A veteran buying a $350,000 home with zero down could finance a $7,525 VA funding fee, creating a $357,525 loan. At an illustrative 6.25% fixed rate, principal and interest is about $2,202 per month. At 6.625%, it rises to about $2,288 – a difference of $86 monthly and $5,160 over five years before considering how much faster the lower-rate loan pays down. That is why a VA home purchase example should start with real math, not a generic promise of zero down.
The rates above are illustrations, not a quote. For the current weekly national mortgage-rate benchmark, review https://www.freddiemac.com/pmms. Your VA rate depends on credit, debt-to-income ratio, occupancy, loan amount, discount points, and the broker’s available pricing on the day you lock.
Duane Buziak, NMLS #1110647
Table of Contents
- A $350,000 VA purchase, worked line by line
- What zero down does and does not mean
- VA closing costs, credit standards, and entitlement
- Broker comparison versus single-shelf pricing
- How to compare without a hard inquiry
- VA home purchase example FAQs
A VA home purchase example, line by line
Assume an eligible buyer is purchasing a primary residence for $350,000. The buyer has full VA entitlement, makes no down payment, and is not exempt from the funding fee. This is a clean illustration, but the same framework works for a condo, a newly built home, or a purchase with seller credits.
The purchase price is $350,000. With zero down, the base loan amount is also $350,000. For many first-use VA borrowers making no down payment, the funding fee is 2.15% of the base loan amount. Here, $350,000 multiplied by 2.15% equals $7,525. If financed, rather than paid at closing, the final loan amount becomes $357,525.
At 6.25% on a 30-year fixed loan, the principal-and-interest payment is approximately $2,202. At 6.625%, it is approximately $2,288. The $86 difference is not a forecast or a guaranteed savings figure. It is the direct payment effect of a 0.375-percentage-point difference on this specific financed balance. Over 60 payments, that difference totals about $5,160.
Property taxes, homeowners insurance, and any homeowners association dues are separate from that calculation. They can materially change the total housing payment, which is why comparing only an advertised rate is incomplete. A complete Loan Estimate shows the projected cash to close, payment, prepaid items, and lender credits or points.
Some veterans are exempt from the VA funding fee because of service-connected disability compensation or qualifying status. The Department of Veterans Affairs explains funding-fee exemptions and current purchase-loan rules at https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/. If exempt, this example’s financed balance would remain $350,000, lowering the payment at the same rate.
What zero down does and does not mean
Zero down means a qualified VA buyer may not need a down payment. It does not mean a home has no upfront costs. Buyers may still have earnest money, inspection costs, appraisal costs, prepaid taxes and insurance, and title-related charges. Depending on the transaction and credits negotiated, a reasonable planning range for total closing costs and prepaids is often 2% to 5% of the price.
On a $350,000 purchase, that planning range is $7,000 to $17,500. The actual amount can be lower or higher based on taxes, insurance timing, title fees, discount points, and seller concessions. VA rules limit certain buyer-paid charges, and sellers may pay allowable costs and concessions within program limits. A no-out-of-pocket closing option can be possible when pricing, seller credits, and eligible credits line up, but it should be evaluated against the rate and long-term cost rather than assumed.
VA loans also do not require monthly mortgage insurance. That can make a meaningful difference compared with low-down-payment conventional financing. Still, conventional may be competitive for a buyer with substantial down payment, excellent credit, or a situation where VA entitlement is partially used. The right choice depends on the complete payment and cash-to-close comparison.
Credit, entitlement, and loan-size details
The VA itself does not publish a universal minimum credit score. Many VA programs use a 620 score as a common underwriting threshold, while some scenarios may be reviewed at 580 or below only with stronger compensating factors and a broker’s available program. Credit score is not the entire file: stable income, payment history, residual income, debts, and property appraisal all matter.
For borrowers with full entitlement, VA does not impose a county loan limit simply because the purchase price exceeds the conventional baseline. For borrowers with partial entitlement, county limits and remaining entitlement calculations can affect whether a down payment is needed. As a conventional comparison point, the 2025 baseline conforming loan limit was $806,500, with a high-cost ceiling of $1,209,750, as published by https://www.fhfa.gov/data/conforming-loan-limit.
Reserves are not a universal VA requirement for a standard primary-residence purchase, but they can be required in specific underwriting situations, especially for multi-unit properties, layered risk, or manually underwritten files. A practical reserve target is two months of the proposed housing payment when a file has tight debt ratios or variable income. That is a planning benchmark, not a VA rule that applies to every buyer.
