Closing costs aren’t a single bill—they show up at different points as your VA loan moves from application to funding.
Understanding the order helps you avoid surprises, time your cash needs, and spot errors before they complicate closing.
This guide walks through each milestone in plain language—when the Loan Estimate appears, how early out-of-pocket items like appraisal are collected, when the Closing Disclosure locks the numbers, how wires are handled on signing day, and what happens after funding and recording.
You’ll also learn how lender credits, seller concessions, and the VA funding fee fit into the sequence for a smooth, on-time closing.
Key Takeaways:
- Loan Estimate arrives early and frames fees, credits, and projected cash-to-close.
- Appraisal and inspections are paid earlier; title and escrow finalize at closing.
- Closing Disclosure must be delivered three business days before signing.
- Wire or cashier’s check is due on closing day for cash-to-close.
- VA funding fee posts at closing or is financed into the new loan.
- Funding, recording, and first payment dates follow immediately after closing.
Timeline Overview: What “Due” Really Means
Think of closing costs on a VA loan as a sequence, not a lump sum. Some items are collected upfront (appraisal, inspections), others accrue during processing (title, escrow), and the balance is settled at the table. The Loan Estimate frames early expectations; the Closing Disclosure finalizes numbers; your wire covers verified cash-to-close on signing day.
- Framing document: The Loan Estimate outlines initial fees, credits, and cash-to-close within three business days of application.
- Final worksheet: The Closing Disclosure lands at least three business days before you sign, locking figures barring allowable adjustments.
- Payment choreography: Smaller items may be paid earlier; the remainder is due via wire or cashier’s check on closing day after CD review.
More VA Closing Costs Resources
- VA Closing Costs Guide See typical VA fees, who pays them, and saving strategies.
- VA Funding Fee: Rates and Rules Rates by service category, first use vs. subsequent, exemptions explained.
- Finance the VA Funding Fee or Pay at Closing? Pros and cons of financing the fee versus paying cash upfront.
- VA Loan Closing Disclosure Explained Understand each line item, timing, and how to spot errors.
- VA Loan Fees: Current Costs Current lender fees, third-party charges, and common ranges to expect.
- VA Closing Day Checklist Step-by-step tasks to prepare documents, funds, insurance, and utilities.
- VA Closing Costs Timeline When estimates arrive, what's due when, and milestones from start.
- No-Closing-Cost VA Loan Guide How lenders offset fees, rate tradeoffs, and when this option fits.
Stage 1 — Application & Loan Estimate (Days 0–3)
After you provide the six required pieces of application data, lenders must issue a Loan Estimate within three business days. Review it line-by-line: it sets early expectations for lender fees, third-party costs, credits, and projected cash-to-close. This is your checkpoint to question anomalies and align strategy before money moves.
- Check credits carefully: Lender credits reduce cash-to-close but often come from a slightly higher rate; verify the trade in the APR and payment.
- Scope third-party costs: Appraisal, title, and settlement figures are estimates now; expect final invoices closer to closing as work completes.
- Plan cash windows: Flag which items are due early (appraisal) versus at closing (title, escrow, prepaids) to schedule transfers intelligently.
Stage 2 — Intent to Proceed & Early Out-of-Pocket Items
Once you signal intent to proceed, lenders can collect fees for services like the appraisal. Inspections are optional but common. These earlier items are typically paid by card at scheduling, long before your final closing wire is due.
- Appraisal fee: Collected when ordered; amount varies by property type, location, and complexity; non-refundable after inspection scheduling.
- Inspections (optional): General, sewer, roof, or pest may be paid directly to inspectors; useful for planning VA Minimum Property Requirements remedies early.
- Credit report re-pulls: Small vendor charges may post later during underwriting; factor in minor adjustments before the Closing Disclosure.
Stage 3 — Processing & Appraisal Findings
Processing gathers income, assets, and property data. Appraisal findings may trigger repairs, price talks, or credits. If the property needs work, compare normal closing structures with a potential VA renovation loan to solve both condition and budget without delaying the timeline unnecessarily.
- Title open: Title search and preliminary report start now; charges accrue and are settled on the final Closing Disclosure at signing.
