Can the seller pay off debt on a VA loan?

What can the seller pay on a VA loan?

The VA Seller Concession Rule. The VA allows seller concessions. But, these concessions cannot exceed 4% of the appraised value of the property, that is, the VA loan amount with zero down payment. For instance, concessions on a $250,000 home cannot exceed $10,000 ($250,000 purchase amount x 4% limit).

Why are VA loans bad for sellers?

Sellers Must Pay Certain Fees

The loan program prohibits buyers from paying certain fees at closing. Typically, this will include the loan underwriting fee and the closing fee. Those fees don’t go away. Instead, they become the seller’s responsibility.

Are VA loans a hassle for the seller?

The short answer is “no.” It’s true VA loans were once harder to close — but that’s ancient history. Today, you’re likely to have roughly the same issues with a buyer who has this sort of mortgage as any other. And VA’s flexible guidelines may be the only reason your buyer can purchase your home.

Can the seller pay part of the VA funding fee?

The seller may agree to pay your VA Funding Fee as a concession rather than have you add it to your loan amount. They can also cover prepaid taxes and insurance; debts that have to be paid at closing; and liens or judgments against the borrower.

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What is the max VA seller concessions?

VA loan rules dictate that the seller can contribute up to 4%. Seller concessions on VA loans may include payments toward a buyer’s judgments and debts, as well as VA funding fees.

Should a seller accept a VA loan offer?

And the idea that sellers have to pay closing costs for VA buyers is simply untrue. In short, there’s no reason a seller should reject your purchase offer simply because you’re using a VA loan. But, due to misinformation, some might anyway.

Does seller have to pay closing costs on VA loan?

One of the big benefits of VA loans is that sellers can pay all of your loan-related closing costs. Again, they’re not required to pay any of them, so this will always be a product of negotiation between buyer and seller.

What closing costs can a VA buyer not pay?

The 1 Percent Fee

If your lender is charging the flat fee, there’s a host of things you cannot pay for, including: Loan application or processing fees. Interest rate lock-in fees. Document preparation fees.

Who pays for VA inspection?

The lender hires the appraiser, but generally the buyer pays for the appraisal. VA appraisal costs vary by region. In the Northwest, fees might run $800 or more, while in the Midwest and the South, the cost might be closer to $450.

Why do sellers prefer conventional over VA?

Some agents advise home sellers to take conventional loan or cash offers, even if they are lower than VA offers, because those options are perceived as less hassle than VA loans. … “Choosing a conventional offer over a VA offer is not considered discrimination.”

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