Do Va Home Loans Have Closing Costs?

By Ann White

VA home loans are a low cost way for first time home buyers who are eligible, but the buyer must still pay closing costs.

Individuals who have served in the uniform services of the United States can be eligible to apply for VA home loans through the Department of Veterans Affairs. With a VA home loan, eligible persons can buy a home without making a down payment, and interest rates are lower than comparable commercial loans, resulting in great savings. Buyers must, however, still pay closing costs.

How do I determine if I am eligible for a VA Home Loan?

Depending upon whether service in the military was in wartime or peacetime, and whether or not it was before or after 1980 or 1981, there are differing requirements on the length of service required for eligibility. Individuals can go to the VA Web site at http://www.homeloans.va.gov/ to find the eligibility determination form, or visit the local VA office for assistance. Many mortgage lenders also have the eligibility determination form.

What is the benefit of a VA Home Loan?

VA Home Loans do not require a down payment, and the interest rates are a percent or more lower than a comparable commercial mortgage. This is especially helpful for first time home buyers, or people who want to buy a larger home. Eligible veterans can, if they wish, make a down payment, which will reduce the monthly mortgage payment.

Do VA Home Loans have Closing Costs? Are there other costs?

While VA Home Loans do not require a down payment, like commercial loans, the buyer is responsible for paying the closing costs. In addition to closing costs, when budgeting for a home purchase, consideration must be given to cost of property taxes and upkeep costs. Depending upon your location, property taxes can represent a significant outlay of funds. The property tax can be included in the mortgage payment, held in escrow by the lender, thus spreading the amount over a year, rather than a one time payment.

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