If you have qualified for a Veteran's Administration Loan then there are certain fees associated with it that you have to make to the lender and the funding fee is one of them. This fee is cut from the amount borrowed on this loan. It is a type of tax payment.
There are two ways by which you can pay the funding fee to the lender, either you can pay it in cash or you can finance it. Whatever way you choose you have to pay it at the time of closing. This fee is charged in almost all other mortgage loans, however, there are some borrowers of VA loans who are exempted from paying this fee.
These borrowers include the spouses of those soldiers who died while serving the nation provided that they do not remarry and the other people included are the soldiers who became handicapped. According to the guide of VA lenders these people are not require to pay the funding fees.
If you think that you can be exempted from paying this fee then you have to claim for it to the US department that manages veterans' matters. It will not be done automatically. If you did not claimed for it in the first place then it will be useless if you claim for it during the procedure of VA loan and you will be required to pay the funding fee.
Hence, it becomes essential for you that before you apply for the VA loan you must seek for professional advice from the VA loan specialists. They will guide you how you can pay the least amount as funding fee and what are the rules of this loan system. If you are eligible for the exemption of this fee but did not get it back by the lender then you must talk to your regional VA loan center and appeal for this so that you get it back before the closing date of the loan.
Whenever a borrower has paid the funding fee to the lender, they must get its written proof from them so that it can be shown at the time of refunding of this fee. They should also show a proof of the approval the borrower got from the government for the exemption of this fee, the certificate that demonstrates that the eligible candidate is handicapped and retired or discharged or in case of a spouse, he or she must also show a document that tells their current status.
Nevertheless, you should always have enough funds to pay this fee even if you are sure of getting it back. As the process of refunding may take time it is better to pay than to be humiliated.
