What Are the Standard Closing Fees on a Texas Veteran Home Loan?
The Department of Veterans Affairs (VA) finances up to 100 percent of a home loan for qualified veterans in Texas. Buyers can roll most of the closing costs into the loan, or the seller can pay them, so a buyer does not have to spend much money out of pocket. Due to the VA's effort to make housing affordable for veterans, there are only a few allowable closing fees.
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General Fees
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According to Texas Veterans Home Loans, a veteran pays a 1 percent flat lender fee as well as recording costs and credit report expenses. The buyer can purchase discount points to reduce the interest rate on the loan. The Department of Veterans Affairs requires a veteran to pay a funding fee, but the veteran can roll the fee into the loan. In May 2011, the funding fee for a VA loan for first-time veterans and those on active duty is 2.15 percent of the loan amount.
Appraisal and Inspections
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A VA-funded home buyer in Texas pays for the property appraisal and all home inspections as part of the closing costs. The buyer must pay these fees before the actual closing date to ensure both the buyer and the lender that the property is priced at market value and is in acceptable condition. The inspections include but are not limited to pest inspections, water well examinations and septic evaluations. The borrower can also pay for flood certification to verify whether the property is located in a flood zone.
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Pre-Paid Items and Insurance
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Part of the standard VA loan closing fees in Texas include prepaid items such as prorated property taxes and lender-approved escrow deposits. In addition, the veteran must pay the first year's hazard insurance at closing.
Survey and Title Examination
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Texas Veterans Home Loans reports that a veteran must pay survey charges and title examination fees if the lender requires it. These fees protect both the buyer and the lender against unknown liens, unclean titles and errors in the survey of the property. Generally, these fees are rolled into the loan amount unless the veteran requests otherwise.
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References
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