Financing in West Palm Beach>Question Details

Marsha Mayer, Real Estate Pro in WEST PALM BEACH, FL

Will a new home buyer with a 100% VA loan be allowed to put the closing costs on the loan?

Asked by Marsha Mayer, WEST PALM BEACH, FL Mon Sep 6, 2010

Help the community by answering this question:


Alma Rose, I am the Realtor. the Seller will not contribute toward Closing Costs. They are already coming to the table with almost $200,000 to close this deal.
The buyer is pre-qualified for a 100% VA loan at 'more than' the asking price of this home but he does not have the cash to make up the difference what it will appraise for (will be $20K less) and the selling price.
1 vote Thank Flag Link Tue Sep 14, 2010
Funding Fee can be rolled in. All other costs not paid by seller has to be paid by buyer. Lender can also pay some/all closing costs via premium pricing.

They can also look at a USDA loan, as it allows closing costs to be rolled in up to appraised value -

Florida VA Home Loans, 7 days week. PH: (904) 385-3988
0 votes Thank Flag Link Tue Jun 23, 2015

VA Mortgage Loans are available today for both honorably discharged Vets and active duty military personnel. Here are some of the great features of this fantastic program:


- Up to 100% financing, with no down required.

- No monthly mortgage insurance added to your payment.

- More lenient credit qualifying standards than other types of mortgage loans.

- Low rates compared to other loan programs.


-Order your Certificate of Eligibility. A Florida VA loan lender can order your COE quickly for you, or you can go directly to the VA to obtain a copy. If discharged, you will need your DD214. The next step is to get pre-approved with an experienced VA lender.

-2 years tax returns

-Last 2 paycheck stubs

-Last two bank account statements

-600+ credit score (typically 640 is what most lenders look for)

-Same line of work for the past two years

-Money for closing costs

Please contact me and I will put you in touch with the best VA lender!!!
Andrew 954-394-7185 (prefer text first)
0 votes Thank Flag Link Wed Jun 10, 2015
For a VA loan only the funding fee can be rolled into the loan. The VA allows the seller to pay up to 4% towards closing costs and prepaid outside of the normal sellers costs. However a lending institution can premium price the loan (have a higher interest rate and credit the overage back to the buyer to put towards closing costs/prepaids) to help offset any closing costs that the seller will not pay. If the buyers can get gift funds from a family member that is another way to go as well. I personally only suggest the premium priced loans if it is a last resort.

Lorena Spillar
Bank of America
(850) 830-9948
0 votes Thank Flag Link Wed Sep 8, 2010
Anything above the appraised value will HAVE to get paid by the buyer, whether it's closing costs or downpayment. A VA lender will not lend more than 102% of theloan amount ( with the VA fee being financed , so itreally sort of negates that extra 2 %). So anything above that number will have to be brought to the table by the buyer. Try gift funds.

Elena Ollick
Amerivest Realty
Faith Home Loans
0 votes Thank Flag Link Wed Sep 8, 2010
I see, "On the loan" is the key if it does not appraise I cannot see this hapenning
Web Reference:
0 votes Thank Flag Link Tue Sep 7, 2010
In this transaction the seller will not pay closing costs for the buyer. Seller will have to come to closing with $200,000 to make the deal happen. It is not a short sale.

Property will not appraise for the agreed to purchase price, so there is a short fall for the buyer. Buyer would have to come up with $20K to make up the difference bewteen the selling price and the appraised value. uyer may have 10K, not 20K. That's why buyer needs to write finance the difference to get to the agreed to selling price. Understand? So with this scenario it doable without seller concessions?
0 votes Thank Flag Link Tue Sep 7, 2010
Yes, as long as the closing costs were written into the contract as a seller concession.

And by the way, for most lenders it doesn't matter whether a person is a first time home buyer or has owned homes before. The rules and qualifications are all the same.

Elena Ollick
Amerivest Realty
Faith Home Loans
0 votes Thank Flag Link Tue Sep 7, 2010
Yes, you truly should be able to buy a home with no money out of your pocket. You should ask your Realtor to write up your contract with 4% of buyer closing costs and prepaid items to be paid by the Seller. Sellers are more than willing to pay buyer closing costs in this market!

I've had VA buyers actually get cash back at closing (because they put up an earnest deposit of $500).

Congratulations on becoming a homeowner.
0 votes Thank Flag Link Mon Sep 6, 2010
Here is a link to what is/not allowed for VA (4% seller max contribution is considered reasonable)
Also visit their page at "Steps to a VA Loan" the Sale - They have a very useful worksheet here that you can use for the qualifying portion of your loan.
Web Reference:
0 votes Thank Flag Link Mon Sep 6, 2010
Consult with a mortgage broker. In Florida VA does NOT allow 6% for closing costs. They only allow 4% sellers concessions for Closing Costs, you may want to consider a relpair credit if you need more than that.
Web Reference:
0 votes Thank Flag Link Mon Sep 6, 2010
Marsha is correct, that is the easiest way to buy with very little out of pocket (count on paying for a property apppraisal $350-$400) Closing costs including prepaids can be paid by the seller (up to 6%) and some others involved in the transation. Closing costs for a VA loans are quite reasonable still because there are a number of so called junk fees that are not allowed on VA. Also, only approved Lenders/Brokers are allowed to originate VA loans. Don't forget to allow yourself some extra time on the contract to cover any possible delays on the VA side of the documentation.
Web Reference:
0 votes Thank Flag Link Mon Sep 6, 2010
Yes, you ask the seller to pay points which are used for closing costs of the buyer among other things.
0 votes Thank Flag Link Mon Sep 6, 2010
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