On a $700,000 Virginia purchase with zero down, assume a first-use VA funding fee of 2.15%, or $15,050, is financed into the loan. At a hypothetical 6.25% fixed rate for 30 years, principal and interest on $700,000 is about $4,310 per month. Financing the fee raises the balance to $715,050 and the payment to about $4,403 – a $93 monthly difference, or roughly $5,580 across the first five years of payments. That is why a real VA loan closing costs example should separate the cash you need at signing from the costs you choose to finance.
VA financing can be an exceptional purchase tool for eligible veterans and service members, particularly in higher-price markets such as Short Pump, Glen Allen, and Midlothian. But “zero down” does not automatically mean zero cash due at closing. Settlement charges, prepaid homeowners insurance, property-tax reserves, and the VA funding fee all need a plan before you write an offer.
Duane Buziak, NMLS #1110647
Table of Contents
- What a $700,000 VA purchase can look like
- Which VA costs the buyer may pay
- Seller-paid costs and financing choices
- Local Virginia market context
- Why a broker’s process matters
- VA loan closing costs example FAQs
A VA loan closing costs example, line by line
Assume you are buying a $700,000 home in Henrico County, using a VA purchase loan with full entitlement and no down payment. The Federal Housing Finance Agency’s 2026 baseline conforming limit is $832,750, so this price is below the national baseline threshold. VA loans do not use that limit the same way conventional financing does when a qualified borrower has full entitlement, but the figure remains useful when comparing loan structures.
Here is a realistic planning example. It is not a quote, and final numbers depend on the contract, title company, county taxes, insurance carrier, and rate selection.
The base loan is $700,000. The financed funding fee is $15,050, making the final loan amount $715,050. Assume allowable third-party and settlement charges total $9,850: appraisal, title-related services, recording, credit, and permitted processing items. Add $5,300 for prepaid insurance, daily interest, and initial tax reserves. Total closing-related charges are $15,150, excluding the financed funding fee.
If the seller agrees to cover the $9,850 in allowable costs, the buyer’s estimated cash to close is $5,300. The buyer still needs earnest money under the contract, although that deposit is generally credited toward cash due at settlement. If the seller contributes nothing, estimated cash due rises to $15,150. If the funding fee is paid in cash instead of financed, add $15,050 and reduce the loan balance by the same amount.
The better choice depends on liquidity, rate, and how long you expect to own the home. Financing the fee preserves cash for reserves, renovations, or a stronger offer. Paying it upfront lowers the balance and payment. Veterans receiving qualifying VA disability compensation may be exempt from the funding fee, which can change the numbers substantially.
What VA rules allow – and what they do not
VA rules limit certain fees that can be charged to the borrower. The program also allows sellers to pay many closing costs, subject to contract terms and program rules. Seller concessions can be up to 4% of the property’s reasonable value for items treated as concessions, while ordinary buyer closing costs may be handled separately under VA guidelines.
That distinction matters. A seller-paid title charge or appraisal does not always use the same bucket as a concession such as paying off a buyer’s debt. Your contract should be structured carefully rather than relying on a broad “seller pays everything” promise.
Prepaids are frequently the surprise. They are not a fee for originating the mortgage. They are advance deposits for items you will own anyway, including homeowners insurance and property taxes. In Virginia, tax timing varies by locality, so a Chesterfield County closing can produce different reserve requirements than a purchase in Fredericksburg or Virginia Beach.
Local price pressure changes the negotiation
Henrico County’s median sale price was approximately $405,000 in Redfin’s June 2026 county market data, making a $700,000 purchase a move-up or premium-market transaction rather than a typical county sale. In areas such as Short Pump and Glen Allen, limited well-maintained inventory can keep competition active, especially for homes with updated kitchens, first-floor primary suites, and strong school access.
That does not mean seller-paid costs are off the table. It means the offer has to be calibrated. On a home with multiple offers, a buyer may choose a cleaner contract and finance the funding fee. On a listing that has been available for several weeks, asking for the seller to cover $8,000 to $12,000 of allowable closing costs may be reasonable. The right request depends on the list-to-sale trend, inspection findings, and the strength of your overall offer.
A VA appraisal can also identify minimum property requirement issues, particularly with peeling paint, roof concerns, handrails, or incomplete repairs. Addressing those items early helps protect the closing timeline.
