When purchasing a new home with a VA mortgage, unfortunately, there will be closing costs involved. Closing costs are like a four letter word in the mortgage industry. Nobody like them unfortunately every mortgage has closing costs associated with it. It’s just a hard fact when borrowing money to purchase a home. Closing costs is basically a blanket term for many costs and fees for finalizing your home loan.
Closing costs can vary depending on the type of loan, your mortgage lender and even the location of your loan. However, that being said there is some good news for Veteran borrowers. The VA has put a limit on closing costs for veterans and as a matter of fact there are even some closing costs that Veterans are not allowed to pay.
Another thing many veteran homebuyers will do is ask if the seller can pay for the closing costs or at least a portion of them.
VA Loan Closing Costs List
- VA Funding Fee
- Appraisal Fee
- Origination Fee
- Title Insurance
- Discount Points
- Recording Fees
- Prepaid Taxes & Insurance
- Daily Interest Charges
- HOA Fees
VA Funding Fee: This is a fee that is required on all VA loans. The purpose of this fee is to help protect the VA on a wide scale since the VA insures a portion of the loan in case of default. In most cases the VA Funding Fee is financed into the loan and not paid out of pocket as a closing cost.
VA Appraisal Fee: The VA requires all buyers to get a VA home appraisal when purchasing a new home with a VA home loan. On average the appraisal fee is usually between 400 to 600 dollars.
Origination Fee: Lenders are allowed to charge up to 1% of the loan amount as an origination fee to cover processing and underwriting costs.
Title Insurance: Title insurance protects buyer from leans or any legal problems that may come up after closing.
Discount Points: In many cases buyers have the option to purchase discount points to lower the interest rate. This is something you will want to talk to your lender about if interested.
Recording Fees: State and local governments will record a fee when processing the new purchase documents.
Prepaid Taxes & Insurance: This fee will be different with every property.
Daily Interest Charges: Depending on when your first payment is there may be daily interest charges that will be due at closing. Ask your lender about this.
HOA Fees: Some properties have home owner association fees that may be included in the closing.
For more information on VA loan closing costs call 855-956-4040 to speak with a VA loan specialist that will be more than happy to answer any questions that you might have.