One of the best parts of a loan backed by the Department of Veterans Affairs is its minimum down payment requirement. You can get a VA loan with 0% down. Just because these mortgages can come with a $0 down payment doesn’t mean you can get one without any money out of pocket, though. 

That’s because all mortgages — including VA loans — come with closing costs. These are fees and other costs you need to pay the lender creating the loan and other parties involved in setting up your mortgage. 

Fortunately, the VA caps some of these costs. And you have room to negotiate to see if the seller or lender will cover some of them, too. Still, if you’re buying a house with a VA loan, you should be prepared to pay some closing costs. 

VA loan closing costs you pay

To help you understand what you might need to hand over to get your keys, let’s look at the VA loan closing costs homebuyers most commonly cover themselves. 

The VA funding fee

This is a non-negotiable part of getting a VA loan. Unless you’re specifically exempt, you need to pay a small percentage of your total loan amount into the VA loan program. This helps to keep it going for other veterans and service members.  

If you’re buying a house with 0% down, your VA funding fee ranges from 2.15–3.3%. On a $400,000 house, for example, that funding fee would be $8,600–$13,200. 

Fortunately, you have a few options to avoid paying this upfront:

1. You can roll your funding fee into your total loan amount. That means paying interest on it, though. 
2. You can apply seller concessions to cover it (more on that below).
3. You can see if the lender will offer credits to cover it. This can result in a higher interest rate, so compare that cost against the cost of rolling it into your loan.  

The lender’s origination fee

This is the fee lenders charge to make sure you can afford your mortgage, and then to set it up for you. The VA caps this at 1% of the loan amount. If you’re borrowing $400,000, then, the most you could be charged for origination would be $4,000. 

Again, lender credits could help you cover this, usually in exchange for a higher rate. Or you can see if the seller would be willing to cover your origination fee. 

The fee for your home appraisal

To make sure the house you’re buying is worth what you’re going to pay for it, the VA requires you to get it professionally appraised. And that appraiser needs to be approved by the VA. The appraisal usually costs hundreds of dollars and can tip into the four-figure range. 

Lender credits or the seller could cover this cost. 

Other closing costs for VA loans

To close on a VA loan, someone also usually needs to pay for:

• A title search
• Title insurance
• Recording fees to have your ownership of the house properly captured by local authorities
• A survey
• Flood determination

If you’re buying discount points, you’ll also need to pay for those at closing. 

As per usual, the seller and the lender can step in to cover these costs. 

A note about prepaids

During closing, you might need to hand over money to pay for your property taxes or homeowners insurance in advance. Homebuyers often buy a year-long insurance policy (i.e., pay an annual premium) at closing, for example. 

Beyond that, your lender might require you to pay a little extra to fund your mortgage’s escrow account. This account gets used to pay your property taxes and insurance moving forward. 

Prepaids aren’t technically closing costs. But because they count toward the total you might need to hand over at the closing table, we wanted to mention them here. 

What the VA says you can’t pay

The VA has rules about non-allowable fees for veterans and service members. You can’t pay for attorney’s fees required by the lender, for example, although you can hire an attorney for guidance on your own. VA rules also say you can’t pay for your or the seller’s real estate agent’s commission. But don’t worry. The seller typically covers this anyway.

VA loan closing costs the seller pays

This is where there’s a bit of flexibility. Typically, the seller covers all the closing costs that traditionally fall to them, like the commission for both their real estate agent and yours. They can also take on closing costs that could otherwise be on your plate, like the cost of the appraisal and title search. 

Beyond that, the VA also says sellers can apply up to 4% of the home’s reasonable value in the form of seller concessions. That money can be applied to your funding fee, prepaids like your homeowners insurance, or any discount points you buy. 

If you’re buying a house and borrowing $400,000, for example, the seller could make concessions of up to $16,000. 

This all assumes the seller is willing to voluntarily fork over some money. You’re much more likely to get seller concessions in areas where the real estate market is slow or the seller needs to sell fast. If the house has sat on the market for a while or your agent learns they’re a particularly motivated seller, have your agent try to negotiate some concessions for you.  

On top of that, some VA lenders offer credits to help veterans and service members cover costs they’d otherwise be out-of-pocket for. That’s a big part of why shopping around helps you get the best deal on your VA loan. To start today, use our table of real-time VA loan rates from leading lenders.