VA loan closing costs: beyond the down payment

Mortgage contact: Ashley Jones, NMLS 1739681 · First State Bank Mortgage

Does a VA loan mean zero cash at closing?

Not necessarily. An eligible purchase can have no down payment while still involving closing costs and prepaid expenses. The property, appraisal, entitlement, and terms of your transaction affect the amount needed. Ask for an itemized estimate instead of treating “no down payment” as a complete budget.

Keep these costs separate.

• Down payment. Discuss whether one is needed for your particular purchase and whether making one changes the comparison.
• VA funding fee. This is separate from other closing costs. The amount and whether you owe it depend on your circumstances. Some borrowers are exempt; ask the lender to verify your status.
• Loan and settlement charges. Review applicable lender, appraisal, title, and recording charges in the Loan Estimate.
• Prepaid expenses and escrow. Property taxes and insurance can affect cash needed even when they are not lender charges.

Find out what can be paid, credited, or financed.

For a VA-backed purchase, VA allows the funding fee to be financed. Other purchase closing costs generally must be paid at closing. Seller contributions may help under applicable rules, but do not assume a seller will agree or that a credit covers every cost. Confirm the transaction’s details with your lender and real estate representative.

Bring one property and one clear question.

For an initial conversation, tell Ashley the state where you plan to buy and whether you have used your VA benefit before. A useful opening question is: “What should I plan to pay before closing, at closing, and through the loan?” Keep financial documents in the bank’s secure process.

Use the Loan Estimate guide to check offers on the same basis. Read the VA purchase guide for eligibility questions. Already have a VA mortgage? The VA refinance guide explains the separate IRRRL and cash-out paths.