Brent Bruce's Mortgage Insights

 Brent C. Bruce
Branch Manager
Allied Home Mortgage Capital Corp.
8480 Red Oak Street
Rancho Cucamonga, CA 91730
Phone 909-463-4750
Fax 888-856-4657
Email - bbruce@alliedhomenet.com

I have had a few recent calls from Realtors asking how they should structure VA closing cost credits. We have all heard that the VA does not allow certain fees to be paid by the borrower / buyer and that is correct.

So how much should you ask for the seller to credit?

Well to clarify, here are the main fees that the seller CANNOT pay that are common in a California transaction. I have also included my general dollar figures for these fees.

- Processing Fee $595
- Admin Fee $395
- Underwriting Fee $750
- Escrow Fee ( any and all) $800 (per escrow company)
- Application Fee $0 (I do not charge this fee but some will charge $100+)

- TOTAL CREDIT NEEDED $2540

Now you may find some people who will argue the individual fees, but I want to be sure you do not run into trouble.

Keep in mind that some other fees ARE acceptable for the buyer / borrower to pay such as

- 1 origination point
- Bona Fide discount points
- Appraisal Fee
- Title Fees
- Hazard / Fire insurance costs
- VA Funding Fees
- Impound Reserves (taxes and insurance)

Please keep in mind that these fees can be paid by anyone in the transaction other than the Borrower / Buyer up to a 4% maximum.

Also remember that the credit amount mentioned above of $2540 will not give your client a 0 closing cost transaction.  These are only the costs that the VA will not allow the buyer / borrower to pay.  For a 0 closing cost loan call me so I can give you transaction specific numbers.

I am a VA Financing expert and have successfully closed many VA loans. In some cases the client has literally not paid 1c for the house at close.

While these numbers above will help, please remember that they are estimated.

Do not be afraid of VA. It is a great product offering;

- 0 down
- Possibly 0 closing costs
- 0 monthly mortgage insurance
- Great rates

For best results please give me a call and I will do all I can to get your VA transactions closed.