Buying a Home with a VA Loan: Maximum Seller Concession

Mar 14, 2021 | VA Loans

Buying a home with a VA loan is a great way to save money on interest payments, eliminate your down payment requirements, and help you get into the home of your dreams quickly. But as with any loan, there will be fees that you’ll need to cover before you can close on the property. Though some of those fees are your responsibility, others may be covered as a part of the seller’s concessions. Here’s what you need to know about seller concessions as they pertain to VA home loans.

What Are Seller Concessions?

The seller’s concession is the portion of your closing costs that the seller agrees to pay to help move the deal along. But the concessions they cover aren’t included in the usual closing costs. Seller concessions could cover your VA funding fee if you’re buying a home with a VA loan. But the concessions can also be items that the seller agrees to leave behind like appliances, furniture, and other touches. These items have monetary value and thus can be factored into the concessions they offer.

The Maximums Allowed When Buying a Home With a VA Loan

There is a maximum that sellers are allowed to cover as a concession and it’s a percentage of the home’s appraised value, not the listing or sale price. Currently, the maximum allowed is 4% of the value of the property.

If you’re thinking of requesting concessions when you make an offer on a property, the best thing you can do is speak to your real estate agent and mortgage lender about your options. They’ll be able to help you maximize your savings when you make the offer so you can keep more of your hard-earned money in your bank account. Any concessions that are greater than the appraised value of the home will need to be dismissed. Keep in mind that you’re not required to ask for concessions. It’s up to you.

Ready to Learn More?

If you’re thinking about buying a home with a VA loan, you need to fully understand your options to make the best decision for your finances and your budget. Contact the experienced mortgage brokers at Mortgage Solutions Financial and let them guide you through the process. Our team understands the nuances of VA home loans and can help you find the best loan for your needs, navigate the concessions negotiations, and make sure you’re getting the right house with a loan you can afford to pay off in full.

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