What is Funding Fee
The key costs and fees associated with assumable mortgages are:
1. Equity Buyout: The difference between the home's purchase price and the remaining balance on the seller's existing mortgage. This is the largest upfront expense.
2. Assumption Fees:
- FHA Loans: Up to $1,800 to cover assumption processing
- VA Loans: Around 0.5% of the loan balance as a funding fee
3. Additional Closing Costs:
- Title searches, transfer fees, and other administrative expenses
- Appraisal fees, which are sometimes required but often waived
While assumable mortgages can provide long-term interest savings, these upfront costs are important to consider.
How the VA Funding Fee Works in an Assumable Mortgage
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Funding Fee vs Other Assumption Costs: What Really Matters
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