Are you thinking about getting a VA loan but heard that there are some fees associated with it? Here is what you need to know about two of those fees. 

Appraisal Fee

Part of the process of getting a VA loan is that the property must be evaluated by a VA-approved appraiser. The reason for this is to protect the bank and yourself since the VA wants to ensure that the property meets all requirements that are necessary for a VA loan. In general, it will help ensure that the property is a fair price compared to other homes on the real estate market, which you avoid paying too much for an overpriced home. The appraisal also makes sure that the home is structurally sound so that there is not any surprise damage that could end up costing you a lot of money in repairs down the road. Thankfully, the VA does set maximum appraisal fees to help protect you and ensure that you do not overpay for the appraisal either.

Funding Fee

What also makes a VA loan unique is that it has a funding fee. This is a fee that is only paid one time, and it is based on a percentage of your home's value. The funding fee that you pay will vary based on how many times you have used a VA loan and what the size of your down payment will be. As you can imagine, the fee is lower based on having a bigger down payment, and the fee goes up after your first use of a VA loan. In addition, the length of time that you served your country can also have an impact on how much your funding fee is.

Thankfully, you don't have to pay the funding fee at the time of getting the loan, which would make it be like an additional down payment. You do have a few options as the buyer. If it is currently a buyer's real estate market, you could negotiate for the seller to pay those fees for you. You could pay it as an upfront cost all at once with the down payment if you have the cash on hand. Finally, you could include the fee in the loan costs and gradually pay it off with your mortgage.

Be aware that there are exemptions where you may not have to pay the funding fee. This is most often associated with veterans that were disabled while serving their country or surviving spouses that are seeking a VA loan. 

Contact a local VA loan financing service to learn more.