- Repair negotiations: If MPR issues surface, negotiate repairs or credits; ensure credits comply with program rules and appear correctly on disclosures.
- Re-quote moment: If you change rate strategy (credit vs. lower rate), expect updated Loan Estimates and later a revised Closing Disclosure.
Stage 4 — Rate Lock, Insurance, and Escrow Setup
Locking the rate locks pricing—so lender credits or discount points are set. You’ll bind homeowners insurance before closing, and your escrow account for taxes and insurance is prefunded on the settlement statement. These items affect cash-to-close but aren’t typically paid until the final wire.
- Rate & credits: A higher rate can generate a credit to offset costs; a lower rate may require paying points—both finalize at lock.
- Insurance binder: Provide proof of coverage; prepaid premium and initial escrow deposits appear on the Closing Disclosure for payment at signing.
- Taxes timing: Closing date and tax cycle determine escrows; expect prorations and reserves to move cash-to-close up or down.
Stage 5 — Closing Disclosure: Your Final Numbers
By law, you must receive a Closing Disclosure at least three business days before signing. This document replaces estimates with finalized invoices, prorations, credits, and your exact cash-to-close. Use this window to verify every line and wire instructions before any funds move.
- Compare to LE: Variations should be explainable (changed services, taxes, credits). Ask for a corrected CD if any errors appear.
- Wire safety: Confirm instructions verbally with title/escrow; never trust emailed wiring changes due to fraud risks.
- Final walkthrough: Schedule after the CD; confirm repairs and property condition align with appraisal and contract commitments.
When the VA Funding Fee Is Paid
The VA funding fee is assessed at closing unless you’re exempt for service-connected disability. It can be financed into the loan or paid in cash. Review official guidance on funding fee and closing costs so your disclosures match eligibility, tier, and use history.
- Finance vs. cash: Financing preserves liquidity but raises the loan amount; paying cash reduces monthly interest cost slightly.
- Exemption evidence: Ensure exemption status is on file before the CD is issued to prevent last-minute rework and re-signs.
- Subsequent use: Usage tier affects the fee percentage; verify the correct tier on the CD before you wire funds.
Stage 6 — Closing Day: Wire, Sign, and Smile
On signing day, you’ll provide your verified cash-to-close via wire or cashier’s check and sign loan documents. Settlement agents reconcile last-minute prorations and confirm the title premium, recording fees, and commissions before final balancing and funding authorization.
- Cash-to-close: The amount on your most recent CD is the target; bring photo ID and follow the settlement agent’s funds policy exactly.
- Review notes: Confirm interest rate, payment, and riders match your lock; keep copies of everything you sign for your records.
- Same-day updates: Minor adjustments can occur; you’ll receive a revised CD if anything material changes at the table.
Stage 7 — Funding, Recording, and Keys
After documents are signed and funds arrive, the lender releases the wire to title. Title disburses, then records the deed and lien with the county. In many states you’ll receive keys after recording; in some, possession timing follows local custom or the contract.
- Disbursements: Seller proceeds, agent commissions, and payoffs are released by title once the lender funds and balances the file.
- Recording day: County recording perfects the lien; your policy and final title documents follow after the recorder posts the transaction.
- Possession: Confirm contract language and local practice; some markets deliver keys at signing, others upon recording confirmation.
Stage 8 — After Closing: First Payment & Escrows
Your first payment date is set on the CD; servicing transfer details arrive by mail. Escrow accounts begin paying taxes and insurance on schedule. Keep your Closing Disclosure and note for tax prep, future refinances, or claims.
- Payment start: First payment typically begins the month after the month following closing; confirm the exact date on the CD.
- Escrow analysis: Servicer reviews balances annually; shortages or surpluses may adjust your monthly payment next year.
- Document storage: Keep the CD, note, deed, and title policy accessible; lenders will request them on future transactions.
