First-Time Homebuyer Closing Costs Explained | VA Loan Guide 2026

2026 is shaping up to be a challenging year for first-time homebuyers, due to rising insurance costs, tighter underwriting standards, and property tax increases in multiple states. Even popular first-time homebuyer programs are adjusting income limits as the average age of first-time homebuyers continues to rise amid tightening affordability.

But here’s the good news: VA loans remain one of the few mortgage products that didn’t see major fee hikes this year. No PMI, capped lender fees, and zero down requirements mean VA borrowers avoid thousands that conventional buyers routinely pay. Combined with access to down payment assistance for first-time homebuyers and tools like our VA loan benefits guide, you’re looking at one of the lowest upfront-cost paths to homeownership in 2026.

Wallet Math Snapshot (2026):

• Typical conventional buyer upfront cost: $11,200–$18,900
• Typical VA buyer upfront cost: $4,500–$9,800

→ Immediate “avoided loss”: $6,700–$9,100 back in your pocket.

If you're house-hunting in a high-cost state like Florida, exploring the best places to live in Florida or understanding regional tax pressures through our Florida property tax guide can help you estimate future escrow costs more accurately.

Most first-time VA buyers don’t realize how much they can save until they run their personalized numbers. With zero down, no PMI, capped fees, and up to 4% seller credits, the difference can be thousands.

Get pre-approved in minutes and take advantage of a buyer agent commission rebate that can be applied toward your closing costs, where permitted.

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Or estimate your savings instantly using the Rebate Calculator:

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Most first-time buyers ask what closing costs are because they feel like “mystery fees” are added at the end. In reality, closing costs are the bundle of services, taxes, and lender-required steps needed to transfer a home into your name legally. They cover everything from verifying the property’s value to setting up taxes and insurance - and they usually surprise buyers who never calculated how much are closing costs are ahead of time.

Here’s the part most people miss: closing costs for the buyer aren’t optional, and depending on the loan type, they can swing thousands of dollars. Understanding who pays closing costs (you vs. lender vs. seller) is the fastest way to avoid overpaying.

To make it simple, here’s the full breakdown every first-time buyer should expect.

These apply to all buyers, not just VA borrowers:

• Escrow fees
• Appraisal
• Home inspection
• Credit report
• Title search
• Title insurance
• Recording fees
• Prepaids (property taxes, insurance, daily interest)

Math Breakdown (Typical Buyer, 2026):

• Appraisal: $650
• Title + escrow: $1,500–$2,400
• Inspection: $350–$600
• Prepaids: $1,200–$2,200

➡ Total typical cost: $3,700–$5,850 (before lender fees)

If you're coming from renting, this feels like a “new bill,” but it’s simply the cost of transferring legal ownership, not junk fees.

For buyers in Florida and Texas, two of the most active veteran markets, it helps to reference inspection expense comparisons like home inspection costs in Florida or home inspection costs in Texas to understand typical third-party fees.

Here’s where VA buyers win big:

• No PMI - Saves $150–$350/month compared to conventional.
• Limited lender fees - VA caps lender charges to prevent overpricing.
• Zero down payment - Eliminates the highest upfront cost.
• Seller concession rules - Sellers can cover major fees, reducing cash due at closing.

Below is the clean table that first-time buyers rely on when budgeting their upfront costs.

• Total estimated VA closing costs: $6,000–$10,500
• Same buyer with a conventional loan: $10,500–$16,000

➡ Immediate avoided loss: $4,500–$5,500 saved

Before reviewing each fee type, it's helpful to understand broader VA rules like those found in our VA loan closing costs guide.

And if you live in a state with high insurance premiums, compare your budget using BAH rates to estimate cash flow.

Veterans Can Save Up to 1.5% at Closing with reAlpha

Save up to 1.5% on your purchase price by using reAlpha Realty and Mortgage together.

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VA loans consistently run lower than conventional loans because the VA eliminates PMI and caps lender fees. That’s why the average VA loan closing costs sit well below what most first-time buyers expect.

Here’s the simple way to understand it: if you know how to calculate closing costs, you can estimate your upfront cash within 60 seconds. VA closing costs typically range between 2%–5% of the purchase price, depending on the state, tax rates, and whether the seller contributes credits.

• National average (all loans): $9,800–$14,200
• Average VA loan closing costs: $6,000–$10,500
• First-time military buyers: Often $4,500–$8,500 with seller credits
• % of loan amount: 2%–5% (VA remains on the lower end)

On a $400,000 VA purchase:

• Typical VA costs: $8,000
• Conventional buyer: $14,000+

➡ Avoided loss: ~$6,000 saved just by using your VA benefit.

For a deeper comparison, explore how property market trends influence closing costs over time, or learn how appraisals differ in VA lending through VA appraisal requirements.

A conventional borrower in 2026 may lose $350/month to PMI and pay double the lender fees - VA wipes both out.

VA rules lock in fee limits, keeping your upfront cost stable even as the market shifts.

Many first-time buyers don’t realize that seller concessions, VA loan rules are far more generous than conventional loans - and they’re one of the fastest ways to shrink your out-of-pocket cost without touching your interest rate.

Combined with credits, rebates, and negotiated terms, you can walk into closing with far less cash than a conventional borrower. And yes, many buyers also ask whether VA closing costs are included in the loan. I’ll break that down clearly below.

