VA Loan Closing Costs for Buyers

Many veterans believe that the VA loan closing costs are paid by the VA. This is not always true. There are special circumstances depending on your situation.

This will not be a problem as long as the house appraises for the price you have agreed upon with the seller. The closing costs along with any pre-paid expenses are typically from 3% to 5%. The VA determines the fees that the veteran can pay as well as the mortgage closing costs. The costs are what are considered to be reasonable by each VA office in your local area. The other costs that are incurred are non-allowable costs and they are either paid by the seller on a new home or by the lender when you refinance a VA mortgage.

Buyers Mortgage Closing Costs for the VA Loan will include:

1. Appraisal and Compliance - The veteran may pay the appraiser designated by the VA and can pay for another appraisal if they are requesting reconsideration of value. If the lender or the seller wants a second appraisal, the veteran cannot pay for this one.

2. The fees for recording the taxes are paid by the veteran.

3. The credit report that was what used by the lender.

4. The veteran can pay the assessments and taxes for the current year.

5. The hazard insurance premium can be paid by the borrower.

6. The amount charged to determine if the property is in a flood zone.

7. The amount charged for a survey if this is required by the lender.

8. A title examination and the title insurance.

9. Any special mailing fees.

10. The VA funding fee will be paid by the veteran unless they are exempt by receiving a 10% disability from the VA.

Closing Costs for the VA Loan that Should Not Be Included

Now that we have determined what can be VA loan closing costs for buyers, what cannot be charged to them either outright or as part of the "itemized fees and charges" is:

• Attorneys services other than for title work
• Loan closing fees
• Document preparation
• Interest rate lock-in fees
• Telephone calls
• Photographs
• Escrow fees
• Notary fees
• Amortization schedules
• Loan application
• Tax service fees

And the list goes on but you get the idea of what can and cannot be charged. The lender will cover any of the fees that the borrower is not responsible for from the 1% flat fee it charges.

Just because the item is listed as one of the items that may be paid by the buyer does not necessarily mean they have to pay it. There are many of these VA loan closing costs that can be paid by the seller and are also negotiable when the offer is being made. The best way to know if you can get some of these fees paid for you is to talk to your real estate agent and see what they advise.

Leave VA Loan Closing Costs for Buyers and return to VA Home Loan main page.

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