When you refinance your VA-backed home loan, you'll encounter closing costs, which are fees associated with processing and finalizing the new loan. These costs vary depending on the type of refinance, your loan amount, and where you live, but they generally include charges for services like appraisals, title insurance, and recording fees. Understanding these va refinance closing costs helps you budget and compare options when deciding if a refinance is right for you.
Understanding Refinance Closing Costs
Closing costs are the expenses you pay when you close on a mortgage loan, whether it's for a purchase or a refinance. These fees cover a variety of services provided by third parties, such as lenders, title companies, and government entities, to complete the transaction. When refinancing, you're essentially taking out a new loan to replace your existing one, so these services are required again.
The specific closing costs you'll pay for a VA refinance can vary widely. The amount depends on the transaction, lender, and third-party charges shown in your official Loan Estimate. However, the VA limits certain fees lenders can charge on these loans, which can help keep these costs manageable for Veterans and service members.
Types of VA Refinance Loans and Their Costs
The type of VA refinance you choose significantly impacts the closing costs you might pay. The two main options are the Interest Rate Reduction Refinance Loan (IRRRL) and the VA cash-out refinance. Each has a different structure for fees.
Interest Rate Reduction Refinance Loan (IRRRL) Costs
The IRRRL, often called a Streamline Refinance, is designed to help you get a lower interest rate or move from an adjustable-rate mortgage to a fixed-rate mortgage. The closing costs for an IRRRL tend to be lower than other refinance options because the process is streamlined; it generally doesn't require a new appraisal, credit underwriting, or income verification.
Typical IRRRL closing costs may include a funding fee, title insurance, recording fees, and a loan origination fee. Lenders are permitted to charge a flat origination fee of 1% of the loan amount, which covers their administrative costs. The VA also allows lenders to charge for reasonable and customary itemized fees. Many IRRRLs offer the option to roll these closing costs into the new loan amount, which means you pay less out-of-pocket at closing but increase your total loan balance. The borrower is always responsible for these costs, whether paid at closing or financed into the loan. Figures in this example are illustrative for education only. They are not an offer of credit, not a quote, and no rate, APR, payment, or fee is being advertised. Actual terms depend on lender underwriting, your Certificate of Eligibility, and pricing available at the time of application. (Source: VA funding fee and closing costs.)
VA Cash-Out Refinance Costs
A cash-out refinance allows you to take cash out of your home's equity, often to pay off debt, fund home improvements, or cover other expenses. Since this type of refinance involves a new appraisal and a more comprehensive underwriting process, the closing costs are generally higher than for an IRRRL.
Common costs for a cash-out refinance include the funding fee, appraisal fees, title insurance, recording fees, and an origination fee. You will also likely pay for a credit report, survey (if required), and possibly discount points if you choose to buy down your interest rate. Similar to an IRRRL, some of these costs can often be rolled into your new loan amount, though it's important to weigh the long-term impact of a higher loan balance.
The VA Funding Fee
The VA funding fee is a one-time fee paid directly to the Department of Veterans Affairs. This fee helps offset the costs to taxpayers of the loan program and ensures it continues for future generations of service members. It is a mandatory cost for most these loans, including refinances.
The amount of the funding fee depends on the loan type, and on the down payment only for purchase and construction loans. For refinances, the funding fee is 0.50% of the loan amount for an IRRRL. For a VA cash-out refinance, it is 2.15% for a first use of the entitlement and 3.30% for subsequent uses, and the down payment does not change that rate, per the VA funding fee table. You can use our VA funding fee calculator to estimate this cost.
Certain Veterans are exempt from paying the VA funding fee. This includes Veterans receiving VA compensation for a service-connected disability, Veterans who would be entitled to compensation for a service-connected disability but are receiving retirement pay or active duty pay, and qualifying surviving spouses. If you believe you qualify for an exemption, you should provide your lender with the appropriate documentation, such as a VA award letter.
Get your VA Pre-Approval Summary.
Complete the short form and we send back a full VA breakdown: your entitlement, the VA funding fee, and an estimated $0-down monthly payment — with no mortgage insurance, ever.
- Your entitlement and county loan limit (if applicable)
- $0 down payment — no mortgage insurance, ever
- One-time VA funding fee, financeable into the loan
- Estimated monthly payment with taxes and insurance
Summary emailed and shown on screen · Not an approval or commitment to lend
Illustration only, generated from the information you enter. Not a Loan Estimate, pre-qualification, commitment to lend, or approval. Subject to appraisal, credit and income review, VA guidelines, and final lender approval. Not affiliated with, endorsed by, or sponsored by the U.S. Department of Veterans Affairs. Equal Housing Opportunity.
- Purchase price
- $385,000
- Down payment
- $0
- Base loan amount
- $385,000
- Financed funding fee (2.15%)
- $8,278
- Est. monthly payment
- $2,690
Sample figures · Simply Approved Mortgages · NMLS #2620881 · Equal Housing Opportunity
Other Common Closing Costs
Beyond the funding fee, several other costs typically factor into a VA refinance. These can include:
- Appraisal Fee: For cash-out refinances, an appraisal is required to determine your home's current market value. This fee can range from a few hundred dollars to over a thousand, depending on your location and the complexity of the property. IRRRLs generally do not require a new appraisal, although loan structure and lender overlays can affect documentation requirements.
- Title Insurance: This protects both you and the lender from future claims against the property's title. A lender's title insurance policy is commonly required. An owner's title policy is separate and may be optional or handled differently depending on the transaction and state.
