My Perfect Mortgage
Discover the Benefits of VA Home Loan Closing Costs
1 minute read
May 29, 2024

Home purchase is a significant milestone, especially for veterans who have served their country. The VA home loan program is one of the many benefits offered to veterans, providing them with a more accessible path to homeownership.

This article will explore VA home loan closing costs, how they differ for VA loans, what is included, and how veterans can potentially minimize out-of-pocket expenses.

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What are closing costs?

Closing costs are the fees and expenses that homebuyers must pay at the end of a real estate transaction.

These costs include loan origination fees, appraisal fees, title insurance, and other charges.

Closing costs are typically paid when the property title is transferred from the seller to the buyer at the closing of a real estate transaction.

Buyers should budget for these costs to avoid surprises during the closing process.

Are closing costs different for a VA loan?

Yes, VA loans' closing costs differ from those of conventional loans. The VA loan program is designed to provide veterans with favorable terms, which often include lower closing costs.

The Department of Veterans Affairs (VA) regulates the types and amounts of fees lenders can charge veterans, ensuring they are not burdened with excessive costs.

Additionally, some closing costs can be covered by the seller or rolled into the loan, further easing the financial burden on veterans.

What is included in VA closing costs?

VA closing costs encompass a variety of fees, some of which are unique to VA loans.

Common components include:

  • VA funding fee: This one-time fee can be financed into the loan. It helps taxpayers offset the cost of the VA loan program.
  • Loan origination fee: This fee covers the lender's administrative costs.
  • Appraisal fee: This pays for the home appraisal required by the VA to ensure the property meets minimum standards.
  • Title insurance: This protects against any title defects that may arise.
  • Recording fees: These are charges for recording the deed with the local government.
  • Credit report: The fee covers the cost of pulling your credit report.

Will I pay less closing costs with a VA loan?

In many cases, yes. VA loans often have lower closing costs compared to conventional loans.

The VA limits the amount lenders can charge for specific fees and prohibits others entirely.

For instance, veterans cannot be charged for attorney, escrow, or underwriting fees, which can result in significant savings.

Moreover, the VA funding fee can often be financed into the loan, reducing the upfront cost for borrowers.

Can I avoid paying VA closing costs out of pocket?

There are several strategies veterans can use to avoid paying closing costs out of pocket:

  • Seller concessions: Sellers can agree to pay some or all closing costs.
  • Lender credits: Some lenders offer credits that can be used to cover closing costs, although this may result in a higher interest rate.
  • Gift funds: Family members can gift money to cover closing costs.
  • Rolling costs into the loan: The VA funding fee can be financed into the loan amount.

Are there resources to help with my VA loan?

Yes, there are numerous resources available to assist veterans with their VA loans:

  • VA regional loan center: Thesecenters provide information and assistance with the VA home loan process.
  • Veterans service organizations (VSOs): Organizations like the American Legion and Veterans of Foreign Wars (VFW) offer support and resources.
  • HUD counseling: The Department of Housing and Urban Development offers housing counseling services to help veterans understand their options.
  • Lender assistance: Many lenders have dedicated VA loan specialists who can guide veterans.


What are the typical closing costs for a VA loan?

Typical closing costs for a VA loan can range from 2% to 5% of the loan amount, but they can vary based on location and the specifics of the transaction.

Can closing costs be included in the VA loan?
Do all veterans qualify for a VA loan?
Are VA loan closing costs tax-deductible?
How can I estimate my VA loan closing costs?
What happens if I can't pay the closing costs?

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