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VA Loan Facts
VA LOAN CLOSING COSTS
The veteran can pay a maximum of all reasonable and customary amounts for any and all
of the "Itemized Fees and Charges" designated by VA as defined below plus a 1% flat charge
by the lender plus reasonable discount points. Some special provisions apply to
construction, alteration, improvement and repair loans.
HOW TO HAVE MINIMAL TO NO CLOSING COSTS
Please note that often times veterans believe that closing costs are covered by a VA mortgage. While that is not
technically true, the same effect can be reached through careful structuring of your real estate contract.
The loan amount will be the purchase price or appraised value, whichever is less (plus the VA Funding Fee).
So if you want your closing costs covered by the loan, you need to increase the price and have a stipulation with
the seller will pay the closings costs and pre-paid expenses equal to the amount by which you have increased the price.
As long as the home appraises for the increased price, you will have the closing costs paid as part of the deal. Closing
costs and pre-paid expenses can vary widely with 3% - 5% as the range for most places. If you want a more specific number
in this regard after you have started looking for properties, we can provide you with a Good Faith Estimate for a particular
property that you have an interest.
ITEMIZED FEES AND CHARGES
The VA defines allowable fees and charges that the veteran borrower can pay or
closing costs that may be charged to the borrower. These costs are determined as
reasonable and customary by each local VA office. All other costs in the transaction
are considered non-allowable and generally paid by the seller when purchasing a new
home or by the lender when refinancing your current VA mortgage. Itemized fees and
charges are as follows:
APPRAISAL AND COMPLIANCE INSPECTIONS
The veteran can pay the fee of a VA Appraiser and VA compliance inspectors. The
veteran can also pay for a second appraisal if they are requesting a reconsideration of
value. The veteran cannot pay for a second appraisal if the lender or seller is requesting
a reconsideration of value or if parties other than the veteran or lender request the appraisal.
RECORDING FEES
The veteran can pay for recording fees and recording taxes or other charges incident
to recordation.
CREDIT REPORT
The veteran can pay for the credit report obtained by the lender.
PREPAID ITEMS
The veteran can pay that portion of taxes, assessments, and similar items for the current
year chargeable to the borrower and the initial deposit for the tax and insurance account.
HAZARD INSURANCE
The veteran can pay for the hazard insurance premium. This includes flood insurance,
if required.
FLOOD ZONE DETERMINATION
The veteran can pay the actual amount charged for a determination of whether a property
is in a special flood hazard area, if made by a third party who guarantees the accuracy
of the determination.
SURVEY
The veteran can pay a charge for a survey, if required by the lender.
TITLE EXAMINATION AND TITLE INSURANCE
The veteran may pay a fee for title examination and title insurance, if any.
If the lender decides that an environmental protection lien endorsement to a title policy
is needed, the cost of the endorsement may be charged to the veteran.
SPECIAL MAILING FEES FOR REFINANCING LOANS
For refinancing loans only, the veteran can pay charges for Express Mail or a similar
service when the saved per diem interest cost to the veteran will exceed the cost of
the special handling.
VA FUNDING FEE
Unless exempt from the fee (10% minimum disability from the VA), each veteran must pay a
funding fee to VA.
OTHER FEES AUTHORIZED BY THE VA
Additional fees attributable to local variances may be charged to the veteran only
if specifically authorized by VA. The lender may request VA to approve such a fee if it is,
(a) normally paid by the borrower in a particular jurisdiction, and
(b)considered reasonable and customary in the jurisdiction.
The following list provides examples of items that CANNOT be charged to the veteran as
"itemized fees and charges." Instead, the lender must cover any cost of these items out of its
flat 1% fee.
Loan closing or settlement fees, document preparation fees, preparing loan papers
or conveyance fees, attorneys services other than for title work, photographs, interest rate
lock - in fees, postage and other mailing charges, stationery, telephone calls and other
overhead, amortization schedules, pass books, and membership or entrance fees, escrow
fees or charges, notary fees, preparation and assignment of mortgage to other secondary
market purchasers, trustee's fees or charges, loan application or processing fees,
fees for preparation of truth-in-lending disclosure statement, fees charges by loan
brokers, finders or other third parties, and tax service fees.
When reviewing allowable borrower fees and charges, many of the items can be paid for by
the seller of the home and can be negotiable when presenting an offer on a home to the
seller. Please consult with your Real Estate Professional handling the transaction.
FREQUENTLY ASKED QUESTION # 34 [ -more VA Loan questions- ]
- - - - - -
Q: Foreign Purchases - Can I purchase outside America?
A: The VA does not allow veteran mortgages for properties outside the United States. The VA does allow purchases in "American territories and possessions". These areas include Puerto Rico, Virgin Islands, American Samoa , Guam, and the Northern Mariana Islands. If your proposed purchase is in one of these areas, you should be able to apply in the usual ways, but check with your VA rep for any special requirements or conditions based on the laws which cover lending in those territories. (Our company, www.valoans.com, only originates VA home loans for properties in the United States.
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VA Loan Rates
for 5/18/2008
30 year fixed
-----------------
0.000 points
6.000%
6.110% APR
15 year fixed
-----------------
0.000 points
6.000%
6.190% APR
Life Insurance for Military Members
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