Understanding VA Loan Closing Costs
While the VA loan eliminates the down payment, closing costs are still a real part of the transaction — understanding what's typical, and what's negotiable, helps buyers plan.
What's Included in Closing Costs
Standard closing costs — loan origination, appraisal, title insurance, recording fees — apply to VA loans similarly to other mortgage types, though the VA does limit or prohibit certain fees lenders can charge.
The VA Funding Fee
Most VA borrowers pay a one-time funding fee, which can be rolled into the loan amount rather than paid in cash at closing. Some disabled veterans are exempt.
Fees the VA Doesn't Allow
The VA restricts buyers from paying certain fees — like a real estate attorney fee in some cases — that would otherwise be common in a conventional purchase, shifting some costs toward the seller or lender instead.
Seller Concessions
VA loans allow sellers to contribute toward a buyer's closing costs (subject to VA limits), which can be a useful negotiating point, especially in a market where sellers are motivated.
Planning Ahead
Getting a Loan Estimate early in the process, and asking your lender specifically about VA-eligible seller concessions, helps set realistic expectations for how much cash you'll actually need at closing beyond the funding fee.
Frequently Asked Questions
The funding fee specifically can be financed into the loan amount; other standard closing costs are typically still paid at closing unless covered by seller concessions.
Yes, sellers can contribute toward a buyer's closing costs on a VA loan, subject to VA-specific limits — worth negotiating for in the offer.
