 TITLE: How to Buy Points on a VA Loan CONTENT: How Does Buying Down Points on a VA Loan Work?\n----------------------------------------------\nA VA loan is a specialized mortgage loan that's guaranteed by the U.S. Department of Veterans Affairs. This means that the lender is protected if the borrower can't make their monthly payments.\nVA loans have strict eligibility requirements, effectively making them available only to select members of the military community.\nIt's possible to purchase discount points on a VA loan, which is essentially the same as paying prepaid interest. In exchange for an upfront payment at closing, the lender will reduce the interest rate on your loan.\nFor the most part, the process is similar to buying points on a conventional loan. However, there are some differences, depending on the type of loan you choose:\n*   If you're buying a home, you can't roll your points into the loan.\n*   The seller is allowed to pay up to 4% of the loan amount toward your closing costs, which doesn't include discount points, but it could free up some cash for you to buy them.\n*   With a VA interest rate reduction refinance loan (IRRRL), you can roll the cost of up to two discount points into the loan, but your total loan fees must be recouped in 36 months or less to qualify.\n*   If you want a VA cash-out refinance, you can roll closing costs, including discount points, into your loan as long as the loan-to-value ratio doesn't exceed 90%. Also, your break-even point on closing costs must be 36 months or less.\nIf you're thinking of getting a VA loan and want to understand your options with buying points, speak with your lender to get information specific to your situation. END