Closing costs are what you’ll pay before the home purchase or refi is complete. Some of these fees will be paid upfront while others will be due at closing. You will receive a Closing Disclosure a few days before close that outlines all of the costs and fees you’ll need to pay.
USAA does not charge mortgage origination fees for VA loans, VA jumbo loan or the IRRRL.
VA loans do require an upfront, one-time payment called a VA funding fee, collected at closing, and it’s nonrefundable. The fee is determined by the loan amount, your service history and other factors. A down payment on your VA loan may be required in certain circumstances and maximum loan limits vary by county.
The VA funding fee is a one-time fee of 2.3% of the total amount borrowed. The funding fee increases to 3.6% for borrowers who have previously used the VA loan program but can be reduced by putting at least 5% down at closing.
If you are refinancing, it is 2.3% of the total amount borrowed and 3.6% after first use. The VA funding fee rates for refinancing loans will not change based on your down payment amount. If you used a VA-backed or VA direct home loan to buy a manufactured home, you only need to pay the first-time use funding fee.
For a VA IRRRL, USAA Bank covers the appraisal, title and VA funding fees. However, payment of discount points, taxes and insurance, and HOA fees will be your responsibility. USAA’s IRRL has -0.125 discount points, meaning the bank offers a cash rebate to help you lower your closing costs.
Because you pay less upfront, you will pay a higher interest rate for the life of the loan.
There are no discount points offered on USAA’s VA or jumbo VA loans, meaning your closing costs will be lower compared to other loans, but you also won’t be able to lower your interest rate further.
Other closing costs to expect:
- Appraisal fee for the assessment of the home’s market value; these are set by the VA, not the lender, and vary depending on where the property is located
- Recording fee paid to city or county to record your deed and mortgage documents
- Underwriting fee for the cost of reviewing and vetting your application
- Title fees to verify there are no tax liens on the property and for title insurance to protect you if a problem is discovered
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