Our Builder is offering $3000 towards closing cost if we use a certain mortgage company. This is split 50/50 between the builder and the mortgage company.
This is our 3rd VA loan, my husband has 30% disability, which exempts him from the funding fee correct?
The cost of the new house is $250,000. Reading through the VA regulations, the origination fee can only be 1% of the loan amount, right?
We are being charged $11,242.00 with a credit of $7542.00 for interest rate of 5.25%. So total origination fee is $3700.00.
Shouldn't it be $2500.00? That's one question.
The other question I have is the itemized fee's. I heard that the VA loan guidelines do not allow charging for additional processing fee $300, underwriting fee $900 and settlement fee $300. Those are the responsibility of the seller, is that correct?
My mortgage company is claiming that because the seller\builder is offering $1500 towards my closing cost, they can charge those fee's to me. That is not right, is it?
=====ANSWER=====
Hello Sally,
Thank you so much for visting my site and asking such great questions. Giving me lot's of details helps a great deal when offering an answer. I will try and give you some answers regarding VA Loan Costs below.
Your first question was in regards to the VA Funding Fee and exemption from it. If your husband has a service related injury and a letter for at least 10% disability from the VA regarding this, then yes you are exempt from paying this fee. As a third time applicant for a VA home loan, the fee you would have paid for a "zero down" home loan would be in the neighborhood of 3% or more. But you should not have to pay this fee at all if you have the letter from the VA.
As far as other VA Loan Requirements: Your are correct on the loan origination fee. The maximum allowed is 1% of the loan amount.
As far as other fees allowed, check out this link on VA Loan Fee for an answer I provided another visitor to my website. In short, some of the costs may include the VA appraisal, credit report, loan origination fee (usually 1% of the loan), discount points, title search and title insurance, recording fees, state and/or local transfer taxes, if applicable, survey fees.
As far as the lender telling you they can charge processing, underwriting and settlement fees because your seller is offering you a credit, that is correct to the best of my knowledge.
The seller is actually paying them with the credit he is giving you. It's just a slick way of getting the fees into the deal and creating a legal way to have them paid. No doubt your builder and lender have a mutual relationship of some sort.
The $3700 cost that you may feel is the origination fee, is very likely $2500 for origination plus the fees for appraisal, discount points (if any) title work, recording etc. Ask your loan officer to explain this to you if you feel something is not right. Without me seeing your GFE, it's very hard for me to tell.
If you are able to buy a brand new $250,000 house with only $3700 out of pocket costs, you have a great deal going there.
Since you have obviousily qualified for this loan already, if I were you I would not hesitate to move forward.
Please tell others about my website if you feel this has been helpful. Sorry for the delay in answering your questions. I had to think on this one and do some research.
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