“Non-allowable” VA fees in Kansas City As the name implies, VA loans are backed by the Department of Veterans Affairs. The VA loan program is committed to providing veterans with an affordable and pleasant homebuying experience. With that being said, it shouldn’t surprise you that the VA closely monitors the closing fees that veterans have to pay. There are certain costs that the VA prohibits lenders from charging homebuyers during closing. These are referred to as “non-allowable” fees. So what determines these fees? When closing on most home loans, the list of fees is pretty lengthy. Conversely, the VA only allows lenders to charge a 1% origination fee. This fee is intended to pay the lender’s costs of which include document preparation fees, escrow fees, loan application fees, and tax service fees. Furthermore, this 1% fee enables the borrower to determine how much they need to budget for this fee at closing. That way, there are no unpleasant surprises at closing. One of the more common questions is does the seller pay these non-allowable fees? The VA has strict requirements regarding what homebuyers can pay. If an expense is considered a non-allowable fee, it will have to be covered by another party. In some cases, the lender or realtor may pay the fee while in others, the seller might pay it. https://www.google.com/maps?cid=11762440658982302319