VA Home Loan Closing Costs

Veterans often think their VA home loan will cover their closing costs, and while not technically true, a veteran can have the same effect with careful structuring of the real estate contract.

In effect, your result can be minimal to no closing costs with your VA home loan.

Your VA home loan amount will cover the home’s purchase price or appraised value, whichever is less (plus the VA Funding Fee). So if you want your closing costs covered by the loan, you need to increase the price and have a stipulation that the seller will pay the closings costs and pre-paid expenses, equal to the amount by which you have increased the price. As long as the home appraises for the increased price, your closing costs are paid as part of the deal.

Closing costs and pre-paid expenses can vary widely with 3% - 5% as the range for most places. If you want a more specific number, ask your lender for a Good Faith Estimate for any particular property.