Quick Reference Tables
Use these tables as at-a-glance guides for what’s paid when, and who typically pays it. Amounts vary by market and property; always defer to your disclosures and settlement agent for exact figures.
| Fee / Item | Who Typically Pays | When It’s Due |
|---|---|---|
| Appraisal | Buyer | When ordered (after intent to proceed) |
| Home Inspections (optional) | Buyer | At scheduling, pre-closing |
| Credit Report | Buyer (via lender) | During processing; posted on CD |
| Title Search / Settlement | Buyer/Seller (market dependent) | At closing on CD |
| Prepaids & Escrows | Buyer | At closing on CD |
| VA Funding Fee | Buyer (unless exempt) | At closing; can be financed |
| Document | Delivered By | Timing | What To Verify |
|---|---|---|---|
| Loan Estimate | Lender | Within 3 business days of application | Fees, credits, cash-to-close, rate options |
| Closing Disclosure | Lender/Title | ≥ 3 business days before signing | Final cash-to-close, payoffs, prorations |
| Wire Instructions | Title/Escrow | Before closing | Verify by phone to avoid fraud |
| Note & Deed | Lender/Title | At signing | Rate, payment, riders, names |
Related VA Concepts That Affect Timing
A few VA-specific concepts influence what appears on your disclosures and when it’s due. Review these before you lock terms so your timeline, cash plan, and underwriting story move together without surprises or last-minute rework.
- Eligibility & documentation: Align your file with VA loan requirements to prevent late underwriting conditions that could bump the signing date.
- Funding fee basics: Understand your VA funding fee tier and exemption status so the CD is correct the first time.
- Property standards: Anticipate appraisal calls using VA Minimum Property Requirements and plan remedies or credits early.
- Repair financing: If the home needs work, consider a VA renovation loan instead of heavy credits that may complicate appraisal.
- Program fundamentals: Brush up on the overall VA loan process so each cost milestone makes sense in sequence.
Veteran Resources
- VA Home Loan Program — official program overview, benefits, and contact paths.
- VA Eligibility & COE — order or update your Certificate of Eligibility.
- HUD-Approved Housing Counselors — free budgeting and disclosure support.
- CFPB Wire-Fraud Tips — how to verify wiring instructions safely.
- FTC Consumer Protection — avoid scams during home purchase.
Frequently Asked Questions
When do I pay the appraisal fee on a VA loan?
Usually when the lender orders it, after you signal intent to proceed. Payment is made directly to the vendor, often by card. The fee is generally non-refundable once the inspection is scheduled or completed.
What’s the difference between the Loan Estimate and Closing Disclosure?
The Loan Estimate sets early expectations within three business days of applying. The Closing Disclosure presents finalized, invoice-backed figures at least three business days before signing, including exact cash-to-close and wire instructions.
When do I wire my cash-to-close?
On or just before signing, after reviewing the most recent Closing Disclosure. Always call your title/escrow company to confirm wire instructions by phone; ignore emailed changes to avoid fraud risks.
Is the VA funding fee paid upfront or at closing?
It’s assessed at closing and can be financed into the loan or paid in cash. Exempt borrowers don’t pay it, but exemption status must be documented before the Closing Disclosure is issued.
Do seller credits change the timeline of payments?
No. They change who pays and how much you bring to closing, not when items are due. Credits appear on the Closing Disclosure and reduce your verified cash-to-close amount.
What costs are usually paid earlier in the process?
Appraisal and optional inspections are commonly paid before underwriting completes. Title, escrow, recording, taxes, and insurance prepaids are settled at closing as part of your final cash-to-close.
Can lender credits eliminate all my closing costs?
They can offset many costs but typically come from a higher rate. You’re trading upfront cash savings for a slightly larger monthly payment and total interest cost over time.
When is homeowners insurance due?
You’ll bind coverage before closing; the first year’s premium is shown on the Closing Disclosure. It’s either paid in cash at closing or financed into the transaction if your structure allows.
When is my first mortgage payment due?
Generally the month after the month following closing. The exact date appears on your Closing Disclosure and in your welcome letter from the loan servicer after funding.
How do I avoid last-minute surprises at closing?
Audit the Loan Estimate and Closing Disclosure carefully, confirm wire instructions by phone, and provide requested documents promptly. Calendar key dates and keep communication open with your lender and title team.
