Is it typical for a lender to charge a PMI on a VA loan?
I live in Las Vegas, NV and am purchasing a home. I want to go VA, because I don’t want to put anything down. However, my current lender-to-be is including mortgage insurance. I was told that VA loans don’t typically need PMI. I am wondering if I am getting screwed…
10 Responses
oompa
11 Feb 2010
beachlover
11 Feb 2010
there is no PMI required! brokers love va loans they get paid more!!!
you pay 2 % to the va to get the loan plus the lenders fees buy the time your done your paying 5% in fees
there is a cheaper way to go and still get a great rate!
If you qualify for a normal fixed rate it will save you check out the VA rates and points you have to pay!
the same rate you want with va can be achieved without paying all the points
there are other options avalible to you look here and see if they beat it!
Ill bet they beat what you have in hand by alot!
try here for options they can give you a clear picture
Gregg
11 Feb 2010
Not only does the VA not require PMI, it also prohibits lenders from requiring it.
Your lender is a dimwit and you need to run like the wind and report them! Anyone that tells you otherwise is also a dimwit!
Mike
11 Feb 2010
I always thought there was no PMI on VA loans.
I would find another mortgage broker. Go to a credit union.
bdancer222
11 Feb 2010
Doesn’t PMI stand for Private Mortgage Insurance? A VA loan isn’t a private mortgage.
Ask questions. Read everything carefully.
debbie p
11 Feb 2010
there is no PMI but you will pay 2% of the loan amount to the VA
you also pay the lender fees brokers love VA loans they tend to pay more to the broker
although many think the Va offers better rates the same rate can be achieved without paying All the fees invloved with a va loan.
if your credit is high enough consider going with a fixed product.
fren c
11 Feb 2010
no PMI but there is a 2% fee
if you can get a conventional loan you’ll make out better
after paying 2% to va and broker fee you could have gotten a conventional loan and paid less in the long run!
ted f
11 Feb 2010
there is no PMI on va
the VA does not finance loans they insure them and other lenders fund them
the same lenders that would finance you VA would also finance you on a conventional loan & you will pay less in fees
the va only insures the loan and charges you 2%
you can get teh same rate thru the conventional financing and not pay additional fees
with va you can finance you fees in but you are paying interest on those fees. i think banks and brokers get paid more on VA loans from the lenders
pearl m
11 Feb 2010
No PMI with VA but several other fees added
frankie b
11 Feb 2010
I thought the point of a a is that hey are insuring the loan. Why would you need pmi? Makes no sense.
All of these answers are slightly incorrect. VA does have mortgage insurance, but it is financed through the VA funding fee the is collected through the loan, resulting in no monthly payments. Size of fee, depends on if you’ve used your VA benefits before, or in other words on your entitlement.
Still though, you should not see a MI or PMI payment present on your good faith estimate. It could simply be a mistake, most loan systems are automated now and these things happen. If still in doubt, ask for a copy of a Rate Lock. it will among other things indicate the type and interest rate of the loan that has been secured.
If you are still in doubt, contact the department of Veteran’s Affairs. They are very protective of our veterans and will quickly get right to the heart of the matter. If nothing else they can place you with an alternative, local lender that can help you.
Ignore the wolves in sheep’s clothing trying to solicit your business. If you can get seller credits to pay your closing costs, VA is the best thing going right now. Ability to do a appraisal-less, 14 day streamline refinance, permission to let another veteran assume your loan, slightly below market interest rates….yes, take it. It beats the snot out of any conventional loan even if you have excellent credit.