VA Mortgage Loan Closing Costs in Texas: Things You Should Expect
The loans guaranteed by the Department of Veteran Affairs of the U.S. Government, often called as VA Loans, do not require the borrower to pay for any down payments. However, if you are taking a VA Loan then you would have to pay for closing costs or you should have enough seller or lender credits to cover for those fees. Texas has over a million veterans, so it is only natural that the Lone Star State would also have a large number of VA Loan applicants. If you are looking for a VA Loan in Texas, then it is always better to get a clear idea about VA closing costs in Texas. On bigger, more expensive homes, the closing costs average around 1% to 3% of the loan amount and for less expensive homes, the closing costs are around 3% to 5% of the loan amount.
However, you do not need to pay anything out of pocket. The seller is allowed to pay all of the closing costs. In most cases, you just need to tell your real estate agent that you are taking a VA loan to buy the property and your agent might request the seller to pay for your closing costs.
Types of VA Closing Costs
Given below are some of the fees that you might expect to pay as closing costs in Texas. You must keep it in mind that the costs vary greatly based on the location of the property and certain other factors. Therefore, it is always a great idea to get in touch with a VA Loan Specialist in Texas to get a clear idea about the fees you would need to pay.
The Closing Costs can be divided into two groups – VA fees and lender fees and third party fees
VA Fees and Lender Fees
1% Origination Fees
The Department of Veteran Affairs offers the lender a sort of compensation through the origination fee. The Department however caps the fee at 1% of the loan amount. The lender cannot charge you any fees like underwriting fees and processing fees, if they have already charged you an origination fee.
VA Upfront Funding Fee
This fee is charged by the Department of VA to defray the cost of the program. You would be paying the fee directly to the Department. Now, either you can pay this fee upfront, or you can roll it into your loan.
Discount Points - Putting it in simple words, when you pay for a discount point, you are paying to lower your interest rate. It is different from the origination fees, as you are not paying the lender any compensation.
Third Party Fees
Title Insurance Policy/Title Report - $300 to $2500+
The title report and the title insurance protect the lender and the owner of the home, if someone claims ownership of the property in the future and wins it in the Court of Law. There are two types of fees – 1) the owner’s policy, which protects the owner, and 2) the lender’s policy, which protects the lender. In some areas, the seller pays for the owner’s policy and the buyer pays for the lender’s policy, whereas in other areas the buyer pays both the policy. The fees differ based on the geographic location, the loan amount and the purchase price of the home.
Appraisal - $500
When the lender requests an appraisal from the website of the Department of VA, then they would select a VA approved appraiser for the purpose. However, if you are applying for a VA refinance loan then you would not require paying the fee as there is no need to go through an appraisal again.
Attorney Fees - $400+
Attorneys are not required in every state. However, if you do need to get an attorney, then you must get in touch with someone who knows the market of real estate and does not charge exorbitant fees. You must also note that the Department of VA does not allow you to pay the attorney anything other than the title work.
Credit Report Fee - $35
In most cases, the lender would need a credit report to determine your credit history. You need to pay this fee for that. The report has credit scores from all the three major credit bureaus – Transunion, Experian and Equifax. The middle score is used to make your qualify.
Recording Fee - $20 to $250
This fee is set by the county where the property is located. This is just to put the sale or refinance on public record, so the authorities know who is liable to pay taxes on the property, which banks have given out the loan on the property etc.
Survey Fee - $400
You would need to pay for the services of a company who would be conducting a survey on your property to find out whether all physical property lines are on the property or not.
Flood Certification - $20
The lender would want a flood certification or ‘flood cert’ to ensure that your property is not in a flood zone. Most areas in Texas are not in flood zone, but if it is, you would need to pay for flood insurance.
These are only some of the fees that you need to pay while closing VA home loans Texas. It is always a wise option to get the help of a VA Loan expert in Texas, as they would let you know what are the fees that you need to pay and what are the fees you don’t need to pay. Therefore, get in touch with a professional VA Loan specialist in Texas and realize your dream of home ownership with ease.
However, you do not need to pay anything out of pocket. The seller is allowed to pay all of the closing costs. In most cases, you just need to tell your real estate agent that you are taking a VA loan to buy the property and your agent might request the seller to pay for your closing costs.
Types of VA Closing Costs
Given below are some of the fees that you might expect to pay as closing costs in Texas. You must keep it in mind that the costs vary greatly based on the location of the property and certain other factors. Therefore, it is always a great idea to get in touch with a VA Loan Specialist in Texas to get a clear idea about the fees you would need to pay.
The Closing Costs can be divided into two groups – VA fees and lender fees and third party fees
VA Fees and Lender Fees
1% Origination Fees
The Department of Veteran Affairs offers the lender a sort of compensation through the origination fee. The Department however caps the fee at 1% of the loan amount. The lender cannot charge you any fees like underwriting fees and processing fees, if they have already charged you an origination fee.
VA Upfront Funding Fee
This fee is charged by the Department of VA to defray the cost of the program. You would be paying the fee directly to the Department. Now, either you can pay this fee upfront, or you can roll it into your loan.
Discount Points - Putting it in simple words, when you pay for a discount point, you are paying to lower your interest rate. It is different from the origination fees, as you are not paying the lender any compensation.
Third Party Fees
Title Insurance Policy/Title Report - $300 to $2500+
The title report and the title insurance protect the lender and the owner of the home, if someone claims ownership of the property in the future and wins it in the Court of Law. There are two types of fees – 1) the owner’s policy, which protects the owner, and 2) the lender’s policy, which protects the lender. In some areas, the seller pays for the owner’s policy and the buyer pays for the lender’s policy, whereas in other areas the buyer pays both the policy. The fees differ based on the geographic location, the loan amount and the purchase price of the home.
Appraisal - $500
When the lender requests an appraisal from the website of the Department of VA, then they would select a VA approved appraiser for the purpose. However, if you are applying for a VA refinance loan then you would not require paying the fee as there is no need to go through an appraisal again.
Attorney Fees - $400+
Attorneys are not required in every state. However, if you do need to get an attorney, then you must get in touch with someone who knows the market of real estate and does not charge exorbitant fees. You must also note that the Department of VA does not allow you to pay the attorney anything other than the title work.
Credit Report Fee - $35
In most cases, the lender would need a credit report to determine your credit history. You need to pay this fee for that. The report has credit scores from all the three major credit bureaus – Transunion, Experian and Equifax. The middle score is used to make your qualify.
Recording Fee - $20 to $250
This fee is set by the county where the property is located. This is just to put the sale or refinance on public record, so the authorities know who is liable to pay taxes on the property, which banks have given out the loan on the property etc.
Survey Fee - $400
You would need to pay for the services of a company who would be conducting a survey on your property to find out whether all physical property lines are on the property or not.
Flood Certification - $20
The lender would want a flood certification or ‘flood cert’ to ensure that your property is not in a flood zone. Most areas in Texas are not in flood zone, but if it is, you would need to pay for flood insurance.
These are only some of the fees that you need to pay while closing VA home loans Texas. It is always a wise option to get the help of a VA Loan expert in Texas, as they would let you know what are the fees that you need to pay and what are the fees you don’t need to pay. Therefore, get in touch with a professional VA Loan specialist in Texas and realize your dream of home ownership with ease.
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