I’ve started the VA loan process with this lender. Now I’m finding out there are more closing cost than I expected. What do I do? Is there any way to get VA closing cost assistance? I don’t want to start the process all over but I can't afford to pay this.
This exact scenario happens far too often. One of the biggest problems is the fact that veterans don’t realize their options. There are VA loan no closing costs lenders all over the country. More often than not, the veteran is steered to expensive local mortgage brokers by realtors or even builders. The veteran goes along with it without exploring all of the options. Then the surprise sets in. Not only is the broker not experienced in VA loans, has loads of paperwork, but they charge thousands of dollars for their services.
Let's look at it from a different perspective. You're standing on shore ready to take a swim. You even have someone telling you it's ok but you can read the sign. You know there's a shark (lender) swimming around waiting to take a huge bite out of your assets. On top of it all, you have a lifeguard (no cost lender) telling you to get back to shore before it's too late. You have time to make the right decision. Making it sooner than later is what's most important
What Does “VA Loan No Closing Costs” Mean?
First, let’s be clear that there are ALWAYS closing costs involved with any mortgage. There will be title fees, appraisal, prepaid interest, escrow and as you may have found, lender fees. What “No closing cost” means is you don’t have to pay closing costs for your VA loan. How?
Lender Paid VA Closing Costs
There are many ways to get VA closing cost assistance but one of the most popular ways to get a VA loan with no closing cost is Lender Paid assistance. Due to the fact that there are HUGE profits in VA loans, a lender can very well credit you for ALL of the costs you would normally pay at closing. This can easily be $5,000 to upwards of $25,000 of VA closing costs depending on the state, the loan amount and of course the lender. Some lenders don’t charge any origination fees. So the total closing cost could be reduced by $2,000 to as much as $20,000, depending on the loan amount and if the lender is charging discount points.
But I Don’t Want to Start the Process All Over
More often than not, this statement is coming from the assumption that the process will be as long and as tedious as it has been so far with the current lender. This couldn’t be further from the truth. In most cases it literally is only a matter of minutes to gather the documents that have already been gathered together. The rest of the process is pretty well finished. In fact, the appraisal, termite, title are all transferable. A simple verification of employment and income and you’re done.
Find the Best VA Lender for you
Before spending thousands of dollars on closing costs, check out your options. Even if you have 2 weeks until closing, you can still close on time with a VA Loan No Closing Costs Lender.