VA Loan Closing Costs

The veteran can pay for all reasonable and customary fees for any and all of the "Itemized Fees and Charges" distinguished by VA. The lender is allowed to charge a 1%* origination fee and a reasonable amount of discount points. Fees vary greatly from lender to lender. If you are talking to a lender who charges any origination fee you should shop around. National Bank Of Kansas City does not charge an origination fee on VA loans.

Keeping your Closing Costs to a Minimum

It is a fairly common misconception that a VA loan can automatically be arranged with no closing costs. By default the only fee that can be rolled into the loan is the VA funding fee. Anything other than the funding fee cannot be rolled into the loan. However, you can negotiate with the seller for them to pay part or all of the remaining costs. This is the best way to get into a house with very little out of pocket expense.

Here is an example to use as a frame of reference.

1. You agree in principal to buy a house for $200,000.
2. The total estimated closing costs and prepaid items is $6,000.
3. Arrange the sales contract to be $206,000 with the seller paying $6,000 in closing costs.
4. The net effect is the same to the seller, but this way you get in the house without writing a $6,000 check.

* Example: For $150,000 loan; 360 monthly payments of $809.26 are based on principal and interest only, and an annual percentage rate (APR) of 5.068%. APR is subject to borrower qualification and subject to change. Third party fees may apply.