VA Loan Fees The Borrower Can Pay

VA loans, like all home loans, come with a variety of fees and expenses that are a natural part of doing business. These fees and charges can add up, and borrowers new to the VA mortgage loan process soon learn they need to save and budget for these expenses in the same way those in the market for a new car must pay for tags, title, and licenses in addition to the vehicle itself.

In the case of VA loans, these fees and expenses are regulated. The Department of Veterans Affairs has a list of fees and expenses the borrower is permitted to be charged as well as a list of expenses the borrower must NOT be charged for.

For example, the VA prohibits borrowers from being charged twice. An appraisal fee can’t be levied by the bank if a previous appraisal is still in effect when the new borrower wants to buy a particular home.

What are the VA loan fees borrowers can be charged for by the lender?

There are many–including the previously mentioned appraisal fees. Other charges include recording fees, credit report fees (or evaluation fees in the case of automated underwriting), and hazard insurance.

The buyer can also be charged for “pre-paid items”, which include assessments, property taxes and other charges applicable in the year the home is purchased. Borrowers can also be charged for the actual cost of flood zone determination where required. This is usually applicable when it is necessary to discover whether the home is in a Special Flood Hazard Area.

According to the VA, veterans can also be charged for “a life-of-the-loan flood determination service purchased at the time of loan origination” but adds that in the case of flood zones, “A fee may not be charged for a flood zone determination made by the lender or a VA appraiser.”

This is not a complete or exhaustive list of the fees and charges a borrower can pay in connection with a VA insured mortgage loan, but it’s a very good start. If you’re new to VA loans or home buying in general, this list gives you a very good look at the kinds of expenses you’ll encounter.

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