The VA Refinance Funding Fee Myth That May Be Costing Veterans Money Every Single Month

The Assumption That Is Talking Veterans Out of a Refinance They Should Be Doing

A common misconception is circulating among veterans considering a VA refinance that Travis Egan wants to correct before it costs anyone another month of a higher payment than they need to be making.

The myth is that refinancing always means paying the VA funding fee all over again from the beginning. For a significant number of veterans that is simply not true and the assumption alone may be the only thing standing between them and a lower monthly payment.

Two Things Veterans Need to Know About VA Refinance Funding Fees

First, any veteran with a VA disability rating is exempt from the funding fee on a refinance. The same exemption that applies to a purchase loan applies to a refinance. If you are currently receiving VA disability compensation and have been avoiding a refinance because you assumed you would face the full funding fee again that assumption is wrong and it is worth revisiting immediately.

Second, even for veterans who do owe a funding fee on a VA Interest Rate Reduction Refinance Loan the IRRRL carries a lower funding fee than a purchase loan. The cost comparison between what a veteran paid at purchase and what a refinance would actually cost is a very different calculation than most people assume going in.

What a Fee Assumption Can Actually Cost

Every month a veteran stays in a higher rate loan because of a funding fee concern that does not apply to their situation or that is smaller than they assumed is a month of unnecessarily higher payments. Across the life of the loan that adds up to a meaningful amount of money that was left on the table based on incomplete information.

Do not let a fee assumption make that decision without checking the facts first. DM Travis Egan directly with your situation and he will tell you exactly what applies to your specific case. He is here to help. Semper Fi.

Sources

VA.gov
MilitaryOneSource.mil
ConsumerFinancialProtectionBureau.gov
MortgageNewsDaily.com
Investopedia.com