VA Loans and Closing Costs - Cost and Rate Questions
VA Mortgage Center.com is here to make the process of obtaining a VA Loan simple and worry-free, while saving you as much money in the process as possible.
If you have questions on today's rates on VA Loans, or questions about other related costs, these vary greatly depending on each unique situation. The best way to have your questions answered is to call us now at 1-800-405-6682 or start our simple contact form below to get in touch with a VA Specialist.
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VA Closing Costs Questions
Please use the links below to find more information about VA Loan costs and rates or go back to FAQ's home.
- Are there costs to apply for a VA Loan?
- Do I get extra benefits for having a service-related disability?
- Do VA Loans have closing costs?
- What is the difference between closing costs and pre-paid items?
- Can the seller pay my closing costs for me?
- Can I buy a home with no money out of pocket?
- How much of a down payment will I need for a VA Loan?
- The seller is requesting earnest money. How does that work?
- What does it mean when items on my good faith estimate are marked with an "S"?
- Is the rate on a VA Loan better than any other loan?
- Does the VA control interest rates?
- Why is my APR higher than my actual rate?
- How much will it cost me to buy my rate down?
- When can I lock in and what does it cost?
- What does it mean when it says the rate is floating?
- Is there a pre-payment penalty on a VA Loan?
- Was your question not answered?
Are there costs to apply for a VA Loan?
No, there are no upfront application fees to get the VA Loan process started. The only possible upfront costs will be for the appraisal. For more information related to getting started with your VA Loan, check out Credit Reports and Scores FAQ's.
Do I get extra benefits for having a service-related disability?
Yes, having a service-related disability allows your lender to waive the funding fee. VA Loans also do not count any medical collections or credit problems against you in the qualification process.
Do VA Loans have closing costs?
Yes, all VA Loans have closing costs of some sort. You may be able to find a loan with no lender fees, but you will still have to pay for title work and other various fees incorporated with the loan.
What is the difference between closing costs and pre-paid items?
Closing costs are costs associated with originating the loan, such as processing fees, origination fees, title insurance, etc. Pre-paid items are costs associated with setting up your escrow account and paying your first year of homeowner's insurance. Pre-paid items also cover any interest your loan will accrue from closing time up until the first day of the following month.
Can the seller pay my closing costs for me?
Yes, the VA allows the seller to pay up to 6% of the closing costs and concessions toward your purchase.
Can I buy a home with no money out of pocket?
Yes, it is possible to get into a home with no money down and no money for closing costs. To do this, the seller has to agree to pay all the closing costs and you have to be approved to get 100%.
How much of a down payment will I need for a VA Loan?
You do not need a down payment for a VA Loan unless the home you intend to purchase costs more than the maximum loan limit. In all other casesl you can get into your home with no money down and often with no money out of pocket. Contact a VA Loan Specialist today to get started on your VA Loan.
The seller is requesting earnest money. How does that work?
Earnest money is something you put down on a home to hold it for you. It shows the seller that you are serious about buying the home. The easiest to look at this money is as a deposit on the house. You put the money down and when you buy the house, you get it back. If you decide later not to buy the house, the earnest money goes to the seller of the house for the seller's lost time and effort, and you do not get it back. If you are putting down earnest money, make sure that it is the right house for you and you have been approved for financing.
What does it mean when items on my good faith estimate are marked with an "S"?
The items marked with an "S" on your good faith estimate (GFE) are items to be paid by the seller. To be valid, the seller must agree to pay these items in the contract: otherwise, you will be responsible for most of these costs.
Is the rate on a VA Loan better than any other loan?
Rates on VA Loans change on a daily basis, just like a conventional loan's rates. Due to this fluctuation, it is hard to say if they are better or not. Many times, the rate on a VA Loan will be lower than that of a conventional loan.
Does the VA control interest rates?
No, the VA does not control interest rates. The rates are controlled by private investors buying and selling mortgage bonds. They change and differ on a daily basis just like conventional rates.
Why is my APR higher than my actual rate?
The rate reflected on the APR shows the cost of the credit as a yearly rate. This rate is generally higher than the rate stated on your mortgage note because, in addition to the interest rate, the APR includes other costs, such as origination fee, loan discount points, pre-paid interest, and mortgage insurance. In addition to the interest rate, the APR allows you to compare the total cost of financing your loan among various lenders.
How much will it cost me to buy my rate down?
Depending on the market at the time you want to buy down, buying down your rate can be more expensive one day and less the next. Ask your loan officer for more information on buying down the rate. and he or she can tell you more information based on the market that day.
When can I lock in and what does it cost?
You will not be able to lock in your rate until you have a contract on a property or, in the case of a refinance, until all your paperwork has been returned to your loan officer for verification. It does not cost anything to lock in unless you want to lock in for an extended period of time (over 60 days), in which case a small fee will apply.
What does it mean when it says the rate is floating?
Floating a rate means your rate is not locked in and can float up and down depending on the market. If you are ready to lock in, let your loan officer know, and he or she can lock you in at the best rate that day. The main reason your loan officer would float your loan is because he or she may have reason to believe the rates will drop in the next few days, allowing you to receive a lower rate.
Is there a pre-payment penalty on a VA Loan?
No, there is no pre-payment penalty on a VA loan. You are allowed to pay off the loan at any time without a penalty.
VA Loan Specialists
If you have questions or if you want to determine if a Veteran Home Loan is actually the best financial decision for you, you may get advice from a VA Mortgage Specialist online or call 800-405-6682.
