This article looks into the fees that are incorporated into Veteran Affairs (VA) mortgage loans and the associated benefits that expire, leaving borrowers with potentially hundreds to thousands of dollars in fees paid to the VA. It covers the fees associated with VA loans, how those fees are often higher than those found in conventional loans, and how those fees can sometimes be refunded. It also examines the relationships between borrowers and lenders, with lenders often pocketing fees given there is no incentive for them to look for faster loan processes for borrowers.
The article starts off by highlighting the benefits of a VA loan such as the lower down payment requirement, no private mortgage insurance, and no maximum loan amount. It then goes into the fees associated with a VA loan, including the VA funding fee and other closing costs. It emphasizes the fact that VA loans often have higher fees than conventional loans due to the lowered cost of entry.
Secondary to this fee discussion the article examines the reliance of borrowers on VA loans for their home purchasing power. It notes that lenders have a huge responsibility to borrowers in processing the loan referral quickly, but due to no generally accepted incentives, borrowers are often burdened by longer loan processes and excess costs. To refer back to the fees associated with VA loans, the article mentions that if lenders fail to complete the referrals in a timely manner, the upfront fees may sometimes be refundable to the borrowers.
Finally, the article points to the future, looking to the expiration of certain fees (specifically the loan guaranty, appraisal review, and secondary market loan origination fees). If these fees expire, it would free up hundreds of extra dollars for the borrower. The article notes that these fee waivers are yet to be decided but that homeowners should definitely watch out for them.
In conclusion, this article provides insight into VA mortgage loans, the fees associated with them, and the benefits and drawbacks of them. It emphasizes the importance of lenders taking a more active role in obtaining loans and the sometimes-refundable fees associated with them. Lastly, it looks towards the future with the possibility of waivers that would essentially give borrowers more money back in their pocket.
You can read this full article at: https://www.housingwire.com/articles/opinion-excessive-va-mortgage-loan-fees-expire/(subscription required)
Note Servicing Center provides professional, fully compliant loan servicing for private mortgage investors so they can avoid the aggravation of servicing their own loans and just relax and get paid. Contact us today for more information.
