A veteran purchases a home for $400,000 using a VA loan with no down payment. The VA funding fee for a first-time use with zero down is 2.15 percent. If the veteran finances the funding fee, what is the total loan amount?
Correct Answer
D) $408,600
VA funding fee = $400,000 × 2.15% = $8,600. Total loan = $400,000 + $8,600 = $408,600. The funding fee is financed into the loan amount.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
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