For a lot of veterans, owning a home is the bedrock of civilian life, but the true homeownership costs run way deeper than the sale price, a reality that gets lost in a ton of bad information.
Key Takeaways
- Property taxes and homeowners insurance are not covered by your VA loan. They’re mandatory, ongoing bills that can jump up year after year.
- Plan on spending 1% to 4% of your home’s value on maintenance and surprise repairs every single year. Budgeting for it is how you avoid financial trouble.
- Utilities, electricity, gas, water, internet, are a big monthly cost that depends on your home’s size, age, and the local weather.
- Even with a VA loan, you’ll have closing costs. Expect to pay 1% to 3% of the loan amount for things like the appraisal, title insurance, and recording fees.
Myth 1: A VA Home Loan Covers All Upfront Costs
The biggest myth I see is that a VA home loan means you need zero cash to close. It’s true the no down payment feature is a huge advantage, but that single benefit makes people think they don’t need any money at the closing table. That’s just wrong.
The Department of Veterans Affairs (VA) guarantees part of your loan, which is why lenders can give you 100% financing. But closing costs are still your responsibility. These are all the fees from the lender and other parties for getting the loan done. The VA itself lists common ones: the VA funding fee (unless you’re exempt), appraisal fees, title insurance, and recording fees. You might also pay for discount points if you want to buy down your interest rate. Sure, sellers can help with these costs, and sometimes lenders offer credits, but you can’t count on it. For example, in a state like Georgia, closing costs run between 1% and 3% of the loan. On a $350,000 home, that’s an upfront bill of $3,500 to $10,500, even with zero down. That’s a serious amount of cash you need to have ready.
Myth 2: Property Taxes and Insurance Are Fixed or Included in the Mortgage
People often think that property expenses like taxes and homeowners insurance are just static numbers that get baked into your mortgage payment forever. This assumption can lead to some nasty financial surprises down the road. These costs are usually paid from an escrow account, where the lender collects extra money from you each month to pay them on your behalf, but the amounts themselves are anything but fixed.
Local governments set property taxes, and they can go up if property values in your area rise or if the town needs more money. In Fulton County, Georgia, for instance, they reassess property values all the time, and a higher assessment means a bigger tax bill for you. Likewise, homeowners insurance premiums get reviewed by the insurance company every year. Things like storm claims in your region, the age of your roof, or just general market shifts can make your premium shoot up. A recent National Association of Insurance Commissioners (NAIC) report showed premiums rising significantly in many states because of severe weather. If there isn’t enough money in your escrow account to cover these higher bills, your lender will either raise your monthly payment or send you a bill for the difference. And it’s not a one-time thing. You need to be ready for this possibility every year.
Veteran homeowners. Want to lower your monthly payments?
See if a VA Cash Out Loan or VA Home Loan can put cash in your pocket or help you buy with $0 down. A specialist will review your options, free.
- VA Cash Out Loan: use up to 100% of your home’s equity
- VA Home Loan: buy a home with $0 down payment
- No cost, no obligation eligibility check
You’re all set.
A VA loan specialist will reach out shortly to review your Home Loan and Cash Out options.
Myth 3: Home Maintenance is a Minor, Infrequent Expense
If you’re moving from a rental where the landlord fixed everything, you’re likely underestimating how much home maintenance really costs. The fantasy that a new or well-kept house will only need a few cheap fixes here and there is dangerous. A house is a machine with lots of moving parts, and it demands constant attention and sometimes very expensive repairs.
You have routine stuff like cleaning gutters and changing HVAC filters, but then you have emergencies like a burst pipe or a dead water heater. The costs add up fast. A good rule of thumb is to budget 1% to 4% of your home’s value every year for maintenance. For that same $350,000 home, that means you should be putting aside $3,500 to $14,000 annually. This budget covers everything from a simple leaky faucet to having to reseal your entire deck. Think about how long things last: a fridge is maybe 10-15 years, a washer is 10-13, and an HVAC system can be 15-20 years. Replacing them isn’t cheap. A sudden roof leak can cost thousands and will wipe out your savings if you haven’t planned for it. Ignoring the small stuff just makes the big, expensive problems happen sooner. Spending money on preventative maintenance is an investment in your home’s value.
Myth 4: Utilities Will Be Similar to What You Paid Renting
Don’t assume your utility bills in a new house will be anything like they were in your old apartment. That’s a common mistake. For a single-family home, utility costs can be much higher and swing wildly, a calculation most new homeowners don’t make until the first shocking bills show up.
Your bill is a bundle of electricity, natural gas, water, sewer, and trash pickup. The size and age of your home are huge factors. A bigger house just plain costs more to heat and cool. Older houses without modern insulation or energy-efficient windows can be absolute energy vampires. Data from the U.S. Energy Information Administration (EIA) shows that residential electricity prices have been climbing for a decade. Your location matters too, a summer in Atlanta, Georgia, means the AC will be running constantly, but you’ll also have a real heating bill in the winter. Then you have to consider the cost of internet and TV, which are pretty much essential these days. These are ongoing bills that go up and down with the seasons and how you live. Getting past utility bills from the seller can give you a baseline, but at the end of the day, your own habits will determine what you pay.
Myth 5: A VA Loan is Only for First-Time Homebuyers
A lot of people think the VA home loan is a one-and-done deal, something you only get to use the first time you buy a house. That’s totally wrong. You can generally use your VA loan benefit multiple times as long as you’re eligible and have enough entitlement left.
Your VA loan benefit can be restored. For example, if you sell the house and pay off the loan, you can typically get your full entitlement back to buy another home. What if you still own the first home you bought with a VA loan? You might have “bonus entitlement” left over that you can use for a second VA loan, especially if your first loan was for a smaller amount. This flexibility is a huge help for veterans working through 2026 policy shifts for finances who might need to move for a new job, need more space for a growing family, or just want to live somewhere else later on. This shows the long-term power of the benefit. It’s important to know how much entitlement you have left, and a good VA loan specialist can run the numbers for you.
To make homeownership work, you have to get your head around all the costs, not just the number on the sales contract. Veterans need to do their homework and budget for everything to make sure their dream home doesn’t turn into a financial strain.
Does a VA loan cover the VA funding fee?
The VA funding fee is a separate charge that helps keep the loan program running for taxpayers. Most people finance it by rolling it into their total loan amount, but it isn’t waived unless you have a specific exemption (like receiving VA compensation for a service-connected disability).
Can I use my VA loan for an investment property?
You have to live in the property you buy with a VA loan, it has to be your primary residence. You can buy a building with up to four units, but only if you occupy one of them. You can’t use the loan for a pure rental property that you don’t live in.
Are there income limits for a VA home loan?
The VA doesn’t set an income cap. However, just like with any mortgage, the lender will look at your income, credit, and debt-to-income ratio to make sure you can actually afford the payments.
What is the “entitlement” for a VA loan?
Your VA entitlement is the dollar amount the VA promises to guarantee for your lender. It comes in two parts: basic and bonus entitlement. How much you have determines the maximum loan you can get with no down payment, which also depends on local loan limits.
Do I need excellent credit to get a VA loan?
The VA doesn’t have a minimum credit score requirement, but the banks that actually issue the loans do. Most lenders want to see a score of 620 or higher. Having a better credit score usually gets you a better interest rate, too.
