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 lenderâs 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.
