One of the great things about the VA loan program is that there are limitations on the "junk" fees allowed by the way to be passed on to the borrower. One item of note is that the VA does not regulate the interest rate or discount points on this program. It is important to compare the pricing on the loan, as well as charges by third party providers.
Here are a basic list of allowable and non-allowable closing costs for VA Loans*:
VA Allowable Closing Costs
-Discount Points
-Title exam fee, including tax and assessment search
-Flood Cert.
-EXACT amount charged for appraisal and credit report
-Attorney or Settlement agent fee
-Title insurance policy
-Pest inspection (must be paid for by seller unless veteran agrees in writing to pay for it)
-interim interest
-First Year Hazard Insurance Premium(and flood insurance if applicable)
- Tax and insurance escrows
Non Allowable VA Closing Costs
-Tax service fee
-Application fee
-Document Preparation fee*
-Underwriting fee*
Once again, the VA loan program is a great way to provide financing for Veterans.
Michael Byrne
*The doc prep fee and u/w fees can be charged to the seller. Charges can vary by state and subject to guideline changes by the VA.
Michael Byrne
Mortgage Specialist
NJ Mortgage Banker USDA Loans Jumbo Loans FHA Loans VA Loans my site
Zillow Blog My Blog stated income loans Loan Officers: Do More Loans
Foreign National Mortgage Financing Rehab Loans Conforming Jumbo Loans
Co-Op Financing Union Plus Mortgage Super Jumbo Loans Harp Loans
"A referral is the greatest compliment I can receive"
Another great post simplifying the VA process! Thanks Michael!
Remember VA does allow lenders to charge up to 1% as an origination fee to make up for the non-allowables. Most of the time though you are better off negotiating the seller pay costs and leaving your veteran with better cash reserves after closing!
Gerry Suarez, Jr.
Your HUD Loan Pro!