VA Loan Closing Costs: What Veterans Need to Know

1 January 2026

So, you’re a veteran or an active-duty service member, and you’re diving into the world of homeownership with a VA loan. First of all, thank you for your service! Second, let’s talk about something that doesn’t get enough attention—closing costs.

Now, VA loans are a fantastic benefit—no down payment, competitive interest rates, and no pesky private mortgage insurance (PMI). But that doesn’t mean you get a free pass on closing costs. Yep, there are still some fees involved in sealing the deal on your dream home. The good news? You might not have to pay as much as you think.

Buckle up, because we’re about to break down VA loan closing costs, what you’ll pay, what you won’t, and how you might even dodge a few fees.

What Are VA Loan Closing Costs?

Let’s cut to the chase—closing costs are the fees and expenses you have to pay when finalizing a home purchase. Think of them as the unavoidable "service charge" for getting a mortgage.

For VA loans, closing costs can include:

- VA Funding Fee (unless you’re exempt)
- Appraisal Fee
- Loan Origination Fee
- Title Fees
- Discount Points
- Prepaid Taxes and Homeowners Insurance

Each of these costs plays a role in making sure your loan process is smooth and legally sound. But don’t worry, we’ll dissect each one below.

How Much Are VA Loan Closing Costs?

VA loan closing costs typically range between 3% and 5% of the loan amount. That means if you’re buying a $300,000 home, you could be looking at $9,000 to $15,000 in fees.

Before you start panicking—relax. There are ways to ease this financial punch, and we’re going to show you how.

Breaking Down VA Loan Closing Costs

Let’s get into the nitty-gritty of where your money is actually going.

1. VA Funding Fee (The Big One)

Ah, the VA Funding Fee—the one cost that’s unique to VA loans. This one-time fee helps keep the VA loan program running so future vets can also enjoy the benefit.

Here’s what you’ll pay based on your situation:

| Down Payment | First-Time Use | Subsequent Use |
|-------------|--------------|----------------|
| 0% | 2.15% | 3.3% |
| 5% or More | 1.5% | 1.5% |
| 10% or More | 1.25% | 1.25% |

For example, if you’re buying a $250,000 home with zero down, your funding fee could be $5,375. Ouch. But good news—if you're receiving VA disability benefits, you could be exempt from this fee!

2. Appraisal Fee

Before the lender hands you a truckload of money, they need to make sure the house is actually worth it. Enter the VA appraisal.

This typically costs between $400 and $800, depending on where you live. And since the VA has strict guidelines, you might have to cough up some extra cash if the appraiser requires repairs before approving the loan.

3. Loan Origination Fee

Lenders don’t work for free, folks. The loan origination fee covers administrative costs, underwriting, and all the behind-the-scenes magic.

This fee is usually 1% of the loan amount, but VA regulations prevent lenders from charging excessive junk fees. So, at least you won’t get nickel-and-dimed too much.

4. Title Fees and Insurance

Buying a house without title insurance is like driving without a seatbelt—you just don’t do it.

Title fees cover the cost of verifying legal ownership, preventing fraud, and protecting you from any unexpected claims on your new property. Expect to pay $1,000 to $3,000, depending on your state and loan size.

5. Discount Points (Optional)

Wanna lower your interest rate? You can buy discount points to do just that.

Each point costs 1% of your loan amount and typically lowers your interest rate by 0.25%. If you plan on staying in your home long-term, this might be worth considering.

6. Prepaid Taxes and Homeowners Insurance

Your lender will require you to prepay property taxes and homeowners insurance at closing. This ensures there are no hiccups with tax payments during your first year of ownership.

These costs will vary based on your property tax rate and insurance policy. But to be safe, set aside at least a couple of thousand bucks for this expense.

VA Loan Closing Costs You DON’T Have to Pay

One of the best perks of a VA loan is that it limits what you have to pay.

Here are some costs that sellers, lenders, or other parties often cover for VA homebuyers:

- Lender’s Attorney Fees
- Broker Fees
- Escrow Fees
- Processing Fees
- Underwriting Fees

The VA wants to keep things fair, so lenders can’t just throw endless fees at you. And that, my friend, is a huge win.

How to Lower Your VA Loan Closing Costs

Okay, now let’s talk strategy. Because why pay more than you have to, right?

1. Ask the Seller to Pitch In (Seller Concessions)

Got some negotiation skills? Use them.

Sellers can cover up to 4% of your loan amount in closing costs, including your VA funding fee! So, if you’re looking at a house with a motivated seller, don’t be shy—ask for help!

2. Roll the VA Funding Fee Into Your Loan

Don’t have thousands sitting in your bank account? No problem.

The VA allows you to finance the funding fee into your loan, which means you won’t have to pay it upfront. Just keep in mind that this will slightly bump up your monthly payment.

3. Shop Around for a Lender

Not all lenders are created equal. Compare multiple lenders to find the lowest fees and most competitive interest rates. Some lenders even offer VA loan programs with reduced closing costs, so do your homework!

4. Ask About Lender Credits

Some lenders offer lender credits, where they cover part of your closing costs in exchange for a slightly higher interest rate. This can be a great trade-off if you're short on cash now but don’t mind a slightly higher monthly payment.

The Bottom Line

VA loans are an incredible benefit, but closing costs can still catch you off guard if you're not prepared. The key is to understand the fees, know what you can negotiate, and use every trick in the book to keep your costs as low as possible.

So, before you sign on the dotted line, take a hard look at your closing costs and make sure you're getting the best deal possible. Because at the end of the day, every dollar saved is a dollar you can put toward making your new house feel like home.