VA Loan Closing: Demystifying the GFE and HUD-1

Closing on your dream home is a thrilling milestone, especially when using a VA loan. But amidst the excitement, paperwork can pile up, leaving you scratching your head at acronyms like GFE and HUD-1. Don’t worry, fellow service members and families, this blog post is your decoder ring, breaking down these forms and guiding you through a smooth closing.

The GFE: A Sneak Peek at Closing Costs

Think of the Good Faith Estimate (GFE) as a crystal ball, offering a glimpse into your closing costs. Within three days of accepting a purchase agreement, your lender must provide this detailed document. It outlines estimated fees like:

  • Origination charges: Loan processing and underwriting fees.
  • Third-party charges: Appraisal, title insurance, and credit report costs.
  • Government fees: VA funding fee and recording fees.
  • Prepaid items: Property taxes, homeowner’s insurance, and mortgage interest.

Remember, the GFE is an estimate, not a guarantee. But comparing GFEs from different lenders empowers you to shop for the best deal.

The HUD-1: The Final Tally

As closing day approaches, you’ll receive the official closing statement: the Uniform Settlement Statement (HUD-1). This document lays bare the actual costs for both you and the seller. Compare it closely to your GFE, and don’t hesitate to ask questions about any discrepancies.

Here’s a breakdown of the key sections:

  • Page 1: Summarizes the transaction, including the loan amount, closing date, and settlement agent.
  • Page 2: Details the borrower’s charges, such as origination fees, title insurance, and government fees.
  • Page 3: Lists the seller’s charges, like real estate commissions and prorated property taxes.
  • Page 4: Shows the final net amounts you’ll pay or receive at closing.

Tips for a Smooth Closing:

  • Review your GFE thoroughly: Ask your lender to explain any unfamiliar terms or charges.
  • Compare GFEs from multiple lenders: Find the best interest rate and closing cost package.
  • Stay informed: Ask your lender and settlement agent questions throughout the process.
  • Bring your ID and closing funds: Be prepared to pay certified checks or wire transfers.
  • Relax and celebrate!: You’ve earned it!

Ready to navigate your VA loan closing with confidence? Reach out to Ready Front Real Estate, where Broker-Owner Raoul Rowe, a fellow veteran, understands your unique needs.

Call us at (737) 276-1953 or visit our website www.readyfrontrealestate.com. We’re here to guide you every step of the way.

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