As an active member of the U.S. military, you have access to a variety of unique and helpful benefits. Retired members also have access to some benefits, and one is the ability to get a VA loan. If you want to pursue a VA loan for your future home purchase, you should understand the funding fee requirements of these loans. Every borrower must pay this fee, and here are three helpful things to know about it.

What the Funding Fee Is For

The Department of Veterans Affairs is an organization that offers services and assistance to people with military experience. In 1944, they began a mortgage program to help veterans purchase homes, and this is what initiated the VA loan system.

The VA offers backing for every loan issued. The purpose is to reduce the risk lenders assume when issuing mortgages to people. If a borrower cannot repay the loan and ends up in foreclosure, the VA pays the lender the amount owed.

To allow for this provision, the VA charges a funding fee. The money they collect from the fees goes to pay for loans that borrowers failed to repay.

The Costs for the Fee

The funding fee is always a percentage of the amount a person borrows when taking a mortgage. The percentage varies, though. There are two main factors that affect the percentage a person must pay:

1. The amount of the down payment
2. If this is the applicant's first VA loan 

The percentage you pay for the funding fee drops as you put more money down. You should expect to pay 2.3% if you do not put any money down. You will pay 1.65% with a 5% down payment, and 1.4% with a 10% down payment.

People also pay a lower rate for their first VA loan. If you get a second one, the rate is slightly higher.

Options for Paying It

You have two options to pay the fee required for your mortgage loan. The first is to pay it with the cash you have. The second is to pay it by rolling it into the loan you get. The second option will result in having a higher loan amount, but it also makes it easier to afford the loan costs.

If you have questions about your eligibility for a VA loan, ask a mortgage lender. A mortgage lender can also give you more information about VA loans and other options you could choose from as a veteran.