Who typically pays the discount points on a VA loan?

In a VA loan, it is common for the seller to pay the discount points. This practice is part of the negotiation process in a real estate transaction, where the seller may agree to cover some of the closing costs to help make the deal more attractive to buyers. Discount points are fees paid directly to the lender at closing in exchange for a reduced interest rate on the loan, ultimately saving the borrower money on their mortgage over time.

This arrangement can be beneficial for both parties: the seller can expedite the sale of their home by offering to pay points as an incentive to potential buyers, and buyers can lower their monthly payments as a result. While it is possible for borrowers to pay their own points, the VA loan program encourages such practices to make homeownership more accessible for veterans. The lender typically does not pay the points, and the government, while it supports the VA loan program, does not cover these costs directly in the transaction.