Veteran home loan mortgages are one of the greatest benefits a Veteran has. They offer 100% financing, with no mortgage insurance and fairly easy qualifying guidelines. Like most everything else the Government does, there are some “quirks” to the program.
We are helping a Rookie Agent with a closing… and we are answering MULTIPLE questions about what costs the Seller MUST pay on a VA loan.
Here’s the Deal… WE don’t charge fees that use to be called “Junk” Fees – so the Veteran and the Seller don’t need to worry about it.. but if you are dealing with a company that DOES, here are the rules.
APPRAISAL AND COMPLIANCE INSPECTIONS
The veteran can pay the fee of a VA Appraiser and VA compliance inspectors. The veteran can also pay for a second appraisal if they are requesting a reconsideration of value, only if THEY are the ones requesting the reconsideration. The veteran can NOT pay for the builder inspections charged during construction. They CAN pay for a HOME Inspection as long as it is reasonable and normal for the buyer to pay that fee (which it is in NC).
The veteran can also pay for recording fees or other fees that directly relate to recording of the closing documents.
The veteran can pay for the credit report – but it must be shown as a credit report fee (like the appraisal must be shown as an appraisal fee). The Veteran can not pay for an “application fee.”PREPAID ITEMS
The veteran can pay their part of taxes, assessments, and similar items for the current year including the amounts needed to create an Escrow Account.
The veteran can pay for homeowner’s or hazard insurance premium. This can also refer to flood insurance, if it is required.
FLOOD ZONE DETERMINATION
The veteran can pay the actual amount charged for a flood certification. This is a thrid party fee charged to determination of whether a property is in a special flood hazard area.
The Seller pays for the Termite report
The veteran can pay a charge for a survey, though we don’t always require this for VA loans. It will depend on the seller’s ability to provide a survey.
TITLE EXAMINATION AND TITLE INSURANCE
The veteran may pay a fee for title examination and title insurance. In most cases, the ATTORNEY FEE will be shown as a Title Examination Fee in NC. Although this has been updated, some underwriters still do not want to see a Veteran pay for an ATTORNEY Fee.
SPECIAL MAILING FEES ONLY FOR REFINANCING LOANS
Only in the case of refinancing a loan, the veteran can pay charges for Express Mail or a similar service.
Veterans can NOT pay for Commitment Fees, Underwriting Fees, Processing Fees – or the like. If a Lender also charges for Tax Service Fees, those would be charged to the Seller.