VA Loans offer some really amazing benefits. One of the signature benefits is that Veterans and service members are not required to make a down payment on their loan. When this is coupled with no private mortgage insurance, the savings really add up and make it a great mortgage options for those who are eligible.
First time homebuyers may not be familiar with the costs, fees and terminology of a mortgage. It’s understandable that some get confused and think that because the VA loan is zero down payment, that means they don’t have any costs associated with the loan. As an experienced real estate agent, I’m here to guide you through the VA loan process and educate you on what to expect when using your VA loan.
While not having to make a down payment can save you a significant amount out-of-pocket, it doesn’t mean that you won’t have a few items you will need to pay for during the loan transaction. These include items like earnest money and a home inspection. Home inspections typically cost $300 – $500. Earnest money on the other hand, can really vary based on a host of different circumstances including:
- Market conditions
- Price of home
- Multiple offers
- Your financial situation
- and more
Earnest money is a deposit you make once under contract to demonstrate to a seller that you are serious about moving forward with the purchase transaction. This is one reason why it’s important to have a knowledgeable real estate agent on your side. As a local real estate expert I’m familiar with the current market trends and can help you make your offer appealing to a seller and guide you on how much earnest money is common in our area based on the factors above.
We will also talk about scenarios where you could loose your earnest money and contract contingencies we can put in place to protect your earnest money deposit. Having a strong understanding of how earnest money works in a real estate transaction is one key step to having a smooth, stress-free buying experience.