VA home loans are available to active military and veterans. They are possibly the best loans available today because they offer 4 major benefits. 100% financing with no down is payment required
The loan is a 30 year fixed interest rate. Interest rates are close to the lowest they have EVER been. VA loans are not credit score driven and have flexible underwriting guidelines to get active military and veterans qualified. VA loans do NOT have monthly mortgage insurance, unlike FHA loans, or conventional loans with less than 20% down.
range from 2-4% of the purchase price. VA allows the seller to pay up to 4% of the VA buyers closing costs so it is smart to ask the seller to “credit” you at least 3 % of the closing cost to reduce your out of pocket expenditure.
VA loans do NOT have monthly mortgage insurance, unlike FHA loans, or conventional loans with less than 20% down
Though it is optional to get an inspection on the house with a VA loan, it is highly recommended. The cost is on the buyer and usually run about $300 paid upfront. The inspector will check all aspects of the house, the structure, electrical, plumbing and more, so that you know you are making a sound investment.
The buyer will have to pay for a home inspection. Though optional for a VA buyer, it is highly recommended to have a home inspection. As an independent 3rd party the inspector will inspect all aspects of the house such as the structure, electrical, plumbing and more. It is so that you know you are making a sound investment. Home inspections generally run about $300. This has to be paid up front by the buyer.
Though it is optional to get an inspection on the house with a VA loan, it is highly recommended. The cost is on the buyer and usually run about $300 paid upfront. The inspector will check all aspects of the house, the structure, electrical, plumbing and more, so that you know you are making a sound investment.
And lastly, you will have to pay of the VA appraisal. When you purchase a property the lender will require an appraisal on the property, this has to be ordered right away in the purchase of property. A VA appraisal current costs $400. So to recap, in the beginning stages of buying a house, you will have to come up with an earnest money deposit, $300 for a home inspection and $400 for an appraisal.
Title and Escrow Fees When you “close” your house, it will be handled by an escrow company. They will have a variety of fees to handle closing such as an escrow fee, and notary public fee. These fees will have to be included in the credit that you ask for from the seller and can amount to over $1,000 on average. When you buy a house you will be required to obtain title insurance. There are 2 title policies you must have, an owners and lenders policy. The seller will typically pay for the owners policy and the buyer will pay for the lenders policy. The cost of title insurance depends on cost of the property. For a $300,000 house the fee will probably be around $400.
When you buy a house, the closing is handled by an escrow company. There fees are an escrow fee, notary public fee, and a few other fees for handling the closing. These fees will not have to be paid by the VA borrower, but they will have to be included in the credit that you ask for from the seller. These fees can amount to on average over $1,000. Additionally when you buy a house you will be required to obtain 2 title insurance policies, owners and lenders. The seller will typically pay for the owners policy and the buyer will pay for the lenders policy. The cost of title insurance depends on cost of the property. It will be around $400 for a $300,000 house.
Lender Related Fees The lender has fees involved with processing, underwriting and originating your loan. There is generally an underwriting fee, processing fee, credit check fee and possibly an origination fee. The VA borrower is not allowed to pay for the underwriting and processing fee, so as mentioned above, these fees will have to be paid for by the seller. The origination fee can vary depending on your interest rate. Generally if you want to lock in the lowest interest rate, a lender can charge up to 1% of the loan amount as an origination fee. Additionally, if you want to buy down the interest rate below market, you can pay discount points to get an even lower than market rate.
Pre-Paid Interest on the Loan. When you get a VA home loan, you will have to pay the interest on the loan from the day you close until the end of the month. So for example if you closed on your new home May 5th, you would owe interest on the loan from May 5th to May 31st. This is called pre-paid interest and is part of your closing costs. But then your first payment would not be until July 1st. So you essentially get to skip the June payment even though you move in the house May 5th. The reason for this is because mortgage payments are made in arrears or behind . You made your May payment as part of your closing costs, and you wont make your June payment until July 1st. It can be advantageous to time your closing at the end of the month, so you limit the pre-paid interest and reduce your overall closing costs.
The VA lender will require you to pay an entire 12 month homeowners insurance policy in advance. To insure against fire and other disasters, all lenders require that you keep a homeowners policy on a property. Paying 12 months in homeowners insurance up front can total between $400 to $1,000 or more. Please call your insurance agent for a quote. The cost will depend on where your property is located and the purchase price
The VA lender will require you to pay an entire 12 month homeowners insurance policy in advance. All lenders require that you keep a homeowners policy on a property if there is a mortgage on it to insure against fire and other disasters that could damage your house. Paying 12 months in homeowners insurance up front can total anywhere from $400 to $1,000+. Please call your insurance representative for a quote. The cost will depend on where your property is located and the purchase price.
VA Funding Fee The VA charges a 2.15% funding fee for VA borrowers using their VA eligibility for the 1st time and 3.3% for those using it for the 2nd time or subsequent times. If you have 5% or more down payment, this funding fee is less than the above stated percentages. Also, if you have a 50% or greater VA disability rating the funding fee is completely waived. VA allows this fee to be rolled into your loan. You do NOT have to come out of pocket for this fee.
It is very important to either plan to set aside for these costs or work with the real estate agent to represent you and negotiate with the seller to pay for your closing costs.