VA Loan Fees: Who Pays?
There are many VA loan fees involved when it comes to purchasing a home with your VA benefits. VA appraisals are mandatory as part of the loan approval process, but the home inspection process is not, it’s an optional part of the home buying experience.
The home inspection fee question seems fairly obvious: The borrower elects to have the inspection done, so the borrower pays for the service. But in the case of the VA appraisal, who pays? According to VA loan rules found in VA Pamphlet 26-7, it’s the borrower’s responsibility not only to pay the VA appraisal fee, but also to pay the fee for any required compliance inspection that might be needed as a result of the appraisal.
These rules are found in Chapter Eight, which says, “The veteran can pay the fee of a VA appraiser and VA compliance inspectors…The veteran can also pay for a second appraisal if he or she is requesting reconsideration of value.”
However, Chapter Eight also points out two instances where the borrower may not be required to pay additional VA appraisal fees, namely in situations where the lender has requested a new appraisal for the purpose of “reconsideration of value.” The borrower also can’t be required to pay for an appraisal requested by a third party (in other words, someone who is not the borrower or the lender).
Some borrowers are confused by the appraisal fee system, and wonder why a refund of the appraisal fee isn’t warranted if the deal never closes.
Borrowers should know that VA appraisal fees and compliance inspection fees are for a service rendered, rather than the outcome of the appraisal. The appraiser must be paid no matter what the outcome of his/her services. Borrowers who choose in the end not to purchase a home that has been appraised (sometimes because the appraisal brings back a fair market value lower than the sale price of the home) still owe the appraiser for the work done.