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.
0 Comments
Leave a Reply. |
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
Categories |