A VA loan can be used to finance 100% of a home purchase by current or former military personnel. It does not require mortgage insurance and doesn't have prepayment penalties. However, these loans, which are backed by the U.S. Department of Veteran's Affairs but made by local mortgage lenders across the country, have specific closing costs rules that veterans should know before speaking to a lender.

Here is a list with important notes about certain fees and the charges you might expect to pay for a VA loan.

VA Funding Fee

The VA charges a percentage of each borrower's loan amount to finance the VA home loan program. The fee amount depends on the amount of your down payment, service type, and whether you are using your VA loan benefit for the first time or again.

These VA funding fees may be used to finance your loan. For example, if you were a regular military member purchasing a $250,000 home with 100% financing, the funding fee would be either 2.15% or $5.375. You can add this amount to your $250,000 loan amount to avoid the usual closing fee.

The Loan Origination Fee And/Or Line-Item Lender Fees

The remaining closing fees may be a percentage (also known as a loan origination charge), or individual line-item fee, or both. If a lender charges an origination fee, the VA will specify which line-item fees may be charged.

The VA allows these fees, regardless of whether the lender charges a 1% origination charge:

• VA appraisal fee

• Credit report

• Stamps, taxes, and recording fees

• Insurance escrow and prorated tax

• Hazard insurance - If it wasn't paid out of pocket by the veteran, outside closing

• Survey and plan for the plot

• Title insurance, title search, and fees for preparation of title work

• Environmental protection lien endorsement

• 1% origination fee

• VA funding fee

• Discount points*

• Closing protection letter (CPL)

• MERS fee

• Fees for well and septic inspection

To lower their rate, borrowers may pay upfront fees. They are calculated as a percentage of the loan amount, similar to origination fees.

The VA will not permit the following fees if the lender charges the origination fee. In addition, the VA will not charge the 1% origination fee if the lender does not charge it. However, fees such as these can still be charged provided they do not exceed 1% of the loan amount.

• Lender's appraisal**

• Lender's inspection

• Settlement fee, Escrow fee, Closing fee

• Preparation fee for documents

• Underwriting fee

• Processing fee

• Application fee

• Pest inspection fee

• If you need to hire an attorney for anything other than title work

• Assignment fee

• Copying fees

• E-mail fee

• Notary fees

• Fee for commitment

• Trustee fee

• Fee for a mortgage broker

• Tax service fee

** The veteran cannot be charged for more than one appraisal unless the VA requests a second.

How To Ask A Lender For Fee Disclosures

These lists are not exhaustive, but they do include the majority of what you will see when you apply for a VA loan.

Federal law requires all lenders to inform you of these fees within three days after your application. Disclosures must be in a particular format to make them easy to understand and read. To compare lenders when you are shopping, all lenders will provide the same forms.

• The initial disclosures of fees will be the Good Faith Estimate and Truth in Lending forms.

• The Loan Estimate will become the initial disclosure fee after August 1, 2015.

After you have submitted your loan application, you can request these disclosures by naming the person.

You'll need to search for a lender specializing in VA loans in your region, as the fees of VA loans can be complex.