Posted in Mortgage & Finance, Uncategorized

VA Loans: What’s Allowable and What’s Not

Shortly before closing, real estate agents guide their buyers through the HUD-1 statement. This itemized list of fees helps buyers and agents nail down every last penny of the transactional costs.

A special set of rules applies to VA loan purchases (hint: no pencil sharpening fees allowed). Whether you’re an agent or a potential buyer, make sure you have a solid grasp of allowable and unallowable VA loan fees:

The 1 percent origination fee:

The VA limits the origination fee that a lender can charge a borrower to 1 percent of the loan amount. The origination fee covers a lender’s costs of processing a loan, and can include:

  • document preparation fees
  • processing fees
  • administrative costs of originating your loan
  • applicationfees
  • faxing/mailing fees
  • additional fees involved with loan processing

Additional allowable fees:

The 1 percent origination fee is designed to cover the time and money a lender invests into each loan file. But those aren’t the only costs that a VA loan will incur. Beyond the lender’s origination fee of 1 percent, VA borrowers can be charged for the following items:

  • appraisal fees
  • recording fees
  • credit reportfees
  • prepaid items (taxes, assessments, and similar items)
  • hazard insurance
  • flood determination
  • surveyfee
  • title work and insurance
  • VA funding fee
  • discount points
  • well and septic inspection fees
  • closing protection letter fee
  • additional fees deemed appropriate by the VA

Unallowable VA loan fees:

The VA prevents lenders from charging certain fees to a VA borrower. VA loan recipients can never be charged for the following items:

  • termite/pest inspection
  • attorney fee charged as a benefit to the lender
  • mortgage broker fee
  • real estate agent commission
  • prepayment penalties
  • HUD inspection fees for builders
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Author:

Thank you for being here. I'm a Real estate agent with Keller Williams Signature.I hope that you can visit my website www.jeanethjimenez.com whether you are looking for homes for Sale or buy or just as a source for real estate information.

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