Closing Costs For A VA Mortgage
Purchasing a house with a VA Loan is a great choice for all veterans. The many benefits of going through the VA to obtain a loan include: no down payment, lower interest rates, no monthly insurance and easy refinancing. It’s important to remember that although the total cost of the VA Loan is much more affordable than a conventional loan, you will still need to factor in all your closing costs. Luckily, the VA has also accounted for this and put a limit on how much you will have to spend on closing costs. Here are some of the closing costs that you will be expected to pay.
Your credit report is mandatory in order to establish your eligibility for the loan. As with conventional loans, you are required to pay for the report.
Loan Origination Fee
Your lender may charge you 1% of the total loan for all itemized costs. This a flat rate, and must cover all the administrative charges associated with processing the loan.
The VA charges a one-time fee that varies in price depending on the type of loan issued. Some veterans are exempt from this charge, so be sure to check whether you are required to pay this fee.
Appraisal and Compliance
The appraisal and compliance inspection on the house must be paid for by the veteran.
Loan Discount Points
If you obtain a loan with an interest rate below the current mortgage market rate, you may be charged for discount points. Currently, up to two discount points (or 2%) is considered a reasonable charge.
Recording taxes, recording fees and any other type of recordation is expected to be paid for by the veteran.
You may be responsible for any pre-paid fees such as taxes, assessments and other similar items for the current year for the initial deposit of the tax and insurance account.
When applicable, the veteran must pay the survey fee.
You may have to pay for the hazard insurance premium which can include flood insurance if required.
Title Exam and Title Evidence
The veteran may have to pay a fee for title examination and title insurance, if any.
All the closing costs associated with a VA Loan must be paid in cash and cannot come from the loan itself, so it’s important to procure the necessary cash before you start the loan process. Talk to your lender before you get started. Your loan officer is required by RESPA to give a Good Faith Estimate of all the settlement charges.
How to Get Started Today
It’s never been easier to get started with a VA refinance. Simply fill out our secure 1-minute quote request form
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