If you or someone you know is a military veteran who gets disability pay (compensation for “service-connected disabilities”) and paid a Funding Fee for his or her mortgage, the veteran is eligible for a VA Funding Fee refund.
The veteran can get those funds back by calling the VA or their lender. Veterans who receive compensation for service-connected disabilities are exempt from the Funding Fee, which can be anywhere from 1.25% to 3% of the loan amount, which is a substantial chunk of change.
The VA Funding Fee refund is required to be given back in the same fashion as the way it was paid (e.g., if paid in cash, you get cash or a check; if wrapped into the loan amount, the principal loan balance is reduced).
If you are interested in refinancing your VA loan, then be sure to work with a VA mortgage expert who knows all the ins and outs of the program and can save you money now, as opposed to later.
Here are some helpful resources:
- Fees, Charges and the VA Funding Fee: http://benefits.va.gov/WARMS/docs/admin26/handbook/ChapterLendersHanbookChapter8.pdf
- Veteran Benefits Administration: http://benefits.va.gov/benefits/