VA refinance

VA Loan Refinancing Fees For “Other Refinancing Loans”

January 15, 2013

VA Loan Refinancing Fees For “Other Refinancing Loans”

In the past we’ve covered a wide range of refinance loan topics here, including the associated fees and charges that come with refinancing a VA mortgage.

The VA has rules not only about these fees and charges, but also which of them may be financed or included in the loan amount.

The VA loan rulebook, VA Pamphlet 26-7, has a section in the refinancing loan rules that covers “other types” or refinancing loans. These are described in Chapter Eight of VA Pamphlet 26-7 as “…any loan to refinance:

  • A construction loan,
  • An installment land sales contract, or
  • A loan assumed by the veteran at an interest rate higher than that for the proposed refinancing loan.”

In situations where a borrower wants to refinance any of the loans mentioned above, the VA rules say the loan amount can include “any allowable fees and charges discussed in section 2 of this chapter, and reasonable discount points.”

Those allowable fees and charges include (but are not limited to) things such as credit report fees, title fees, hazard insurance, flood zone determination, etc. However the VA loan rulebook also adds a caveat, stating, “Maximum loan limits may not allow inclusion of the full amount of these items.”

The maximum loan amount for these “other refinancing loans” is the lesser amount of the:

  • Sum of the outstanding balance of the loan being refinanced plus allowable fees and charges (other than the funding fee) plus discount points, or
  • VA reasonable value of the property, plus
  • VA funding fee, plus
  • Cost of any energy efficiency improvements.

For more information on your specific needs or circumstances, talk with a loan officer or contact the VA directly for advice by calling 1-800-827-1000.

Do you have questions about VA home loans? Ask us in the comments section.

 

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