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Are there certain closing costs that the VA borrower is not allowed to pay, and the seller must pay them for the borrower?

by cedmunds961 from Birmingham, Alabama. Mar 6th 2017 Reply


Sara Deere (SARAinMO)
#1 ranked lender in Kansas - 492 contributions

All parties may negotiate who pays which fees. A seller may offer to pay a portion of or all of the closing fees for the buyer. There are certain closing costs and fees that are customary for a buyer or seller to pay. For example, on a VA Loan it is customary for the seller to pay for a termite inspection.Seller concessions for a VA purchase is 4% of the loan amount.

Mar 7th 2017
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,477 contributions

Well, sort of... On a VA loan, there are a few items that the buyer can not pay that are normal and regular costs. A title company closing fee for example. You can ASK the seller to pay them, but they don't have to. A seller can pay up to 4% of the purchase price towards the buyers closing costs. For VA loans in MN, WI, and SD, visit me at www.VAmortgageMN.com

Mar 7th 2017
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John Burke (jburke)
#1 ranked lender in Texas - 187 contributions

Hi Cedmunds961,Yes & no. There are certain fees that a lender cannot charge if they are charging you a 1% origination fee & there are other closing costs a Veteran cannot pay regardless. That doesn't mean the seller has to pay them. The lender can do a lender credit or the real estate agent can kick in some of their commission to help cover the non-allowable closing costs. Typically the buyer negotitates to have the seller pay their closing costs which makes the VA non-allowable closing costs a moot point. One more thing. The 4% cap is tied to concessions, not customary/normal closing costs. One of the coolest benefits of the VA mortgage is the ability to use the 4% seller concessions to pay off debts to help the Veteran qualify for the loan. Please feel free to contact me for more information or help. John Burke - Senior Mortgage Banker - Lending in ALL 50 states - Great Plains National Bank - 877.228.9069 - NMLS# 787231

Mar 7th 2017
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