One of the biggest advantages of a VA loan is that eligible borrowers may be able to buy a primary residence with no required down payment and no monthly private mortgage insurance.
But zero down does not automatically mean zero dollars out of pocket.
Let’s use a $300,000 home as a simple example and break down the mortgage payment and potential cash needed at closing.
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Updated for September 23 2026
What Makes Up a VA Mortgage Payment?
Your total monthly housing payment may include:
- Principal
- Interest
- Property taxes
- Homeowners insurance
- HOA dues, if applicable
- Flood insurance, if required
One thing you generally will not have is monthly PMI.
The VA confirms that its home-loan program does not require monthly mortgage insurance, although borrowers may owe a one-time VA funding fee unless they qualify for an exemption.
Example: $300,000 VA Loan With Zero Down
Assume an eligible borrower purchases a $300,000 home with no down payment.
If we use the original video’s hypothetical assumptions:
- Purchase price: $300,000
- Base loan amount: $300,000
- Property taxes: $3,700/year
- Homeowners insurance: $2,000/year
Taxes and insurance would equal approximately $475 per month.
At a hypothetical 6% interest rate, principal and interest on a $300,000, 30-year loan would be approximately $1,799 per month.
That puts the estimated total payment around:
$2,274 per month
before HOA dues, flood insurance or other property-specific costs.
At today’s national average VA rate of roughly 6.86%, that same $300,000 loan would have principal and interest of approximately $1,968 per month, bringing the same hypothetical tax-and-insurance example to roughly $2,443 per month.
Actual rates and insurance costs may be very different.
Do Not Forget the VA Funding Fee
This is one of the biggest pieces buyers overlook.
For a first use of the VA benefit with less than 5% down, the current VA funding fee is generally 2.15% unless the borrower qualifies for an exemption.
On a $300,000 base loan, that would equal:
$6,450
The borrower may generally finance that fee into the mortgage instead of paying it in cash.
If financed, the loan amount would become approximately $306,450, which would increase the monthly principal-and-interest payment.
Certain Veterans and other eligible borrowers are exempt from the funding fee.
How Much Cash Do You Need to Close?
This is where VA financing can get really interesting.
Even with zero down, the buyer may still have closing costs and prepaid expenses such as:
- Title charges
- Lender fees
- Appraisal
- Homeowners insurance
- Property taxes
- Prepaid interest
- Escrow deposits
But the seller may be able to help.
How Do VA Seller Concessions Work?
There is a lot of confusion around this.
VA does not simply say, “the seller can pay 6%.”
Instead, VA allows the seller or builder to pay some or all normal allowable closing costs.
Separately, seller concessions—things such as paying the VA funding fee, prepaid insurance or certain debts—are generally limited to 4% of the property’s reasonable value.
On a $300,000 home:
4% = $12,000
And normal seller-paid closing costs are not necessarily included in that 4% concession calculation.
That means a properly negotiated VA purchase may allow the seller to cover a substantial amount of the buyer’s upfront costs.
Can You Buy With Almost Nothing Out of Pocket?
f you qualify for zero-down VA financing and the seller agrees to cover enough allowable closing costs, your required cash at closing could be very low.
But I would never promise “zero cash to close.”
You may still need funds for items such as:
- Earnest money
- Inspections
- Appraisal, depending on how the transaction is structured
- Costs not covered by seller credits
- Any required difference if the appraisal comes in below the contract price
The final amount depends on the actual property, lender, seller negotiation and your VA eligibility.
The Bottom Line
VA loans can be one of the strongest mortgage programs available to eligible Veterans and service members.
You may have:
- No required down payment
- No monthly PMI
- Competitive VA financing
- Flexible seller-paid closing-cost options
- The ability to finance the VA funding fee when applicable
But always run the real payment, not just the loan amount.
Use the mortgage calculator to estimate your payment and the closing cost calculator to estimate your cash needed to close.
You can also learn more about the full VA loan program or complete Mortgage Match to compare options for your situation.
Compliance Disclaimer
This content is for educational purposes only and is not a rate quote, loan estimate, commitment to lend or guarantee of financing. Payment examples are hypothetical and may include principal, interest, taxes and insurance assumptions that differ from your actual transaction. Rates, APRs, points, fees, property taxes, insurance premiums and closing costs vary by borrower, property, lender and market conditions. VA eligibility, entitlement, funding-fee exemptions and seller-paid costs are subject to VA and lender guidelines. Zero down does not necessarily mean zero cash required at closing. Loan approval is subject to credit review, income, assets, property eligibility, appraisal and underwriting. Andes Mortgage LLC, NMLS #2187991. Marcos Zambrano, NMLS #988935. Equal Housing Opportunity.
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