How Much Cash Do You Need to Buy a Home With a VA Loan?
AI-generated illustrations for this guide.
You may be able to buy with a VA loan and put $0 down. You may still need cash before and at closing. Plan for an offer deposit, a home inspection and your share of closing costs. If you owe a VA funding fee, you can roll it into the loan or pay it at closing.
Ask for two numbers when you find a home you like. How much will you pay before closing? And how much will you still need on closing day?
What might you pay before closing?
Earnest money is a deposit you may agree to pay after the seller accepts your offer. Your contract sets the amount, the due date and when you can get it back. If you buy the home, look for that deposit in the cash-to-close section of your Loan Estimate. It counts toward what you owe, so you don’t pay it twice.
A home inspection helps you spot repairs you may need to pay for. You may pay the inspector before closing. Ask when the lender will collect the appraisal fee, too. A VA appraisal gives an opinion of value and checks basic VA property rules. An inspection gives you a closer look at the home’s condition.
What might you owe at closing?
| Cost | What to check |
|---|---|
| Down payment | You may qualify for $0 down. If too little of your VA loan benefit is available for the loan you want, your lender may require money down. You can also choose to put money down to borrow less. |
| Appraisal gap | If the home appraises below your offer and you still buy at that price, you’ll need cash to cover the gap. |
| Loan and closing fees | Look for lender fees, the appraisal, title costs and recording fees. Ask which bills you’ve paid and which are still due. |
| Costs paid ahead | Look for your first home insurance bill, interest due up front and any taxes due at closing. |
| Money set aside for future bills | If your loan has an escrow account, check how much goes into it at closing for future tax and insurance bills. |
| VA funding fee | If you’re exempt, the fee is $0. If you owe it, you can pay it at closing or add it to the loan. |
Before you offer, ask your lender how much you can borrow with $0 down. If part of your VA benefit is still tied up in another loan, your lender can check what’s left. VA calls that amount your remaining entitlement. If zero down won’t work at that price, compare putting money down with shopping at a lower price. The home’s appraisal still needs to support the price for zero-down financing.
Use costs for the home you’re buying. Ask what your tax bill may be as the new owner, and get a written insurance quote for the address. Near the coast, ask if your quote covers wind damage and if you’ll need separate flood insurance. See what else to budget for in our South Carolina coastal home costs guide.
Will you pay a VA funding fee?
The VA funding fee is a one-time charge that generally applies even with $0 down. You may be exempt if you get VA pay for a service-connected disability. VA also lists other cases. These include some surviving spouses and active-duty Purple Heart recipients who provide proof by closing. Check your status with your lender and see the VA’s fee chart and list of exemptions.
On a VA-backed purchase with $0 down, the fee is generally 2.15% of the loan amount on first use or 3.3% after first use if you owe it. If you choose to put money down and owe the fee, the rate drops to 1.5% at 5% down and 1.25% at 10% down. Ask for both the total cash due and the monthly payment before you use savings to get a lower fee.
On a $350,000 base loan, a 2.15% fee is $7,525. Pay it up front and it adds $7,525 to what you owe at closing. Roll it in and your starting loan balance is $357,525. You’ll pay interest on the added amount over time.
Would a seller credit or a lower price help more?
If cash is tight, ask whether the seller would cover some of your closing costs. If you have enough for closing and want to borrow less, a lower price may help more. Ask your lender to show both offers side by side before you decide.
The VA treats seller-paid loan closing costs and seller concessions separately. Its 4% cap applies to concessions, such as a seller paying your VA funding fee. The cap is based on the VA’s value for the home. Ask your lender which costs the seller can cover and how much of the credit you can use.
Two offers on the same home
Suppose you’re buying a $350,000 home with zero down. You’re exempt from the funding fee and already paid a $2,500 deposit. Your closing costs, including taxes and insurance you pay ahead, come to $6,200. Here’s how a $3,000 seller credit could compare with a $3,000 price cut.
| Offer | Loan amount | Still due at closing |
|---|---|---|
| $350,000 with a $3,000 credit | $350,000 | $700 |
| $347,000 with no credit | $347,000 | $3,700 |
Both offers assume the home appraises for at least the price you pay, the closing costs stay the same and you can use the full credit. The cash in the table is what you’d still owe after your deposit. A separate inspection bill would still be part of your budget. At the same rate and term, the smaller loan has a lower loan payment.
You can also ask about a lender credit. It can lower what you bring to closing and may come with a higher rate. Ask what it does to your monthly payment.
How do you check the amount you’ll need?
Before you make an offer, ask for a cost breakdown using the price and address. Tell your lender if you’ll ask the seller for help. Once you have a Loan Estimate, look for Estimated Cash to Close. Check that the deposit you’ve paid and any agreed credit reduce what’s still due. Ask which bills you’ll pay before closing so you can plan for those too.
Compare those numbers with the Closing Disclosure you get at least three business days before closing. Ask about changes before you send money. Set aside cash for the move and for the first repairs you may face once you get the keys.
Common questions about cash for a VA purchase
Can I roll all my VA closing costs into the loan?
For a VA purchase, you can roll in the VA funding fee if you owe it. You’ll still need to cover the other closing costs with cash or any seller or lender credits you can use.
What if the VA appraisal comes in low?
If you offer $350,000 and the home appraises at $340,000, the gap is $10,000. You can ask the seller to lower the price or ask your lender to review the value if there’s evidence it should be higher. If the value stands and you buy at the original price, you’ll need cash for the gap. Ask your agent how the VA escape clause can let you walk away and keep your earnest money.
Can I close with no money due that day?
It can happen if you qualify for zero down and credits or earlier payments cover what you owe. You may still have paid for the inspection or other costs along the way. Check the final cash-to-close line before you count on bringing $0.
More help with your VA home purchase
South Carolina VA loans
See how the benefit works and what you’ll need to apply.
Estimate a monthly payment
Try a home price, taxes and insurance to see how the payment could change.
Buying near Parris Island
Think through where to live and how long you plan to stay.
Looking in a specific area? Explore VA loans in Beaufort, Charleston, Columbia, Greenville, Hilton Head Island or Myrtle Beach.
Want help working out what you’ll need to close?
Share your price range or the address you have in mind. We’ll help you sort out what you might pay up front, what could be due at closing and where a seller credit might help.
General education. Loan terms and eligibility depend on a full review. Beaufort Lending, NMLS #1703543. Equal Housing Opportunity.