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VA Loan Costs

Understand the costs of purchasing a new home to ensure you can handle the financial responsibility of owning a home.

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Costs of Purchasing a Home

When you make the decision to purchase a home do you think about the price range you can afford? Have you calculated how much of a monthly mortgage payment you can handle financially or gotten pre-approved for a certain mortgage amount? If you already know how much you can spend on your home, be sure to consider all of the fees involved in purchasing your home. These fees can change your monthly mortgage payment amount greatly depending on your lender and what loan terms you agree to.

You should also consider the fees involved with the sale of your home. If you are planning to purchase a new home with a down payment from the sale of your existing home you should know the facts about the costs involved in selling a home.

Some of the costs involved with buying and selling a home include:

  • Loan origination fee. This fee is for anyone who is taking out a new mortgage loan. This includes if you sell your home and purchase a new home with a new mortgage.
  • Loan points. Points are equal to 1% of the value of the loan and are paid up in front by the loan borrower in exchange for a more favorable interest rate.
  • Appraisal fees. These are only for the purchaser of the home in order to prove to the lender that the house is worth a certain value for the loan to go through.
  • Inspection fees. Most buyers will want to have a home inspection done in order to make sure there are no real problems with the home that they do not know about. The seller pays nothing and the buyer incurs all of the cost.
  • Application fee for mortgage insurance. This is only for the buyer and only if they are putting less than 20% down payment on the home.
  • A fee for a credit check. Any person whose name is on the new mortgage loan must get a credit check. This fee is only for the buyer.
  • If the seller is allowing the buyer to assume their old mortgage there is a fee the buyer must pay.
  • The insurance premium for the mortgage. If the buyer needs mortgage insurance then there will be a premium due at the time of loan closing.
  • Any fees for a mortgage broker. Buyers who use a mortgage broker to get a loan for their home are solely responsible for paying this fee.
  • Home owner's insurance premiums. The borrower will be required to pay the premium for the home owner's insurance.
  • Any money that needs to be in an escrow account. Many loans incorporate the property taxes into the monthly mortgage payment that goes into an account to be saved until the taxes are due. Sometimes these escrow accounts have minimum balances that have to be enforced at the time the loan is given. This means you may have to deposit some money into your escrow account when you first get your mortgage loan.
  • Fees for any title work. A title company will need to clear the title of any problems and re-deed the land into the new owner and mortgage lender's name. This fee is for both sellers and buyers of a home.
  • Early termination fees. This fee applies to the seller if you have a mortgage currently that has a clause that says you will be charged a fee if you pay off your mortgage loan early.
  • Title insurance fees. This is to make sure no problems occur when transferring the title.
  • Any attorney's fees that may accrue is the responsibility of each party to pay their own.
  • Real estate agency fees. These fees are usually paid by the seller.

There are other fees involved with purchasing or selling a house which is why it is so important to know the facts about buying and selling. Remember that if you are selling your home and plan to purchase another home you will not only be paying all of the selling fees, but also all of the buying fees once you do find a new home to purchase. For more questions about Veteran Home Loans, you can go to our FAQs.