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Question concerning closing cost. I just received my good faith estimate for a VA loan.?
Can someone explain to me what closing cost I SHOULD be paying as a VETERAN in GEORGIA and how MUCH I should be paying? Also, how do I go about negotiating the closing cost? Another note is that I am a disabled veteran rated over 30%. I know that some will try to take advantage of new home buyers and those not up to speed on all the terminology of the mortgage field. I would just like to make sure that I do not end up paying more than I should just cause I was not educated before hand.....Thanks!
- Holly RLv 41 decade agoFavorite Answer
Often, veterans believe that closing costs are covered by a VA mortgage. This not technically true...however, the same effect can be reached through careful structuring of your real estate contract. The loan amount will be the purchase price or appraised value, whichever is less (plus the VA Funding Fee). So if you want your closing costs covered by the loan, you need to increase the price and have a stipulation with the seller will pay the closings costs and pre-paid expenses equal to the amount by which you have increased the price. As long as the home appraises for the increased price, you will have the closing costs paid as part of the deal. Closing costs and pre-paid expenses can vary widely with 3% - 5% as the range for most places.
You will probably be paying for the following items:
Appraisal, Title Insurance, Flood Determination, State Recording fees (and release fees), possibly a survey, the VA funding fee and maybe a few others. The biggies are the Appraisal ($300+ dollars) and the title insurance (dependent on the price of the house). The others are all $15-$50 each..Surveys are expensive too, but you can often get away with not doing one. You may also be credited pro rata taxes for the rest of the year. I just closed a smaller sale ($60,000) and closing costs were $1300.
- godgedLv 71 decade ago
It can be confusing, so make sure you are using a lender that will not fire a bunch of mortgage loan jargon at you and explains everything that you are signing up for.
I just had a couple look at a VA loan, a broker got them into a different loan that was a better program for them than VA. This is someone who is a local lender, loves his work, and is really meticulous about what he does.
There is some room for negotiating the closing costs with some lenders, but with VA, some of these will be fixed.
What you SHOULD be paying is about 3% of loan amount. That is strictly an industry guide and can vary greatly by lender. Good on ya for checking about closing costs, many FTHB are only considering rate and ignore things like closing costs and pre-payment penalty.
Thanks for serving and good luck with your home purchase.Source(s): Oregon Realtor
- Anonymous1 decade ago
I'll be honest, I don't know all the in's and out's of a VA loan. But I do know that you should be receiving special discount due to your disability. If you aren't sure about some of the charges, ask the closing company to go over them with you if you aren't using a Realtor. No problem, about your level of education, you deserve to be taken care of. Period!