Mortgage Glossary
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VA Mortgage
A mortgage loan that is guaranteed by the Department of Veterans Affairs (VA). Also known as a
government mortgage.
VA Mortgage Fee
The VA funding fee is required by law. The fee, currently 2 percent on no
down payment loans, is intended to enable the veteran who obtains a VA home loan to contribute toward the cost of this benefit, and thereby reduce the cost to taxpayers. The funding fee for second time users who do not make a
down payment is 3 percent. The idea of a higher fee for second time use is based on the fact that these veterans have already had a chance to use the benefit once, and also that prior users have had time to accumulate equity or save money towards a
down payment. Second time users who make a down payment of at least 5 percent pay a reduced funding fee of 1.5 percent, the same as first time users making the same
down payment. For a 10 percent down payment, the fee drops to 1.25 percent. The effect of the funding fee on a veteran's financial situation is minimized since the fee may be financed in the loan. Vacant Land
Property that is unoccupied and thus not being used. It is usually raw land with no structure or improvements thereon. Vacation Home
Second home. The interest and real estate taxes on the second home are tax deductible on the family's 1040 tax return. Vested
Having the right to use a portion of a fund such as an individual retirement fund. For example, individuals who are 100 percent vested can withdraw all of the funds that are set aside for them in a retirement fund. However, taxes may be due on any funds that are actually withdrawn.
VA (Department of Veterans Affairs)
An agency of the federal government that guarantees residential Business made to eligible veterans of the military services. The guarantee protects the lender against loss and thus encourages lenders to make Business to veterans.
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