Military and Veteran Homebuyers Beware!

Dated: February 10 2023

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Military and Veteran Homebuyers Beware!

When shopping for a home loan, do not get so focused on rate that you disregard fees the lender charges known as loan origination fees. YOU WILL LOSE MONEY!

For instance Veterans United has this on their website...

ORIGINATION CHARGE
The VA allows lenders to charge up to 1 percent of the loan amount to cover origination, processing and underwriting costs. They can choose to either charge you a flat 1 percent origination fee, or pick and choose among a host of fees, so long as they add up to no more than 1 percent. If the lender isn't charging the flat 1 percent fee, then VA buyers can pay some fees and charges that would otherwise be unallowable.

I am not saying they do this on every loan, but I have seen it in the past. That 1% loan origination fee they are talking about would be $3,000 on a $300,000 home. That is $3,000 out of your pocket anyway you look at it. Even if seller pays it, it is a $3,000 concession that could be used elsewhere in the transaction. There are many lenders who will waive this fee. The interest rate may be slightly higher and increase your monthly payment by $10 to $20 a month, but my psychology major math tells me that it takes a lot of $120 to $240 per year to equal $3,000. Likewise, if you are a seller and have a buyer with a VA loan asking for a ridiculous amount of seller paid closing costs, my first question to the buyer is what the lender is charging in origination fees. The seller should not support that wasted cost.

Be an informed consumer. Just because a company uses a military term in their name, doesn't mean they aren't out to make a quick buck.

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TJ Courtney

TJ Courtney is a certified Military Relocation Professional, and has been a licensed REALTOR® since 2015. With TJ, you are not only getting a REALTOR® who is experienced in real estate negotia....

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