The VA Lender’s Handbook contains detailed explanations of fees a borrower may be charged as a part of doing business with a participating lender.

Borrowers must pay appraisal feels, closing costs, the VA loan funding fee and a 1% lender’s flat fee which is designed to cover all expenses not charged to the borrower on an itemized basis.

But some fees are not to be passed on to the borrower. One example is the fees incurred by the bank for attorney services. A lender’s legal counsel must be paid for by the lender, not the borrower. That’s not to say that the borrower isn’t responsible for loan-related expenses such as title examination or title insurance–those are listed as allowable charges. But the bank can’t make the VA home loan applicant shoulder the bank’s legal fees otherwise.

One important distinction to make is the difference between the bank’s lawyer and a borrower’s option to hire a lawyer to review loan contracts and other aspects of the home loan process. A borrower is free to hire an attorney at his or her own expense. The VA official site states, “VA does not intend to prevent the veteran from seeking independent legal representation. Therefore, the veteran can independently retain an attorney and pay a fee for legal services in connection with the purchase of a home.”

When the borrower does this, the loan paperwork must be changed to reflect the borrower’s option and to acknowledge that the lender is not charging the buyer, but that legal fees are being paid voluntarily by the VA loan applicant for a lawyer of his or her own choosing.

The arrangement, which is not mandatory, is an option the borrower can use to additional peace of mind when it comes to signing such long-term and binding agreements. The Department of Veterans Affairs does not give legal advice–it’s the borrower’s responsibility to investigate any clause or aspect of a home loan contract they aren’t sure about.

Any reputable lender will understand a borrower’s need to be sure about contracts–no one should actively discourage a VA loan applicant from hiring a lawyer to review the transaction prior to committing. But the expense for the borrower’s legal help is paid solely by the borrower.

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