Broker comparison versus single-shelf pricing
A rate shopper is not only comparing companies. They are comparing access models. A mortgage broker can review pricing and guidelines across participating wholesale sources, while a single-shelf model evaluates the programs and pricing available within its own channel. Neither format guarantees the lowest cost on every loan, but the process should make the trade-offs visible.
| Comparison point | Broker with wholesale access | Single-shelf pricing model |
|---|---|---|
| Rate and fee options | Can compare available wholesale pricing across multiple sources | Reviews the pricing available through one company’s channel |
| VA guideline fit | Can match the file to participating VA program overlays | Uses its in-house VA overlays and program menu |
| Credit review | May begin with a soft-pull comparison where available | Process and credit-pull policy vary by company |
| Pricing transparency | Can show payment, rate, points, and credits across options | Can show its offered terms, subject to its available shelf |
| Best use case | Buyers who want to compare structures before choosing a path | Buyers who prefer one company’s process and product menu |
Compare without making a hard inquiry your first move
A no hard inquiry mortgage pre-approval conversation can help a buyer understand likely payment ranges before applying formally. A soft pull mortgage comparison is designed to review credit information without the credit hit associated with a hard inquiry. It is useful early in the search, particularly when a buyer is weighing VA against conventional financing or deciding whether to use seller credits for closing costs or a rate reduction.
A soft pull is not the final approval. A full application, property review, income documentation, and underwriting are still required before closing. The value is simple: fewer assumptions before you write an offer. The Consumer Financial Protection Bureau explains how mortgage disclosures help consumers compare offers at https://www.consumerfinance.gov/owning-a-home/loan-estimate/.
For buyers in Virginia, Florida, Tennessee, Georgia, Washington, D.C., North Carolina, South Carolina, or Maryland, FreeMortgageSearch.com offers a free mortgage search tool and NoTouch Credit Pull option to begin that comparison without a hard inquiry. Ask for the same loan amount, occupancy, estimated closing date, and lock period in every scenario. Otherwise, two quotes that look similar may not be comparable.
VA home purchase example FAQs
Can I buy a $350,000 home with a VA loan and zero down?
Yes, if you meet VA eligibility and underwriting requirements and the property appraises at or above the supported value. Full entitlement can allow zero down regardless of county loan limits.
Does a VA loan always include a funding fee?
No. Eligible exempt borrowers do not pay it. For other borrowers, the amount depends on down payment, prior VA-loan use, and current VA fee rules.
Can the VA funding fee be financed?
Usually, yes. Financing it raises the loan balance and monthly payment, while paying it at closing reduces the financed amount.
Is there a minimum credit score for VA loans?
The VA does not set one universal score. A 620 score is common, but program overlays and the full financial profile determine eligibility.
Do VA loans have monthly mortgage insurance?
No. VA purchase loans do not carry monthly mortgage insurance, though the funding fee may apply unless the borrower is exempt.
How much should I budget for VA closing costs?
A planning range of 2% to 5% of the purchase price covers many situations, including prepaids. Seller credits and pricing credits can change the cash required.
Will a soft pull hurt my credit score?
No. A soft pull does not create the score impact associated with a hard credit inquiry, though a full application may later require a hard pull.
Can I compare a VA loan with conventional financing?
Yes. Compare principal and interest, total payment, closing costs, funded fees, points or credits, and how long you expect to keep the loan.
The most useful number is not the headline rate. It is the payment and cash-to-close structure that still makes sense after you account for your timeline, funding-fee status, and the homes you are realistically considering.
Legal disclaimer: This material is for educational purposes only and is not a commitment to lend, an approval, or a guarantee of rates, terms, or eligibility. Illustrations are estimates and exclude taxes, insurance, association dues, and other transaction-specific items unless stated. Loan availability and terms are subject to credit, income, assets, occupancy, property, appraisal, underwriting, and program requirements. Coast2Coast Mortgage, LLC originates mortgage loans only in VA, FL, TN, GA, DC, NC, SC, and MD. North Carolina consumers may verify license information through https://www.nmlsconsumeraccess.org/.
Duane Buziak | Mortgage Maestro | NMLS #1110647 | Coast2Coast Mortgage, LLC NMLS #376205 | Licensed in VA, FL, TN, GA, DC, NC, SC, MD | (804) 212-8663 | duane@coast2coastml.com | NoTouch Credit Pull available — no hard inquiry, no credit hit.
