Written by - February 19, 2023
What Fees are Buyers Not Allowed to Pay on VA Loans?
If you're considering buying a home with a VA loan, you're probably looking to save as much money as possible. One way to do that is to avoid paying certain fees that are not allowed on VA loans. This guide will help you understand what those fees are and how you can avoid them.
I. IntroductionBefore we dive into the specific fees that are not allowed on VA loans, let's review some basics. VA loans are designed for active-duty military members, veterans, and surviving spouses who want to buy a primary residence. These loans are guaranteed by the federal government and typically come with lower interest rates and more flexible terms than conventional mortgages.
II. What Fees Are Not Allowed on VA Loans?While VA loans have many benefits, there are some fees that are not allowed. These include:
III. How to Avoid These FeesOne of the best ways to avoid paying these fees is to work with a mortgage company that specializes in VA loans. Mortgage Brokers Pro , for example, offers VA loans with no origination fees, no application fees, and no points. This can save you thousands of dollars over the life of your loan.
IV. Brokerage Fees or Real Estate CommissionsOne of the biggest expenses when buying a home is the real estate agent commission. In most cases, the seller pays this fee. However, in some situations, buyers may be asked to pay part or all of the commission. This fee is not allowed on VA loans, so be sure to negotiate with the seller to have them pay the commission.
V. Document Preparation FeesDocument preparation fees are charged by lenders to cover the cost of preparing loan documents. These fees can range from a few hundred to a few thousand dollars. However, these fees are not allowed on VA loans. You can avoid them by working with a lender who does not charge these fees.
VI. Tax Service FeesTax service fees are charged by lenders to ensure that property taxes are paid on time. While these fees may only be a few hundred dollars, they are not allowed on VA loans. Be sure to ask your lender to waive this fee.
VII. Loan Closing or Settlement FeesLoan closing or settlement fees are charged by lenders to cover the cost of processing your loan. These fees can range from a few hundred to a few thousand dollars. However, these fees are not allowed on VA loans. Be sure to work with a lender who does not charge these fees.
VIII. Application FeeApplication fees are charged by lenders to cover the cost of processing your loan application. While these fees may only be a few hundred dollars, they are not allowed on VA loans. Be sure to work with a lender who does not charge these fees.
IX. Escrow FeesEscrow fees are charged by the lender to cover the cost of holding funds, such as property taxes or insurance premiums, in an escrow account. While these fees may only be a few hundred dollars, they are not allowed on VA loans. Be sure to ask your lender to waive this fee.
X. ConclusionBuying a home with a VA loan is a great way to save money, but it's important to understand what fees are not allowed. By working with a mortgage company that specializes in VA loans, like Mortgage Brokers Pro , you can avoid paying unnecessary fees and save thousands of dollars in the process.