VA rules allow sellers to contribute up to 4% of the purchase price toward your costs, called maximum VA seller concessions. This is powerful because concessions can cover major fees most buyers don’t want to pay out of pocket:

Seller can cover:

• VA funding fee
• Property taxes
• Homeowners insurance
• Discount points
• Appraisal issues
• Even payoff of certain buyer debts

Wallet Math Example:

$400,000 purchase × 4% = $16,000 seller-paid costs

→ That’s enough to wipe out nearly every closing cost for many buyers.

Even with generous VA rules, a few items are off-limits:

• Buyer’s down payment (irrelevant for VA, since down payment = $0)
• Anything above fair market value
• Non-allowable add-ons that artificially inflate the price

Conventional loans often limit seller credits to 3% - VA gives you up to four times that flexibility when combined with lender credits.

Here’s the clean rule that eliminates all confusion:

VA Purchase Loan:

• You cannot roll standard closing costs into the loan amount.
• The only exception is certain energy improvements or seller credits - not typical fees.

VA Refinance (IRRRL / Cash-Out):

• You can roll most closing costs into the loan.
• This is why refinances feel “no-cost” even when fees exist.

Some buyers think rolling costs into a purchase VA loan is allowed “just like FHA.” It’s not, but the 4% seller credit rule often replaces the need to roll them in.

Your VA loan already offers advantages over conventional financing. When combined with seller credits, lender incentives, and reAlpha’s buyer commission rebate, many buyers are able to reach closing with little to no money out of pocket.

Take 60 seconds to check your real costs and unlock your benefits.

• Begin your VA pre-approval
• Compare loan options anytime.

If you’re looking for how you reduce your total loan cost, VA loans already give you a head start - but 2026 offers even more ways to cut cash due at closing.

The goal isn’t just saving money - it’s avoiding losing money you never needed to spend in the first place.

Below is your 2026 tactical playbook: the exact strategies first-time VA buyers use to slash thousands off their upfront expenses.

In a softening market, sellers are more willing than ever to cover your title fees, insurance, or even your funding fee.

• Typical VA buyer savings: $3,000–$8,000
• Maximum allowable: 4% of the purchase price (often $12,000–$16,000)

Conventional buyers often cap out at 3% credits → VA gives you the bigger lever.

You can request a slightly higher rate in exchange for upfront credits.

• Potential savings: $1,000–$3,500
• Smart move if you plan to refinance when rates drop.

Many lenders and title companies waive:

• Credit report fees
• Application fees
• Underwriting fees

These aren’t “promos” - many are permanent military benefits you’re entitled to.

If you receive disability compensation, your VA funding fee = $0.

• Typical savings: $5,600–$14,400 depending on loan size.

Title fees vary wildly - sometimes by thousands.

• Typical difference: $400–$1,100
• Always request 2–3 quotes.

Insurance premiums are rising fast.

• Savings potential: $500–$1,200/year
• Lower premiums = lower escrow setup costs at closing.

ReAlpha gives buyers a large portion of the agent commission back, which can be applied toward closing costs where permitted.

• Typical rebate value: $4,500–$9,000 on a $400,000 home.

This alone can erase nearly all remaining closing costs.

• Seller credits: $6,500
• Lender credits: $2,000
• Title shopping savings: $700
• ReAlpha rebate: $7,500

➡ Total savings: $16,700 avoided upfront

Seeing a real-life breakdown is the fastest way to understand what you’ll actually pay at closing. Below is a realistic $400,000 VA home purchase using current 2026 fee averages, seller concessions, and veteran exemptions. This scenario shows you exactly where the money goes - and how much you keep.

Subtotal (Standard VA Buyer): $17,585

If the buyer has a qualifying disability rating:

• Funding fee = $0
• Seller credit can be used to cover other costs instead
• Their out-of-pocket drops dramatically

Disabled Vet’s Total Costs Before Credits:

$17,585 – $8,400 (funding fee removed)

→ New subtotal: $9,185

With normal seller credits of $13,885 available, the disabled buyer often pays:

➡ $0 due at closing (in many cases with surplus credit applied to rate buydowns)

• Total fees: $17,585
• Minus seller credits ($13,885)

➡ Cash due at closing: $3,700

• Total fees: $9,185
• Minus seller credits ($13,885)

➡ Cash due at closing: $0 (often with extra credits to reduce payment)

• Conventional buyer on the same home: ~$14,000–$18,000 due at closing
• VA buyer (standard): ~$3,700
• VA buyer (disabled): $0

➡ Avoided loss vs. conventional: $10,000+ saved instantly

Buying your first home with a VA loan in 2026 doesn’t have to feel overwhelming - especially when you understand how closing costs work and how many built-in advantages the VA program gives you. Between zero down, no PMI, capped lender fees, and up to 4% seller concessions, VA buyers routinely save $6,000–$10,000+ compared to conventional borrowers. And when you stack smart strategies - like seller credits, lender incentives, title shopping, and your earned military benefits - you can reduce your out-of-pocket cost to a few thousand dollars or even $0 at closing.

Whether you’re budgeting, comparing loan types, or trying to figure out your exact closing costs, the next step is simple: get pre-approved and see your personalized numbers.

Get pre-approved quickly and take advantage of a buyer agent commission rebate that may be applied toward closing costs where permitted, helping many VA buyers achieve immediate savings.

Start your VA pre-approval now.

Or estimate your rebate instantly.

You earned powerful homebuying benefits - let’s make sure you use every dollar of them.