Most of what is written about VA loan costs is national boilerplate from lenders. This page is the version I give Lincoln area veterans in person: what the loan actually costs, where the cash goes, and how to think about the Veterans United versus local lender question without anyone selling you anything. I am a Marine veteran and I use these numbers with real buyers every month.
The funding fee: first use versus second use
The VA funding fee is the one real cost that surprises people. It is a one-time fee paid to the VA, not to the lender, and it exists so the program can run without a down payment requirement.
With nothing down, the fee on your first use of the benefit is 2.15 percent of the loan amount. Use the benefit again later and the fee rises to 3.3 percent. That jump is the single biggest difference between a first purchase and a second one. Put 5 percent down and the fee drops to 1.5 percent, and past 10 percent down it drops again to 1.25 percent, first use or not. On a refinance through the streamline program the fee is 0.5 percent.
Two things soften this. First, almost everyone rolls the fee into the loan rather than paying cash at closing, so it costs monthly rather than up front. Second, if you receive VA disability compensation, the fee is waived entirely, on every use. Purple Heart recipients and some surviving spouses are also exempt. The current schedule is always at va.gov, and it is worth checking because Congress adjusts it from time to time.
How much cash you actually need
Zero down does not mean zero dollars. Here is where cash goes on a typical Lincoln area VA purchase, in the order you spend it.
Earnest money. Usually $1,000 to $5,000 in this market, written with the offer. It is not an extra cost, it gets credited back to you at closing, but you need it in the bank the week you make an offer.
Appraisal and inspection. The VA appraisal runs several hundred dollars and a good whole-house inspection is in the same neighborhood. Both are paid before closing, and neither comes back if the deal dies. Budget roughly $1,000 to $1,500 for the pair.
Closing costs. Lender fees, title work, prepaid taxes and insurance. On most purchases this lands somewhere between 1 and 3 percent of the price. The VA caps some of what lenders can charge you, and closing costs can be negotiated into the contract for the seller to pay. Whether that is winnable depends on the house and the competition for it, which is an agent conversation, not a lender one.
What you do not need. A down payment, mortgage insurance, or cash for the funding fee if you roll it in or are exempt. A veteran buying a $300,000 house here can realistically get to the closing table with well under $10,000 out of pocket, and less than that when the seller picks up closing costs.
Veterans United versus a local lender
I get asked this constantly and I do not have a horse in the race, so here is the honest version.
Veterans United is the largest VA lender in the country for a reason. VA loans are all they do, their processors do not get confused by the paperwork, and their online process is genuinely smooth. For a straightforward purchase they are a perfectly good answer, and I close deals with them regularly.
A good local lender offers different strengths. You sit across a desk from the person doing your loan. They know the appraisers working this market, local underwriting quirks, and me and every other agent in town, which matters when a closing date is wobbling and someone has to actually pick up the phone. On pricing, neither one wins automatically. I have seen each beat the other by real money in the same week.
So do the boring thing that works: get a loan estimate from both on the same day and compare rate, fees, and the lender credit line by line. Same-day matters because rates move. Any lender who discourages you from comparing has answered your question for you.
Where I fit in this
The lender handles the loan. What I handle is the other half of what a VA purchase needs: writing the offer so the funding fee and closing costs sit in the right place, knowing which listings will appraise clean and which will fight the VA’s minimum property requirements, and being the one who talks to sellers who have heard bad folklore about VA offers. That folklore costs veterans houses in this market, and pushing back on it is a real part of the job. The rest of how I work with veterans is on the veterans page.
Questions people ask
How much is the VA funding fee for first time versus second use?
With no down payment, the funding fee is 2.15 percent of the loan on your first use of the benefit and 3.3 percent on any use after that. Putting at least 5 percent down lowers the fee to 1.5 percent, and 10 percent or more lowers it to 1.25 percent, regardless of prior use. Veterans receiving VA disability compensation are exempt from the fee entirely, on every use. Check the current schedule at va.gov because it changes over time.
How much cash do I need to buy a house with a VA loan?
Plan on earnest money of $1,000 to $5,000, which is credited back at closing, roughly $1,000 to $1,500 for the appraisal and inspection, and closing costs that usually land between 1 and 3 percent of the purchase price unless the seller agrees to pay them. There is no down payment and the funding fee is normally rolled into the loan, so many Lincoln area veterans close with well under $10,000 out of pocket.
Is Veterans United better than a local lender for a VA loan?
Neither wins automatically. Veterans United specializes entirely in VA loans and runs a smooth process at national scale. A local lender gives you a person you can sit with, plus relationships with the appraisers and agents working this specific market. Pricing goes back and forth between them week to week, so get a loan estimate from each on the same day and compare the numbers line by line before choosing.
Does the VA funding fee have to be paid in cash?
No. Most buyers roll the funding fee into the loan amount, so it is financed over the life of the mortgage instead of paid at the closing table. You can also pay it in cash to keep the loan balance lower, or negotiate for the seller to pay it. And if you receive VA disability compensation you do not pay it at all.
Do sellers in Lincoln accept VA offers?
Yes, though some still carry outdated ideas about VA appraisals and repair requirements. The VA’s minimum property requirements are about safety and soundness, not cosmetics, and a well-prepared VA offer closes as reliably as a conventional one. Part of an agent’s job on a VA purchase is presenting the offer so the listing side understands that, and it is a conversation I have had many times.