Protect your credit while you price the loan
A soft credit pull mortgage review can help establish a working scenario before you decide whether to move forward. Premium Mortgage Rates offers a no hard inquiry mortgage pre approval path through NoTouch Credit Pull, designed to give you a starting point with no credit score impact when available.
A mortgage pre approval without hard pull is useful for early planning, but it is not a substitute for final underwriting. Once you select a property and proceed with a full application, a hard inquiry and complete documentation may be required. A responsible soft pull mortgage broker should explain that distinction clearly, not blur it.
For VA financing, there is no universal minimum score set by the VA program itself, but many broker channels commonly look for scores around 620 or higher. Stronger credit can improve pricing options. For larger conventional or jumbo alternatives, 700-plus scores and documented reserves are often more meaningful. Jumbo files may require six to 12 months of reserves depending on occupancy, debt profile, and loan size.
Broker access versus a single-shelf institution
A high-touch broker process is not simply about filling out an application faster. It is about reviewing the financing choice before you are committed to one institutional menu. For a buyer with military income, self-employment, investments, or a larger purchase price, that comparison can be valuable.
| Dimension | Mortgage broker | Single-shelf institution |
|---|---|---|
| Program access | Can compare eligible VA, conventional, jumbo, bank statement, and other program channels. | Typically offers its own approved menu and pricing structure. |
| Rate strategy | Can evaluate pricing across available broker channels for the same borrower profile. | Uses its institution’s available rate sheet. |
| File guidance | Advisory review can focus on offer terms, seller-paid costs, reserves, and documentation. | Service experience may vary by team capacity and workflow. |
| Complex income | Can identify whether VA, conventional, bank statement, or asset-based options fit the facts. | May be limited to its internal overlays and product set. |
| Credit-first planning | NoTouch Credit Pull can support an early no credit hit mortgage application conversation. | Prequalification procedures vary by institution. |
For eligible buyers in Virginia, Florida, Tennessee, and Georgia, Duane’s 24-Hour Guarantee is built around responsive scenario review and a personalized plan. The objective is simple: know your likely payment, cash to close, and documentation path before the contract pressure starts.
VA loan closing costs example FAQs
1. Are VA closing costs paid out of pocket?
Often, yes. Even with zero down, buyers may pay prepaids, reserves, and any costs not covered by the seller or credits.
2. Can I finance the VA funding fee?
Yes, eligible borrowers may generally finance it into the loan amount. The trade-off is a higher balance and monthly payment.
3. What is the VA funding fee on a first-use, zero-down purchase?
In this example, it is 2.15% of the base loan. Exempt borrowers may not owe the fee.
4. Can a seller pay VA closing costs?
Yes. Sellers can commonly pay allowable buyer costs, subject to the purchase contract and VA rules.
5. How much cash should I plan for on a $700,000 VA purchase?
A practical early target is $5,000 to $20,000, depending on seller credits, prepaids, reserves, and whether the funding fee is financed or exempt.
6. Does a VA loan require a 620 credit score?
The VA program does not set one universal score minimum. Many available broker channels use approximately 620 as a practical benchmark.
7. Will a soft credit pull affect my score?
A soft pull generally has no credit score impact. A full mortgage application may later require a hard inquiry.
8. Can I ask for no-out-of-pocket closing options?
Yes. Ask about our no-out-of-pocket closing options, which may involve seller-paid costs, credits, or a carefully priced rate strategy. Eligibility and final terms apply.
Your offer should never be built on a vague estimate. Before you compete for a home in Richmond, Hampton Roads, or Northern Virginia, put every dollar into a clear worksheet: base loan, funding fee, seller contribution, prepaids, reserves, and the payment impact of each decision.
Legal disclaimer: This article is for general educational purposes only and is not legal, tax, financial, insurance, or real-estate advice. Examples are hypothetical, and rates, fees, program rules, credit requirements, property eligibility, and cash-to-close figures can change. Financing is subject to application, verification, appraisal, title review, program requirements, and approval. Duane Buziak is licensed to originate residential mortgage financing in Virginia, Florida, Tennessee, Georgia, and DC only.
Duane Buziak | Mortgage Maestro | NMLS #1110647 | Coast2Coast Mortgage, LLC NMLS #376205 | Licensed in VA, FL, TN, GA & DC [Contact] | NoTouch Credit Pull available — no hard inquiry, no credit hit.