Greetings, and welcome to our guide on VA loan non allowable fees. If you’re a veteran or a military service member looking to buy a home, you may have heard of VA loans. These loans are designed to offer affordable and accessible financing options to veterans and their families. However, like any loan, VA loans come with fees that you need to be aware of. Some of these fees are not allowed to be charged to the borrower, which is what we’ll be discussing in this article.
What Are VA Loan Non Allowable Fees?
VA loan non allowable fees are the costs that lenders are not allowed to charge veterans and military service members when they take out a VA loan. These fees are typically third-party fees associated with the closing process of a home purchase. The Department of Veterans Affairs (VA) has issued guidelines that specify which fees are considered allowable and which are not.
What Are Examples of VA Loan Non Allowable Fees?
Some examples of VA loan non allowable fees are:
Non-Allowable Fees |
Description |
|---|---|
Attorney fees |
The borrower is not allowed to pay for the lender’s attorney fees or any other legal fees. |
Courier/mailing fees |
The borrower is not allowed to pay for any fees associated with sending documents or other materials through the mail or courier service. |
Document preparation fees |
The borrower is not allowed to pay for the preparation of loan documents. |
Escrow fees |
The borrower is not allowed to pay for escrow fees. |
Loan closing or settlement fees |
The borrower is not allowed to pay for any fees associated with the closing or settlement of the loan, including notary fees. |
Postage and overnight delivery fees |
The borrower is not allowed to pay for any fees associated with postage, overnight delivery, or courier services. |
Real estate agent commissions |
The borrower is not allowed to pay for real estate agent commissions or fees. |
Why Are There VA Loan Non Allowable Fees?
VA loan non allowable fees are designed to protect veterans and military service members from being charged excessive fees during the homebuying process. These fees can add up quickly and can make it difficult for veterans to afford homeownership. By prohibiting certain fees, the VA is helping to make the homebuying process more affordable and accessible to those who have served our country.
What Happens If a Lender Charges Non Allowable Fees?
If a lender charges a borrower a fee that is considered non allowable by the VA, the borrower can dispute the charge and request that it be removed. If the lender refuses to remove the fee, the borrower can file a complaint with the VA. The VA will investigate the complaint and take appropriate action if necessary.
FAQs
What Is a VA Loan?
A VA loan is a type of mortgage loan that is guaranteed by the Department of Veterans Affairs. These loans are designed to help veterans and military service members buy homes at affordable rates.
What Is the VA Funding Fee?
The VA funding fee is a fee that is charged to borrowers who take out VA loans. The fee helps to offset the cost of the loan guarantee program.
What Are the Benefits of a VA Loan?
Some of the benefits of a VA loan include no down payment requirements, competitive interest rates, and no private mortgage insurance (PMI) requirements.
Can You Use a VA Loan to Refinance Your Home?
Yes, you can use a VA loan to refinance your home. This is known as a VA refinance loan or a VA streamline refinance.
What is the Maximum Amount You Can Borrow with a VA Loan?
The maximum amount you can borrow with a VA loan depends on the county in which you’re buying a home. In most counties, the maximum loan amount is $548,250.
Can You Use a VA Loan to Buy a Second Home?
No, VA loans are designed to be used for primary residences only. You cannot use a VA loan to buy a second home or investment property.
What Credit Score Do You Need to Qualify for a VA Loan?
The minimum credit score required to qualify for a VA loan varies depending on the lender. However, most lenders require a credit score of at least 620.
Can You Use a VA Loan to Buy a Modular or Manufactured Home?
Yes, you can use a VA loan to buy a modular or manufactured home as long as it meets certain requirements. The home must be affixed to a permanent foundation and must meet local building codes and regulations.
Do You Have to Pay Closing Costs with a VA Loan?
Yes, you will have to pay some closing costs when you take out a VA loan. However, some closing costs, such as the VA appraisal fee, are paid by the seller or lender.
What Is the VA Interest Rate Reduction Refinance Loan (IRRRL)?
The VA Interest Rate Reduction Refinance Loan (IRRRL) is a program that allows veterans and military service members to refinance their existing VA loan to a lower interest rate. This is also known as a VA streamline refinance.
Can You Use a VA Loan to Build a Home?
Yes, you can use a VA loan to build a home. This is known as a VA construction loan.
What Is the VA Cash-Out Refinance?
The VA Cash-Out Refinance is a program that allows homeowners to refinance their existing mortgage and take out cash from the equity in their home. This cash can be used for any purpose, such as home improvements, paying off debt, or covering other expenses.
What Is a Certificate of Eligibility (COE)?
A Certificate of Eligibility (COE) is a document that proves your eligibility for a VA loan. You must have a COE before you can apply for a VA loan.
Can You Use a VA Loan to Buy a Condo?
Yes, you can use a VA loan to buy a condo. However, the condo complex must be approved by the VA.
Conclusion
In conclusion, VA loan non allowable fees are important to understand if you’re a veteran or military service member looking to buy a home. By knowing which fees are not allowed to be charged, you can make sure that you’re not being taken advantage of during the homebuying process. Remember to always do your research and compare offers from multiple lenders before choosing a VA loan.
Thank you for reading our guide on VA loan non allowable fees. We hope that you found this information helpful and informative. If you have any questions or comments, please feel free to contact us.
Disclaimer
The information provided in this article is for educational purposes only and should not be considered legal or financial advice. Always consult with a licensed professional before making any decisions regarding your finances or legal matters.