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Unformatted text preview: marily liable. • • Interest rate – The interest rate and discount points are negotiable between lender and veteran–borrower. The seller may pay the discount points, the buyer and seller may split the payment, or these points can be paid by a third party. Loan origination fee – The lender may charge the veteran borrower up to one point loan fee, which goes to the lender, plus a funding fee (points), which goes to the Department of Veterans Affairs and is based upon the amount of down payment: • • • • 2% for loans with less than 5% down. 1.5% for loans from 5% to less than 10% down. 1.25% for loans with 10% or more down, and for all loan assumptions. 1% for loans on manufactured homes.
Dynasty School (www.dynastySchool.com) 5-39 REAL ESTATE FINANCE
Higher fees apply to Reserve and National Guard members. Loan Term – The term cannot exceed the remaining economic life of the property, with a maximum term of 30 years. Maximum Loan – There is no maximum loan amount under DVA rules. This does not mean you can obtain a no–down DVA loan in any amount. Since the DVA guarantees only a portion of the loan, lenders limit the amount they will lend on DVA loans. Most lenders use the maximum loan amount set in the secondary market. As stated earlier, since the bulk of DVA loans are sold to Fannie Mae or Freddie Mac, lenders follow FNMA or FHLMC rules. Both agencies limit the maximum loan to four times the entitlement. At the present entitlement of $60,000, the maximum loan would be $240,000. when the entitlement is increased, the maximum loan is thereby increased. The main point to remember is that the DVA does not set the maximum loan amount; it is the lender that determines the amount. Regardless of the loan amount, the DVA will not reimburse the lender for more than the amount of entitlement, regardless of what the lender's loss may be upon foreclosure. Gifts – Gift letters are required to confirm the nature of gifts. Additional Income – Child support and alimony...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.
- Spring '10