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Understanding the Fee's Associated with a VA Loan

As we prepare to celebrate Veterans Day, we think of the millions of men and women who served our country with honor and dignity. At Stearns Lending, we believe our veterans and their families deserve to have a safe, warm home they can call their own.

 
Fortunately, the U.S. Department of Veterans Affairs (VA) makes it possible for qualified veteran homebuyers to purchase a primary residence with no down payment, up to the conforming loan limit. For loans greater this limit, up to $2,000,000 can be financed with an approved VA loan with a down payment.
 
In most cases, the veterans classification includes active duty military, veterans, reservists and military widows/widowers.1 With lower interest rates (typically), flexible qualifications and fewer fees, VA financing is an attractive option. Let’s take a look at which fees are allowed and which ones cannot be charged by your lender.
 
According to VA guidelines, the following fees may be incurred:  
  • VA appraisals and compliance inspections
  • Recording fees
  • Prepaid hazard insurance
  • Flood zone determination
  • Title examination and title insurance
  • VA funding fee (unless veteran is exempt)
  • Other fees authorized by the VA:
    • Lender’s 1% flat charge
    • Average 3% flat charge for construction loans
    • Reasonable discount points
    • Endorsement title recording
 
There is also a long list of fees that are NOT allowed, including:
  • Lender attorney fees
  • Prepayment penalties
  • Private Mortgage Insurance (PMI)
  • HUD/FHA inspection fees for builders
  • Lender’s appraisals and inspections, except for construction loans
  • Loan closing or settlement fees
  • Document prep fees
  • Interest rate lock-in fees
  • Escrow fees or charges
  • Trustee’s fees, charges for loan application or processing fees
  • Fees for preparation for Truth-In-Lending (TIL) disclosures
  • Fees charged by real estate brokers or other third parties
  • Tax service fees
 
Stearns Lending is committed to increasing home ownership among veterans and we’d love to help you next. Contact one of our friendly and knowledgeable loan officers today!
 
 
1 Most members of the military, veterans, reservists and National Guard members are eligible to apply for a VA loan. Spouses of military members who died while on active duty or as a result of a service-connected disability may also apply. Other conditions and requirements apply. Ask your Stearns Lending Mortgage Loan Officer (MLO) for details.

 
- By Stephanie Clark , Nov 08, 2018



 
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