Hey everybody. It’s Jimmy Vercellino, your Marine Corps Veteran, Mortgage Originator, specializing in VA loans.
Today, I want to talk about VA loan and closing costs. Does the VA loan have closing costs? I feel like I get this question all the time. We know that a VA loan doesn’t have any money down, but does it have any closing costs? And the answer is, (you ready for this?) YES! In fact, not necessarily the VA loan that has closing costs.
It’s purchasing a home that has costs associated with the transaction, regardless of whether or not you’re using an FHA loan, regardless if you’re using a conventional loan or even a VA loan. There’s always going to be costs associated with purchasing a home to include a VA loan. So let’s talk about some of those costs in conjunction with the loan and who can pay them. That’s one of the things that I’ve had a conversation about with Real Estate professionals for many years and veteran’s for many years. It’s like, well, wait a second, can the veteran pay for the costs associated with the loan? And the answer is yes, they can.
They can pay for all of the costs. Let me repeat that. The veteran can pay for all of the costs in conjunction with a VA loan. So long as, like the way I slid that in there? So long as they’re not paying a loan origination point.
So, in other words, the mortgage lender, they were charging the veteran a loan origination point. They can’t charge them for things like processing, application, underwriting, doc preps, settlement fee, etc., because they should be included in this loan origination.
But if I’m not charging the loan origination, well now I can charge the veteran for all of these costs in conjunction with the loan. And in my experience, very few mortgage lenders tend to charge a loan origination anymore. Good to go? Quick recap. A veteran can pay for all of the costs in conjunction with a purchase utilizing their VA home loan benefit. Good to go? So if you have more questions about how a VA loan works, and remember that the VA loan doesn’t require any money down, but it doesn’t necessarily mean that you, as a veteran, don’t have to pay any costs in conjunction with the purchase. There’s still costs from title, escrow, appraisal, the mortgage lender that’s originating the loan, title insurance, pre-paid interest, taxes, insurance. All of those things are still going to be there regardless if you’re utilizing a VA loan, conventional or FHA.
Good to go? My name is Jimmy Vercellino. For more questions about VA loans and closing costs and who pays them, my team and I are here to be a resource for you.