How to Avoid VA Non-Allowable Fees in 3 Steps
Any real estate purchase involves a long list of closing costs and fees. Veterans are exempt from paying many of these closing costs. However, things do not always happen the way they are supposed to, leaving you to fight certain VA non-allowable fees.
From the beginning, in 1944, the VA Home Loan program has helped over 24 million veterans buy, refinance or modify their homes. In recent years, veterans and military families have benefited from the VA loan program in record numbers. The VA guarantees part of the loan, which allows lenders, such as banks and mortgage companies, to offer more favorable terms. Buying a new home is one of the most important purchases we make. However, the paperwork and confusing terms used in a real estate purchase are confusing.
Fees appear in practically anything we do. Whether we are in business, investing in cryptocurrency, taking a plane trip, or purchasing a home in a neighborhood with a homeowner's association, fees come at us from all sides. Some of them are justified, but others are not. That's when DoNotPay can step in and help you deal with problem fees.
What Are Closing Costs
Closing costs are fees associated with your home purchase paid at the closing of a real estate transaction. Closing costs vary widely based on where you live, the property you buy, and the type of loan you choose, but may include many costs, such as:
- Application fee
- Escrow fee
- Title insurance
- Underwriting fee
Generally, in any VA transaction, the veteran borrower can pay reasonable discount points to lower the interest rate, plus reasonable amounts for VA allowable itemized fees and charges and a flat 1 percent fee charged by the lender.
How those get paid is often a matter of negotiation between you and the seller. But there are also fees the VA does not allow the buyer to pay.
What Are VA Non-allowable Fees
VA buyers are barred from paying some costs and fees in some instances. Part of it depends on what approach the mortgage lender is taking. Here's a list of the VA fees a borrower cannot pay outside the 1% origination fee:
- Application fees
- Home appraisals ordered by the lender
- Home inspections ordered by the lender
- Mortgage broker fees
- Real estate agent fees
- Escrow fees
- Notary fees
- Document preparation fees
- Attorney fees (If the buyer chooses to pay for their own attorney, that's the buyer's call, but the buyer can't be charged for the bank's legal representation.)
- Mortgage rate lock fees
- Postage fees
- Prepayment penalties
- Property tax service fees
- Settlement fees
- Notary public fees
- Recording fees (if $17 or more)
- Buyer broker expenses
- Transaction coordinator costs
- Cost of termite inspection (except in certain states)
How to Reduce or Avoid VA Non-allowable Fees
- Negotiate with the seller.
- Apply for homebuyer assistance. Cheek with your local housing agency to learn of any home-buying assistance programs for which you may qualify.
- Make a down payment. Although there's no down payment requirement, putting some money down can help lower your VA loan fees.
Challenging VA Non-allowable Fees on Your Own
If you believe you are facing fees that you shouldn't have to pay, you probably need to do some research. First, take a look at the VA Pamphlet 26-7, Revised, Chapter 8. There's a lot to wade through here. For example, it provides that a refund is appropriate if an exempt veteran paid a funding fee or there was an overpayment due to miscalculated fees. If the veteran was overcharged, the following rules apply:
• A veteran who paid cash for the funding fee receives a cash refund for the overpayment.
• In the case of a veteran who paid the funding fee out of loan proceeds, the lender must apply the overpayment against the loan balance. In addition, the veteran must submit evidence to VA that the refund was applied to the loan's principal balance.
The Department of Veterans Affairs is a vast bureaucracy. Therefore, when things go wrong, you don't simply file a complaint with the Veterans Administration. Instead, you file a complaint with the agency, bureau, or person overseeing that aspect of the VA operations. For assistance, you can contact your regional loan center. If you have a problem with a VA mortgage refinance or other mortgage issues, you can submit a complaint to the CFPB online or by phone.
Next Steps for Challenging VA Non-allowable Fees if Your Attempts Were Unsuccessful
Many companies and services, such as banks, operate within a complex web of rules. These days, many businesses are strictly online. Some newer, technology-based business transactions are largely unregulated. If you feel overwhelmed, trapped in a bureaucratic nightmare, or just plain exhausted, it's time to seek help. DoNotPay can take a seemingly intractable problem and solve it quickly and easily.
Here's how you can use DoNotPay to appeal fees:
- Search "appeal fees" on DoNotPay, choose the Fight and Waive Fees product, and select the type of fee you want to appeal.
- Select the merchant you want to appeal fees for and enter the details of your transaction, including an associated account if you have one.
- Submit your case! DoNotPay will generate the best argument for your case and make sure your fee waiver request gets sent to the merchant for processing.
And that's it! DoNotPay will send a request on your behalf to appeal all applicable fees and to ensure you get your money back!
DoNotPay Works Across Multiple Platforms
DoNotPay provides a fast and easy solution for getting any fees appealed successfully! DoNotPay also works in fighting against additional fees that other companies may try to add on. To learn about some of the many fees DoNotPay can assist you with, check out the following list below! Why not try it today and see how much of a difference DoNotpay can make in appealing unwanted fees!
|eBay fees||Coinbase fees|
|Robinhood fees||Paypal seller fees|
|Spirit Airlines baggage fees||American Airlines baggage fees|
|Chase Bank checking account fees||Etsy fees|
|Homeowners Association (HOA) fees||Shopify fees|
What Else Can DoNotPay Do
Life is full of challenges. Everything can get complicated, such as selling our unneeded goods online, handling remote financial transactions, or just checking bags for a flight. When you are faced with a problem that is too difficult, time-consuming, or aggravating, DoNotPay can step in and take it off your hands. Perhaps you have issues with:
Get in touch today and see what we can do for you.