When getting interest rate quotes from VA lenders while shopping for a mortgage you also need to know the fees involved. Yes, there are “no closing cost” loans but that’s for another column. Fees carry their own weight and impact who might have the better deal. Quick, which is better, 4.00% with $1,000 in closing costs or 3.00% with $10,000 in closing costs? That’s an exaggeration but it quickly proves the point—make sure you get the fees nailed down.
As lenders quote fees they will provide you with their fees, of which they’re pretty sure what they are and they can give you fees charged by third parties needed to close the loan. An attorney or title insurance for instance. But if you don’t watch out, the rate and fee combination can get a little muddy, making it more difficult to get a true apples to apples quote. Here’s how to clear things up.
Don’t worry about non-lender fees. Only pay attention to charges the lender is allowed to charge. Veterans are limited to the types of fees they may pay but there are fees nonetheless. When getting rate quotes, only pay attention to the charges the lender has control over. If you’re not sure which fees those are just ask. Appraisal, credit report and origination charges for example, are fees the lender can control. Early on, don’t let the barrage of closing costs confuse you.