You’ve built a successful career serving in the U.S. military or armed forces. Now, you’re ready to move on to the next chapter of your life of buying a home with a VA loan. The VA loan program offers exclusive benefits to qualifying borrowers such as no money down and low interest rates. But there are some upfront costs involved that every borrower should expect and budget for accordingly. Here’s what you need to know.
Upfront Costs for VA Loans
The upfront costs for buying a home with a VA loan are typically lower than those associated with a conventional mortgage. However, there are still some expenses involved. While a VA loan may not require a down payment, borrowers do have to pay certain fees. Below, we’ve listed all of the upfront expenses involved with a VA mortgage.
VA Appraisal Fee
All VA loans require an appraisal. The appraisal is done to ensure that the home meets the VA’s Minimum Property Requirements and is safe, sanitary, and sound. Borrowers will have to pay a certain cost for this service. This is known as the VA Appraisal Fee. VA Appraisal Fees vary based on the location in which the home is being purchased.
Home Inspection Costs
A home inspection is not required for a VA loan, but it is generally considered a good idea. Your VA appraisal will cover some of the items that are part of a home inspection, but not all of them. A home inspection is more in-depth and thorough than a VA appraisal. According to Home Advisor, the cost of a home inspection is usually about $280 to $401.
VA Funding Fee
All VA borrowers must pay a one-time funding fee. Funds generated from the VA Funding Fee are meant to keep the VA Home Loan program going. The cost of your VA Funding Fee will depend on your loan type, amount, down payment amount, and other factors.
VA Loan Origination Fee
Lenders are allowed to charge up to 1% of the loan amount to cover the costs for origination, processing, and underwriting.
Additional Closing Costs
In addition to the costs listed above, when buying a home with a VA loan, you may also have to pay additional fees such as:
- Title report fee
- Recording fee
- Credit report fee
- Flood certification fee
- Survey fee
- Attorney fees
- Other costs
Learn More About VA Loan Upfront Costs
If you’re interested in buying a home with a VA loan, we welcome you to contact our office with any questions or concerns you may have. Call today to speak with an expert!