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  • EXPERIENCE MATTERS: With over 50-years combined lending experience, Joe and Eric Metzler are your VA home loan experts.

  • Understanding VA Loan Closing Costs in 2025 and Beyond

  • When purchasing a home, you typically face two costs: the down payment and closing costs. VA loans eliminate the down payment for veterans, but like all home loans, they still have closing costs. These fees cover services from multiple parties, including the lender, title company, state and county fees, appraisal, credit report, land surveys, and more—all essential to the loan process.
     
    Additionally, you’ll encounter pre-paid costs like a pro-rated portion of property taxes and the first year of home insurance, paid upfront. Closing costs can add up and may feel overwhelming if you’re new to homebuying.
     
    At VAMortgageMN.com, by Cambria Mortgage, our VA loan experts in Minneapolis, St. Paul, Minnesota, Wisconsin, Iowa, North Dakota, South Dakota, Colorado, and Florida help you navigate these costs for a smoother experience. Call (651) 552-3681 for guidance!

  • Paying VA Closing Costs

    Many veterans mistakenly believe VA loans have no closing costs or that the VA covers them. While this isn’t true, the VA does offer flexible payment options that can make it feel that way.
     
    The most cost-effective method is paying your VA loan closing costs out-of-pocket, but for most, that’s challenging. Fortunately, VA loans provide multiple ways to manage these costs:
     
    • pay out-of-pocket
    • roll them into the loan with seller-paid closing costs
    • roll them into the loan with a higher interest rate
    • or use a combination of these options.
    These flexible solutions mean most veterans can buy a home with minimal upfront costs. Contact the VA loan experts at VAMortgageMN.com or call (651) 552-3681 to explore your options today!

  • Seller Paid Closing Costs

    Rolling your closing costs, or a portion of them into your loan itself is very popular. The actual term for this is seller paid closing costs, which can be very confusion because in the end, the seller isn't actually paying anything - you are. Just over time.

    How it works

    EXAMPLE 1: Take a home the seller is asking $200,000 for. If you offer him $200,000, but ask him to pay $5,000 of your closing costs, the seller has accepted $195,000 in their pocket. You could have bought the house for $195,000 and paid your own closing costs. 

    EXAMPLE 2: Take a home the seller is asking $200,000 for. The seller will accept no less than $200,000 in his pocket, but you really want $5,000 of seller paid closing costs. Therefore you would increase your offer to $205,000 - and have the seller pay the $5,000.

    In both example, you can see YOU are actually paying your own closing costs, but by rolling it into the loan itself, you've eliminated that out-of-pocket expense today.

    The maximum amount VA allows to be rolled into the VA buyer's mortgage is 4% of the purchase price.

    Contact one of our VA Loan Specialists to discuss this option, as this option needs to be written into the purchase agreement by your Real Estate Agent, and can not be an after thought like a lender credit can.

  • Lender Credits

    Another way of rolling in some, or all of your VA loans closing costs is with lender credits. This works by the lender reducing your up-front out-of-pocket closing costs in exchange for a higher interest rate.

    Small reductions in costs are achieved with small interest rate increases, while large reductions in closing costs require larger interest rate increases.

    Again, you see you are paying your closing costs over time in with a slightly higher interest rate versus paying closing costs out-of-pocket.

    Contact one of our VA Loan Specialists to discuss this option.

  • Common Closing Cost Fees

    You can expect all of the following items to be part of your loans closing costs:

    • Appraisal
    • Credit Report
    • State Deed Taxes / Transfer taxes
    • County Recording Fees
    • Title Company costs
    • Title Insurance
    • Lender related costs
    • Loan Origination
    • First year home owners insurance
    • Pro-rated property Taxes

    You also have your VA funding fee. You are allowed to roll this into the loan itself.

    Your VA lender is required to supply you with a Loan Estimate showing you all your costs.

    NON-ALLOWABLE VA FEE

    The VA does mandate that certain fees can not be charged to the Veteran. Mostly the list includes well know junk fees that unscrupulous, and internet lenders try slipping into many loans.