- Recording Fees: These are fees charged by your local government to officially record the new mortgage and release the old one.
- Credit Report Fee: The cost for the lender to pull your credit report, primarily for cash-out refinances where credit is re-evaluated.
- Survey Fee: In some areas, or for certain property types, a new property survey might be required.
- Prepaid Items: These include expenses like property taxes and homeowners insurance premiums that are paid in advance or established in an escrow account. While not strictly "closing costs," they are part of the cash you need at closing.
- Discount Points: You might choose to pay discount points to lower your interest rate. One discount point costs 1% of the loan amount. This is an optional cost. (Source: VA funding fee and closing costs.)
The VA sets limits on certain non-allowable fees for Veterans, preventing lenders from charging excessive costs. However, some fees, like the funding fee and real estate taxes, are always allowed.
When a VA Refinance Makes Sense and When It Doesn't
A VA refinance can be a valuable tool, but it's not always the best option. It often makes sense if you can significantly lower your interest rate, shorten your loan term, or consolidate debt with a cash-out refinance. The ability to roll closing costs into the loan can be appealing, but it also means you'll pay interest on those costs over the life of the loan.
You might want to reconsider if the interest rate reduction is minimal, if taking cash out significantly increases your loan balance beyond comfortable payments, or if you plan to move again soon. Refinancing creates a new repayment schedule and new closing costs; the available term depends on the program and underwriting, which might erode any savings if you don't stay in the home long enough to recoup them. You can learn more about specific refinance options on our VA home loan refinancing options page.
Estimating Your Closing Costs and Getting a Quote
To get a clear picture of your potential VA refinance closing costs, you'll need to speak with a mortgage broker. We can provide you with a Loan Estimate, which is a standardized form detailing all projected costs associated with your refinance. This document helps you compare offers from different lenders.
When reviewing your Loan Estimate, pay close attention to Section A (Origination Charges) and Section B (Services You Cannot Shop For). These are lender and third-party fees. Section C (Services You Can Shop For) lists fees where you might have the option to choose providers, potentially saving money.
Understanding the costs involved is a key step in deciding if a VA refinance is the right financial move for you. We're here to help you navigate these details. If you're considering a VA refinance in Florida or Colorado, you can start by exploring our VA loan eligibility requirements or pre-qualify to see your options.
Disclaimer: Simply Approved Mortgages (NMLS #2620881) is a mortgage brokerage arranging residential mortgage loans in Florida and Colorado. We are not a lender, the VA, a government agency, or affiliated with the VA. We do not promise approval, specific rates, or loan amounts. All loans are subject to borrower qualifications and lender underwriting. Eligibility requirements for these loans, including service history and primary-residence occupancy, apply. The VA guarantees a portion of loans made by private lenders; Simply Approved Mortgages does not guarantee loan approval or eligibility. Borrowers are responsible for property taxes, homeowners insurance, HOA dues, and home maintenance.
VA IRRRL calculator: run your own numbers
Edit the fields to see how a new rate changes your payment. Uses the 0.50% VA IRRRL funding fee — there's no monthly mortgage insurance.
Estimates only. Nothing here is an application, pre-qualification, pre-approval, rate quote, rate lock or commitment to lend. You can keep using this tool without giving us anything.
Estimates only — not a loan offer, rate lock, or commitment to lend. Taxes, insurance, and rates vary by county and credit profile.
Related VA Home Loan Resources
Related reading
Sources
This government publication is cited for VA-backed loan program background and general consumer education. Simply Approved Mortgages LLC (NMLS #2620881) is a mortgage broker and is not HUD, FHA, or the CFPB, and is not affiliated with or endorsed by any government agency.
Frequently asked questions
- 01Is this guide a loan approval?
No. This guide is educational. Eligibility, loan amount, and terms are decided by the lender after reviewing your Certificate of Eligibility, credit, income, residual income, and the property. It is not a loan approval, a final offer, or a rate quote.
- 02Who may qualify for a VA-backed loan?
Eligibility is based on service history and confirmed by a Certificate of Eligibility. The home must meet VA Minimum Property Requirements and generally must be occupied as a primary residence. Credit, income, and residual income review still apply.
- 03Do borrowers still have homeowner obligations?
Yes. You keep making the monthly mortgage payment and paying property taxes, homeowners insurance, and HOA dues when applicable, and you maintain the home. VA-backed purchase and cash-out loans generally require you to live in the home as your primary residence.
- 04Is Simply Approved Mortgages a lender?
Simply Approved Mortgages is a mortgage brokerage, NMLS #2620881. It is not HUD, FHA, or a government agency, and program availability depends on lender, investor, state, and federal requirements.
- 05What is the VA funding fee?
The funding fee is a one-time fee paid to VA on most VA-backed loans. The amount depends on the loan type and whether it is a first or subsequent use; the down payment affects the fee on purchase and construction loans only. Some borrowers, including many with a service-connected disability rating, are exempt.
- 06How can I get a detailed breakdown of VA refinance closing costs?
You can receive a detailed breakdown of all projected costs on a standardized Loan Estimate after speaking with a mortgage broker and providing initial information. This document helps you compare offers accurately.
- 07What should I do after reading this guide?
Use the calculator to model a scenario, then request an estimate if you want a licensed loan officer to review your information. Keep comparing options before making a final decision.
Last updated: 2026
