When you’re buying a home, there are a lot of different costs that come into play. In addition to the price of the home itself, you also have to worry about things like closing costs, moving costs, and other associated expenses.
One type of cost that you may not be familiar with is a VA loan closing cost. These costs can add up, so it’s important to be aware of them before you start the home-buying process.
What Are VA Loan Closing Costs?
If you’re a Veteran or service member looking to buy a home, you may be wondering what VA loan closing costs are. In short, these are the fees associated with getting a VA loan. The good news is that, as a Veteran or service member, you’re not responsible for most of these fees. In fact, the VA actually limits how much lenders can charge in closing costs.
However, there are still a few fees that you may be responsible for. Cape Coral VA loans have closing costs that are charged by the lender at the time of closing. These fees can vary depending on the lender and the type of loan you’re getting, but they typically range from 1-5% of the loan amount.
So, on a $200,000 loan, you could be looking at $2,000-$10,000 in closing costs. These costs are in addition to the down payment and any other fees associated with getting a mortgage.
What Do VA Loan Closing Costs Cover?
VA loan closing costs can cover a variety of different things, including:
- Origination Fees: These are fees charged by the lender for processing the loan.
- Discount Points: Discount points are a type of pre-paid interest that can lower your interest rate.
- Appraisal Fees: An appraisal is required in order to get a VA loan, and the fee for this service is typically rolled into the closing costs.
- Credit Report Fees: The lender will pull your credit report as part of the loan process, and the fee for this service is usually included in the closing costs.
- Loan Origination Fee: This is a fee charged by the lender for processing the loan. It can range from 0.5% to 1% of the loan amount.
- Title Insurance: This type of insurance protects the lender in case there are any problems with the title of the property.
- Homeowner’s Insurance: This insurance protects the home from damages such as fire or theft. The premium for this insurance is typically included in your monthly mortgage payment.
How Are VA Loan Closing Costs Different from Other Types of Loans?
When it comes to closing costs, VA loans are different from other types of loans in a few key ways.
For one, with a VA loan, you can ask the seller to pay a portion of the closing costs. This can include up to 4% of the loan amount in certain cases. This is a huge benefit for buyers, as it can save them thousands of dollars at closing.
Another key difference is that VA loans allow borrowers to roll their closing costs into the loan. This means that the borrower doesn’t have to come up with the cash to pay for closing costs at the time of closing. Instead, the costs are spread out over the life of the loan.
Overall, these key differences make VA loans much more advantageous when it comes to closing costs. If you’re a veteran or active duty service member, be sure to take advantage of these benefits when you’re ready to buy a home.
Overall, it’s important to be aware of all the fees and costs associated with buying a home, especially if you’re taking out a VA loan. This will help you budget for your home purchase and ensure that you’re not surprised by any unexpected costs.
Contact Your Trusted Mortgage Specialist Today!
If you’re thinking of taking out a home loan in Cape Coral, you need to find one that fits your budget. Luckily, American Mortgage Solutions is here to help you with that, contact us today at (502) 327-9770 for Louisville KY Office and for Cape Coral FL Office (239) 766-8344. As one of the top-rated mortgage brokers in the area, we work with the best lenders and help you find the most suitable loan programs for your needs. Request a free quote today and get the financing you need to buy your dream home! We are licensed in multiple states, including Kentucky, Florida, Tennessee, Indiana, Colorado, and Missouri.