VA Loan Articles
News, updates, and explanations to keep you informed.
VA Loan Fees the Borrower May Not Pay
When you go to purchase a home with a VA guaranteed mortgage, there are fees you must pay—closing costs, Up Front Mortgage Insurance, and other expenses—but there are also fees the VA does not allow the buyer to pay.
Did you know the lender or seller can’t charge the borrower for attorney’s fees? If the buyer chooses to pay for his or her own attorney, that’s the buyer’s call—but the buyer can’t be charged for the bank’s legal representation.
The VA also prohibits a real estate agent from charging the buyer a commission. You’ll also find VA mortgage rules that close any loopholes that might allow an agent to charge fees that appear to be commissions even if not defined as such.
It is legal for a house hunter to contact and use a “buyer broker” to find a suitable property, but brokerage fees and commissions are not to be paid by the buyer. The VA adds that property availability and purchase price information is widely available—forbidding a VA mortgage applicant from paying a commission or fee to a buyer broker doesn’t impair the buyer’s ability to find a suitable property.
There are other types of fees the Department of Veterans Affairs won’t approve for VA loan applicants, including the cost of inspections (or re-inspections) of proposed construction properties where the work was done under the supervision of the Department of Housing and Urban Development. In these situations, the builder or the sponsor must pay the cost of inspections.
The VA even places some restrictions on the buyer. A veteran who buys a property with a VA mortgage can’t pay penalty costs associated with existing liens on the sale property—even though those costs may not technically be “fees” they are still not the buyer’s responsibility.
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VA loans don’t always involve a single borrower. Sometimes there are situations where co-borrowers, co-signers, and joint loan applicants want to apply for a VA guaranteed mortgage loan.
There are a great many commonly asked questions about VA home loans, but one of the most-asked topics revolves around the issue of VA loan eligibility. One important issue connected to eligibility is the nature of an applicant’s military discharge.
The VA home loan program is not the only type of government insured mortgage loan program. There are other programs available which, unlike VA loans are open to the general public.
The VA Interest Rate Reduction Refinance Loan program (abbreviated as VA IRRRL) does require a VA loan funding fee. But, borrowers eligible for a this exemption should not assume that it is automatic.
The VA Interest Rate Reduction Refinance Loan program (abbreviated as VA IRRRL) does require a VA loan funding fee. But, borrowers eligible for a this exemption should not assume that it is automatic.
