Buying a home is an investment that not everyone can afford to make. For many home buyers, the challenge is not with the monthly costs associated with home ownership, but with the up front fees, down payment, and understanding that better interest rates help you pay off your investment quicker, and often for higher returns. If you are a veteran, the VA loan program can provide you with added incentives to making a smarter investment.
VA loans were introduced in 1944 to enable retired as well as active military veterans to afford a home after serving their country. VA loans provide borrowers with significant benefits, many of which are not provided through non-VA loan programs. With VA loans, for instance, borrowers are not required to pay a down payment, and the interest rates are lower than conventional loans. However, as with other mortgage programs, there are costs associated with a VA loans that you should understand up front.
This article will help you better understand how to calculate your VA expenses.
Calculating VA Loans
The fees and charges associated with VA loans are lower than the conventional loans offered by banks or other financial institutions. However, some of the borrowers may often find it difficult to calculate the exact costs of the loan process. This is the reason why it is useful to get some information about the expected fees and how to manage those costs. This will make the process of getting a VA loan seamless and convenient.
Usually, it’s next to impossible to get a home loan without making a down payment. However, this is not the case when you opt for a VA loan. The biggest benefit of taking out a VA loan is that you don’t have to make a down payment as you do with other kinds of loans. In fact, it has been estimated that 9 out of 10 VA borrowers obtained a loan without making a down payment. However, there are some additional expenses that borrowers need to incur. Read on to get an idea about the fees and costs associated with a VA loan.
VA borrowers also need to get their homes evaluated by an appraiser who is VA-approved. The appraiser will estimate the value of the home and ensure that it meets the minimum property requirements of the agency. The fee has to be paid by the buyer and depends on the location and type of the home you are buying.
The amount you pay in order to secure a loan in order to buy or refinance a home is the closing costs. It includes fees to various parties such as the lender, appraiser, title company and pest inspectors.
After signing the purchase agreement, the buyer has to contact a professional inspector to examine the home for any defects. According to the U.S. Department of Housing and Urban Development, the common range of the home inspection cost varies between $300 and $500, which at times can vary.
It is suggested that you consult a VA loan specialist to get a better idea about the additional costs involved.