|
How FHA and VA Loans Affect Your Offer
Extra Costs to the
Seller
If you are obtaining a VA or FHA loan in order to
finance your purchase, you must include that information in your offer.
This is because government loans place additional financial and performance
obligations on the seller.
Non-Allowable Fees
First, VA and FHA loans prohibit buyers from paying
certain types of fees that are often charged by lenders, escrow
companies, settlement agents, and title companies. They are called
"non-allowable" fees. They still get charged anyway, but as the
buyer, you are "not allowed" to pay them. The result is that
the seller ends up paying them instead of you.
Most of these "non-allowable" fees come from
your lender. By the time you are making an offer you should have already
been pre-qualified by a loan officer, so you or your real estate agent
can ask how much the lender’s non-allowable fees will be. Experienced
agents should also have an idea of what non-allowable fees will be
charged by the escrow or settlement agent and the title insurance
company.
Since these are fees the seller would not pay on an
offer with conventional financing, this information must be included in
your offer. You should also realize that since the seller will be paying
these additional fees, they may be a little less negotiable on the price.
|
