A VA mortgage offers veteran buyers a program with a zero down payment. This means the loan will equal the sales price or the appraised value of the home. The VA mortgage loan program permits veterans with qualifying income and credit to acquire a home without a down payment towards the sales price of the home. On the other hand, Veterans do need money towards closing costs, which the seller can assist the buyer with.
VA loans allow the seller to contribute up to 4% towards the buyers closing costs. This is exceptionally important in helping a veteran purchase a new property and reducing the amount of money needed for closing. For example, if a buyer purchases a property for $100,000 the seller can contribute $4000 towards the buyers closing costs. Seller concessions can pay pre-paid items, title fees, mortgage company fees as well as the VA funding fee. The veteran is not allowed to pay for the termite report, which is generally paid by the seller.