No matter what type of mortgage you get, you will have to pay closing costs. If you are currently considering a VA loan, you may wonder how much the fees will cost in all. If you are wondering about this, it might be helpful for you to see a breakdown of some of the primary fees you will have to pay with a VA loan.
When you choose a VA loan, you will have a funding fee to pay. The funding fee helps the Department of Veterans Affairs continue the VA loan program, and the fee is anywhere between 1.4% to 3.6% of the loan amount. You must pay this fee when taking a VA loan, and you can find out how much it would be for your loan by talking to a mortgage lender. Lenders base the right on specific categories and guidelines, and it is generally lower when you take your first VA loan and have money for a down payment.
When you take a VA loan, the Department of Veterans Affairs is not the entity that issues you the loan. A mortgage lender is an entity that provides you with a loan, and the lender charges a fee for this service. The fee is equal to 1% of your loan amount, and lenders call this a loan origination fee. Lenders cannot charge more than 1% for this fee with VA loans. They can charge higher rates for other loan programs, though.
Inspection Fees and Other Charges
Additionally, you will have to pay for a variety of other things, too. For example, you must pay to have the house appraised, which may cost around $500. You must pay for a home inspection, which may cost up to $500. You may also have to pay for other inspections that the lender requires. There are other fees, too, such as expenses for pulling your credit report and for title work.
The Total Amount to Expect to Pay
If you add up all these costs, you will likely pay around 3% to 5% of the loan amount in closing costs. If your loan is $200,000, this would add up to $6,000 to $10,000. Using this estimate is an effective way to plan for the VA loan closing costs.
If you have questions about closing costs or anything else, talk to a mortgage lender of your choice in your area.