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The loan amount will typically be for the set purchase price or the appraised value of the home, plus the VA Funding Fee. The loan will be based upon the lower of the two values, so you can plan on increasing the purchase price up to the appraised amount in order to get the closing and pre-paid costs covered by the seller as part of the contract.

It all sounds somewhat complicated, but your realtor will be able to walk you through this process and will do everything in their power to make you happy so that the sale goes through. Also be aware that the purchaser does not pay the realtor, so it would be remiss not to use their expertise and know-how when it comes to the loan process. If you are buying a home that is listed by the realtor, he or she will collect their full commission from the seller at the time of closing. If your realtor leads you to a home listed by another company, then the two realtors will split the commission. This is usually set forth in the selling contract between the seller and the real estate professional. In fact, in most cases, your realtor will be able to make adjustments for getting you into a newly constructed community that doesn't have realtors on contract or even into a home for sale by owner, if you happen to decide that that is the home that you want.

When it comes to closing costs and pre-paids, you should be in receipt of a "good faith" estimate. This is just what it sounds like and can give you a much better idea of what the fees will be. Some of the charges that you may be responsible for or that can be paid by the seller as part of the contract are:

1. Appraisal and compliance inspections, to include a second appraisal if the veteran is asking for a reconsideration
2. Recording fees and recording taxes
3. The credit report ordered by the lender
4. The portion of taxes, assessments and such chargeable to the borrower and the initial deposit for the tax or insurance account
5. The Hazard Insurance premium, to include flood insurance if required
6. Flood zone determination, if required
7. A survey, if required by the lender
8. Title Examination and/or Title Insurance
9. The VA Funding Fee, which is currently set at 2% and is designed to help defray a "no down payment" loan

There are also fees that cannot be charged to the veteran and which must come out of the lender's flat 1% commission, so question fees that don't fall into the above list.

It is well worth it to enlist the help of a real estate professional as the paperwork and contract process can be quite confusing, at the least. If you have chosen to buy a house by owner and not enlist a realtor's help, then the wisest course is to enlist the help of an attorney. If you are a member of USAA, they may be able to help you find one, or get in touch with the local JAG office to find resources to help with the real estate contract. Now, if you happen to have real estate training and are confident of your abilities in handling your own closing, then you are a step ahead of the majority of your peers. Happy house hunting!

Along with appreciating those who have served our country, Joseph enjoys growing his own tomato plants. Garden Harvest Supply is one of his favorite gardening web sites which offers vegetable plant supports including tomato cages to help you grow the best tomatoes.