Negotiating VA Loan Fees
If it’s not common knowledge it will be. And when you begin your queries about VA home loans, you’ll soon find out there are more advantages than just the zero down payment feature. Of course, requiring no money down from the veteran is certainly the most popular characteristic of the VA home loan but there are others. Despite not requiring a down payment, VA loans don’t require a monthly mortgage insurance payment like other loan programs do. Credit is a bit relaxed as well. And finally, there are certain closing costs the veteran is not allowed to pay, reducing the overall cash requirement burden for the VA home loan borrower.
But even though the closing costs for VA loans can be lower compared to other programs, can you lower them even further by negotiating the fee down? Let’s take a look at allowable fees and see whether or not there’s any leeway.
The appraisal fee is ordered by the VA lender and the fee is charged by the appraiser. Your VA lender will collect the appraisal costs from you but you don’t have the ability to ask the appraiser to reduce the fee. Credit report charges will appear and again the lender orders it and you pay for it but getting a discount from the credit company is unlikely.
Title insurance rates are regulated by the state insurance agency and isn’t something you can negotiate. Recording fees are a county fee and also are off limits to negotiation. What can you negotiate?
Perhaps the largest single charge is the VA lender’s origination fee, which is typically represented as a percentage of the loan amount. On a $300,000 loan, a 1 percent origination fee is $3,000. And while you may not be able to negotiate with the appraiser or title company, you can certainly ask your VA lender to pay those fees for you. But you do have to ask.