible individuals - PMI and down payment are not required; broker fees are not allowed; there is a VA funding fee along with the VA loan origination fee.

The VA funding fee varies between 0.5% and 3.30% of the loan amount, depending on the type of VA loan and if it is a first or subsequent VA loan for the applicant. The ultra low VA funding fee of 0.5% is paid on assumptions and interest rate reduction refinances; the 3.30% is paid for cash-outs, and by applicants with no down payment who are using a VA loan for a second time.

VA Loans Require Certificate of Eligibility

To get a VA loan, the applicant needs a Certificate of Eligibility showing all active duty dates and the discharge type. If you don't have one:

  • The VA lender may be authorized to access the ACE (Automated Certificate of Eligibility) system and could issue one, if there is sufficient data for your case.
  • Or you could fill in a VA Form 26-1880 and submit it to the VA Eligibility Center together with proof of your most recent or current military duty.
VA Eligibility Center Address and Telephone Number For overnight delivery:
VA Loan Eligibility Center
PO Box 20729
Winston-Salem, NC 27120
VA Loan Eligibility Center
251 N. Main Street
Winston-Salem, NC 27155
Toll free number: 1-888-244-6711
E-mail: nceligib@vba.va.gov

Closing Costs May Be Rolled into the VA Loan

If you cannot afford to pay cash the VA loan origination fee, funding fee and other closing costs, talk to the lender to get those included in the loan. Even if not every VA approved lender will agree to roll home loan origination fee and others in the loan, most will.

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