Who Pays What? Buyer and Seller Loan Fees

So who pays what when it comes to buyer and seller loan fees? This can be one of the most confusing topics for buyers and sellers, but hopefully, you will have more clarity on buyer and seller loan costs after reading this blog from start to finish. The first thing to understand is that loan charges and who pays what will vary depending on the loan type i.e. Conventional, FHA or VA. As you will see in the chart shown below, provided with thanks to Academy Mortgage, there is a long list of loan charges and the buyer’s costs will be different than the seller’s costs. When it comes to a conventional loan, the buyer will pay for almost all of their loan fees. With an FHA loan, more often than not, the buyer will require closing cost assistance from the seller in order to be able to qualify and close on their new loan, but the buyer will be required to pay for their down payment (minimum 3.5%).  A conventional buyer will not require seller assistance and will have enough set aside to pay for their own closing costs in addition to their down payment (5% or more). One thing to keep in mind is that both conventional and FHA loans may require the buyer to pay a monthly mortgage insurance premium (MIP) depending on how much the buyer puts down on the home, whereas there is no MIP for VA loans. VA loans are in a class of their own and buyers who qualify for VA will save a lot of money in loan charges based on the specific regulations surrounding VA lending, however they will have  to pay a special VA funding fee. The seller will also be required to pay for a realty tax service fee if that is something the lender charges on a VA loan.

If you are thinking about buying a home in Arizona, then I would suggest speaking with a local lender to discuss all of your loan options and the loan costs associated with each type. An experienced local lender will not only be able to help you decide what type of loan is best for your financial situation, but they will also be able to tell you how much you qualify for. This is an important first step to take before beginning your home search, so please don’t hesitate to reach out to me with any questions or concerns. I would be happy to help you determine where to begin and then I will walk you through the home buying/selling process from start to finish with ease and professionalism!

Buyer and Seller Loan Fees