FAQ; Closing Costs VA Loan

Are There Closing Costs When Buying a Home with a VA Loan?


Yes, there are. The VA has strict guidelines on how much the lender can charge for closing costs, however. There are differences in what can be charged for closing costs depending on what type of VA loan you’re getting – new purchase, cash-out refinance, or streamline refinance. We’ll cover some general information about closing costs on VA loans in this article. For more specific information about closing costs on a cash-out refinance or Interest Rate Reduction Refinance Loan, check out the articles written for the Frequently Asked Questions about them. As mentioned, there will be closing costs associated with your VA loan.


Closing costs that you as the borrower may be faced with fall under 3 categories: fees that can be charged regardless of whether the lender chooses to charge a 1% origination fee, fees that can only be charged if the lender does not charge a 1% origination fee, and fees that the lender is not allowed to charge the borrower no matter what. It’s important to know what those fees are and what the lender is charging you for two reasons: first, you want to have realistic expectations of what’s coming your way, and second, you want to be your own first line of defense against a lender charging you more than they should. So, here is a list of fees and charges that can be charged no matter what:


  • Appraisal fee – per allowable maximum appraisal fee schedule for that state
  • Compliance inspection – only if required by the NOV
  • Credit report – in most cases it should not exceed $50
  • Recording fees, taxes and stamps
  • Prorated tax and insurance escrow
  • Hazard insurance – if it was not paid directly out of pocket by veteran outside closing
  • Survey and plot plan
  • Title insurance, title policy, title exam, title search, title endorsement and any fees
  • required to prepare title work
  • Environmental protection lien endorsement
  • 1% origination fee
  • VA funding fee
  • Discount points
  • Closing protection letter – sometimes just listed as “CPL” (should not exceed $35, except
  • in Pennsylvania it is $75)
  • Interthinx DISSCO fraud protection report
  • MERS fee
  • Well and Septic inspection fees
  • Express mail fees (only for cashout refinances and IRRRL’s) – actual cost should be reasonable. If not question it (over $50 should be questioned – ask for actual invoice)


The lender has a choice; he or she can charge a flat 1% origination fee in addition to the above charges, or they can itemize any of the charges below to make up the rest of their fee. You’ll want to make sure that you’re clear on what your lender is planning on doing for your loan. Here is a list of fees they can charge you for closing costs if they do not take a 1% origination fee:

Lenders Approval

  • Lender’s appraisal – the veteran can only be charged for 1 appraisal unless VA deemed
  • a second appraisal mandatory
  • Lender’s inspection – if it is not required on the appraisal/NOV, it can not be charged to
  • the veteran
  • Settlement fee, escrow fee, closing fee
  • Document preparation fee
  • Underwriting fee
  • Processing fee
  • Application fee – a veteran can be charged up front the cost of the appraisal and credit
  • report to ensure the loan officer is not stuck with those fees if the veteran walks away
  • from the deal.
  • Pest inspection fee
  • Attorney fees if for something other than title work
  • Assignment fee
  • Copying fee
  • E-mail fee
  • Fax fee
  • Photographs
  • Postage fees if not a cashout refinance or IRRRL
  • Amortization schedule
  • Notary fee
  • Commitment fee
  • Trustee fee
  • Truth in lending fee
  • Mortgage broker fee
  • Tax service fee


Now, while the above list is quite long, it does not necessarily cover everything. Your lender may charge a fee that is not listed above and that does not necessarily mean that you’re being cheated. If this happens, you should check with your city, county, and state governments to see if the fee is mandated by any of those bodies. If it is not, and it is not on the allowable fees list, chances are you shouldn’t be being charged it. Lastly, here is the relatively short list of fees that come up often enough that the VA has added them to this list of fees that are never permitted:

VA Loan Thumbs Up

  • Termite/Pest inspection
  • Attorney fee charged as a benefit to the lender
  • Mortgage broker fee
  • Realtor Commission
  • Prepayment penalties
  • HUD/FHA inspection fees for builders

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