VA mortgage loans are one of the greatest benefit a soldier has. They offer 100% financing, with no mortgage insurance and fairly easy qualifying guidelines. For more information on qualifying for a VA home loan, please click here. Like most everything else the Government does, there are some "quirks" to the program. We are helping a Rookie Agent with a closing... and we are answering MULTIPLE questions about what costs the Seller MUST pay on a VA loan. Here's a fairly comprehensive list of who can pay for which items as shown on the HUD1 Settlement Statement...
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, only if THEY are the ones requesting the reconsideration. The veteran can NOT pay for the builder inspections charged during construction. They CAN pay for a HOME Inspection as long as it is reasonable and normal for the buyer to pay that fee (which it is in NC).
RECORDING FEES
The veteran can also pay for recording fees or other fees that directly relate to recordation of the closing documents.
CREDIT REPORT
The veteran can pay for the credit report - but it must be shown as a credit report fee (like the appraisal must be shown as an appraisal fee). The Veteran can not pay for an "application fee."
PREPAID ITEMS
The veteran can pay their part of taxes, assessments, and similar items for the current year including the amounts needed to create an Escrow Account.
HAZARD INSURANCE
The veteran can pay for homeowner's or hazard insurance premium. This can also refer to flood insurance, if it is required.
FLOOD ZONE DETERMINATION
The veteran can pay the actual amount charged for a flood certification. This is a thrid party fee charged to determination of whether a property is in a special flood hazard area.
TERMITE REPORT
The Seller pays for the Termite report
SURVEY
The veteran can pay a charge for a survey, though we don't always require this for VA loans. It will depend on the seller's ability to provide a survey.
TITLE EXAMINATION AND TITLE INSURANCE
The veteran may pay a fee for title examination and title insurance. In most cases, the ATTORNEY FEE will be shown as a Title Examination Fee in NC. The Veteran CAN NOT pay for an ATTORNEY Fee.
SPECIAL MAILING FEES ONLY FOR REFINANCING LOANS
Only in the case of refinancing a loan, the veteran can pay charges for Express Mail or a similar service.
Veterans can NOT pay for Commitment Fees, Underwriting Fees, Processing Fees - or the like. We also charge the SELLER for Tax Service Fees. For a comprehensive detail of Seller Concessions, and the way VA calculates same, please click here.
If you are considering a purchase, and want to know more about qualifying for a VA mortgage loan, please call Steve and Eleanor Thorne, Govenment Mortgage Loan Experts, 919-649-5058
Good information for any agent or consumer using VA - especially if they haven't done one in a while. Thanks, Eleanor, for commenting on one of my posts recently.
E, thanks this is the one program that I am sorely lacking any real solid feel good experience with..... maybe it is the amount of time on my part to become proficient with this program. I will again make an larger effort to get with a VA specialist and get up to speed on this program. Thanks
Great job breaking this down for everyone Eleanor!
Your posts are always informative and easy to digest.
Thank you!
After reading this it has shed some light on my situation. I own a house in a retirement village in Florida. I am the son of the actual homeowner but the house is in the name of a trust, this is irrelevant. There is a buyer who does want the house however we are running into snags with this man. He is going for a VA loan however this is his 3rd place in which hse is dealing. I was just told by my realtor that he has the paper in his hand asking for an extension on the closing for which we had already signed a contract, today was that closing date Feb. 23 2009. In addition we are to pay all of the closing costs for this buyer according to the realtor and do you know if this includes his realtors fees? How true is all this please let me know. Thank you in advance.
Mr. Golubow: If you negotiated to pay for closing costs, then that's part of the contract. The notes in the post speak to the specific fees that VA requires a seller to pay (not up for negotiation). Has an appraisal been done on the property? VA decides who the appraiser is. I would at least ask why he is "bouncing" from lender to lender... is it to get a better rate, or is it because of some other qualifying problem?
Eleanor, how about the termite inspection? Who typically pays that?
Seller pays the Termite report too! Thanks, I'll update the post to include that!