A new Good Faith Estimate went into effect on January 1, 2010 and because of all the requirements that go with any new Government Regulated Form… FHA came out in January with a list of fees they felt like were reasonable for Homeowners to Pay and Lenders to Collect.
Which prompted the VA to come out with a clarification on what Closing Costs they feel are reasonable for a Veteran to pay in connection with a Mortgage Loan! Here’s the latest from the Veteran’s Administration regarding Closing Cost Fees:
One Percent Origination Fee. The lender may charge the veteran a flat fee up to one percent of the loan amount. The flat fee is intended to cover the lender’s costs and services, which are not reimbursable as “itemized fees.” For Interest Rate Reduction Refinancing Loans (IRRRLs), please note that this fee may not exceed one percent of the existing VA loan balance of the loan being refinanced plus the cost of any energy efficient items less any cash payments from the veteran – see line 4 on b. Reasonable and Customary Itemized Fees.
Veterans may pay reasonable and customary amounts for the following services. Whenever these itemized fees relate to services performed by a third party, the veteran may only pay the:
(1) Appraisal and compliance inspections
(2) Recording fees
(3) Credit report
(4) Prepaid items (taxes, assessments, and similar items)
(5) Hazard insurance
(6) Flood determination
(7) Survey
(8) Title examination
(9) Title insurance
(10) Special mailing fees for refinancing loans
(11) Mortgage Electronic Registration System (MERS) fee
(12) Other fees authorized by VA
We love doing loans for Veterans, and encourage you to talk to us about the VA Mortgage Loan Programs available to you! Did you know that it might be to your advantage to make a Down Payment on a VA loan? Call us about VA Mortgage Loans! Steve Thorne, 919-649-5058
We are selling our home FOR $399000 and the buyer is getting a VA loan. They are having to pay a $12000+ funding fee for the loan. They are asking us (seller) to cover all other closing costs which comes to $11200. We think this is unreasonable. What is the customary amount for the sellers closing costs?
Laura – we don’t negotiate contracts, however for North Carolina VA Loan contracts this seems a little high to us. We don’t normally charge an origination fee, which is 1% of the loan amount, and offer the borrower a slightly higher interest rate with no origination fee. Without knowing more about the deal though – I can’t really give you more advice.
I will tell you, though, that if you are being asked to pay the buyers real estate taxes – that could be why it’s so high. Fortunately, you should be getting a refund for that from your current mortgage holder. Taxes in NC are generally accrued from Sept to Sept. and paid between October and Dec.