All mortgages come with closing costs, and VA loan is no exception. Unlike conventional loans, VA loan has a limited closing cost, which could be anything between 3 to 5 percent of the loan amount. Though some of the closing costs may be paid by the seller, a veteran buyer must still be aware of the major closing costs that are involved in the home loan process. In this blog post, we discuss four main home loan closing costs a veteran needs to pay before they get the key to their dream home.
Appraisal Fee The appraisal fee is a non-refundable closing cost that buyer needs to pay upfront. The amount to be paid varies by the type of home (single-family, condo, manufactured home) and the state where it is purchased. The appraisal fee in Texas, for instance, is $459, which is $10 more than what you pay for in Oklahoma. The average appraisal fee for a single family home could be between $400-$450 and is paid once the VA-certified appraiser evaluates the home and submits the appraisal. Credit Report Fee The credit report fee could be between $50-$65, and most of the lenders demand for the payment as soon as the buyer applies for the loan. Lenders refer to the report to check the middle score of the borrower before qualifying the loan. The report usually includes credit scores from Experian, Transunion and Equifax. Similar to appraisal fee, credit report fee is non-refundable, even if the veteran never closes the loan. Title Insurance A title insurance protects the homeowner and lender from a situation where someone else could claim the right to the house and win the legal battle after closing. The insurance is issued by a title company after verifying that there are no unsettled liens against the property. The average fee of title insurance could be between $600 to $800, and might vary depending on the loan amount and regional insurance rates. Origination Fee Origination fee is usually 1 percent of the loan amount and is charged by the lender to cover the administrative expenses incurred during the processing of the loan. The lender has the to option to charge this as a flat fee or itemize the expense while ensuring that it doesn’t exceed 1 percent. The itemization would include:
Final Words Survey fee, recording fee and flood certification, are a few more fees the veteran might need to pay at the time of closing. Depending on the terms of purchase contract, the seller has the right to pitch in to pay for all or a part of the closing costs in behalf of the buyer. The amount of closing fees varies depending on the lender and the price of the property, and the lender provides a Good Faith Estimate to explain the cost of the loan in detail.
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VA loans enable military service professionals, surviving spouses, and veterans to become homeowners. The government-backed loans have significant benefits and allow eligible borrowers to purchase a home without shelling out a lot of money from their pockets. Both first-time and experienced military homebuyers who apply for VA loans require some preparation for the hassle-free experience. The blog post discusses five important tips that can prepare you to apply a Texas veteran home loan and also prevent mistakes. Let’s take a closer look. Start Without a Certificate of Eligibility The VA loan process doesn’t require you to have the Certificate of Eligibility. In fact, you can choose to start the procedure without this certificate and provide the COE a little later. A Certificate of Eligibility, undoubtedly, provides you a proof of your benefit, but the absence of a COE should not prevent you from getting in touch with a VA approved lender. Look for a VA Savvy Agent VA home loans are government backed loans for those who risked and sacrificed their lives to serve our country. Take the help of experienced lenders and real estate agents who are familiar with the specialized home loan scheme. Taking the help of an expert ensures that you stay away from properties that could lead to problems in the long run. Check Your Credit Report Thoroughly Your credit report plays a significant role in helping you to get a VA home loan. As a result, it is necessary to thoroughly examine the report for any errors and late payments. The reason is, credit reports may contain some serious errors that may prevent eligible candidates from getting a home loan. Go for Home Inspection Buying a home is, undoubtedly, one of the biggest investments and require careful consideration. Inspect the home thoroughly to ensure that there are no problems lurking in the property. Apart from clarification, home inspection also allow you to negotiate with the seller, if there are issues in the house. Though home inspection is not mandatory, but it is a helpful tip for a smart purchase. Pre-approval is Beneficial Getting a clarity of the type of property you can afford and how much the lender can provide brings in more transparency when applying for home loans. Pre approval is important if you want to show the sellers that you are a serious candidate. A prospective VA home loan candidate with a preapproval letter is always welcome by real estate agents. Bottom Line Buying a home with VA loan provides a range of benefits. VA loans are easy to get and have a lot of benefits, provided you take the help of an expert and have all the necessary information related to the loan. The process, however, can bring in moments of uncertainty. The five tips mentioned in the blog can help you prepare yourself before applying for a VA loan. |
AuthorDarrick encourages readers to post issues that need immediate attention in terms of home buying; such interactions will enhance reader engagement and provide a road-map for others Archives
November 2017
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