The VA Loan No Down Payment
There are many advantages of a VA loan compared to any other mortgage program on the market. VA loans are easier to qualify for compared to other loan programs, closing costs are reduced and of course there is no requirement for a down payment. Not bad. But closing costs there are and your VA lender will want to review your most recent bank statements to verify you have enough available cash to pay for the fees associated with your VA home loan.
What sort of fees? You can be charged for an appraisal, origination fees, credit reports and others. Yes, VA home loans restrict the veteran from paying certain fees, but there are charges that you may be responsible for nonetheless. But what about those “no closing cost” loans you hear about?
In the VA world, a no down payment, no closing cost loan is sometimes referred to as a VA “no-no.” No down payment, no closing costs. But if there are costs and the veteran doesn’t pay them, who does? The seller can agree to pay your closing costs for you when you present your offer. VA loans allow sellers to pay for the veteran’s closing costs up to 4.00 percent of the sales price of the home.
Your VA lender may also adjust your interest rate upward then provide you with a lender credit to be applied to your associated charges. But in either fashion, you need to set this up ahead of time with your real estate agent, your VA lender or both. The VA no-no is probably the best mortgage deal on the planet.