VA Loan Calculator | Discover Your Monthly Home Loan Payment
Posted on: February 19, 2020
As an active-duty servicemember or Veteran, you have access to one of the best mortgage products on the market — the VA home loan. It requires no down payment, no monthly mortgage insurance, and has lenient credit requirements.
As of January 2020, eight percent of all home-purchase loans were VA home loans.— Ellie Mae’s Origination Insight Report
This VA home loan calculator shows your overall buying power, including today’s current VA funding fees, estimated property taxes, and HOA dues. With zero down payment and no private mortgage insurance (PMI), you may be surprised at how much you can afford.
VA Loan Calculator
- Principal and Interest
- Property Tax
- Homeowners Insurance
*You could save up to $3,000 in interest payments by comparing rates from multiple lendersRequest Rates
VA home loan rates for 2020
Mortgage insurance rates for VA home loans are currently at historic lows. In fact, VA mortgage rates today are generally lower than other loan types like conventional and FHA. For example, Ellie Mae Janaury 2020 Origination Report states that the average interest rate for VA home loans is 3.64%, while the average interest rate for conventional loans is 4.03% and FHA loans is 3.91%.
Interest rates vary and depend on multiple factors like credit score, down payment amount, and interest rate type, so every home buyer’s rate is unique to their situation.
Qualifying for a low interest rate is important for VA home buyers.
Qualifying for the lowest possible rate gives home buyers three distinct advantages:
- Lower monthly payments
- Lower overall interest costs over the life of the loan
- More buying power (lower mortgage payments mean you can afford a more expensive home)
Each lender offers different interest rates and terms, it’s best to comparison shop with multiple lenders. Not only will this ensure you’re getting the best rate, you may be able to negotiate better terms and fees for your loan as well.
VA mortgage calculator definitions
Down payment. This is the amount you put towards the purchase of your home. The VA requires no down payment, unlike other loan types, which generally require at least 3 to 10 percent.
Funding fee. The VA requires an upfront, one-time funding fee payment to help sustain the program. It’s why lenders are able to offer zero-down loans with low rates. The fee is either wrapped into the loan amount or paid in cash at closing.
Funding fee percentage. The percentage you’ll be charged will depend on down payment and whether you’ve used a VA loan before. The most common funding fee is 2.3% of the loan amount, or $2,300 for each $100,000 borrowed.
HOA/other. If you’re buying a condo or a home in a Planned Unit Development (PUD), you’ll likely be responsible for homeowners association (HOA) dues. Lenders factor in this cost when determining your debt-to-income ratio.
Homeowners insurance. Lenders require you to insure your home from damages like fire. The fee is generally added to your monthly mortgage payment, and paid for you by the lender.
Interest rate. The mortgage rate your lender charges for the loan. Pro tip: Shop around with multiple lenders to find the best rate for you.
Loan term. The number of years you have to pay off the loan (assuming you haven’t made additional principal payments). Typical loan terms are 30 or 15 years.
Principal and interest. The principal is what you’ll pay every month towards the loan balance, while the interest is the amount you pay your lender for lending you the money.
Property tax. You’ll owe the county or municipality where the home is located yearly taxes. Your lender will collect this as part of your monthly mortgage payment — the yearly cost is split in 12 installments. (Calculator estimates are based on averages from tax-rate.org.)
Service type. The funding fee percentage changes based on the type of military service. Servicemembers in the Reserves have slightly higher fees than those who are active-duty.
VA loan use. If you’ve used a VA loan to purchase or refinance a property previously, then higher funding fees will apply.
VA mortgage eligibility
Interested home buyers should confirm their eligibility with a VA lender as each servicemembers situation is unique. That said, there are general eligibility guidelines, including:
- Eligible military service (typically, two years active duty or six years in the Reserves/Guard)
- A credit score of 620 or higher (some lenders may accept lower)
- A debt-to-income (DTI) ratio of 41 percent or less
- 1-2 years of consistent employment history
- Property meets VA minimum property requirements
VA funding fees
|Type of Veteran||Down Payment||First-time Use||Subsequent Use|
VA loan limits
As if January 1, 2020, VA-eigible borrowers can get any size loan with no down payment. There are no official limits.
But remember, you’ll still have to qualify for the mortgage.
Apply for a VA loan
If you’re a homebuyer with military experience, then see if a VA loan is the right mortgage product for you. Many active-duty servicemembers and Veterans are eligible to purchase a home with zero down payment and a low monthly payment — many just don’t know it yet.