DISCLAIMER: The VA has determined the acceptable debt-to-income ratio to be 41%, and this is used as a guide in the calculations above. The debt-to-income ratio is a ratio of total monthly debt payments (housing expense, installment debts, and so on) to gross monthly income. In circ*mstances where the ratio exceeds 41%, the VA automatic underwriter can consider the ratio in conjunction with all other credit factors. Calculations by this tool are believed to be accurate, yet are not guaranteed. Further review is necessary to obtain an exact qualification.
How the VA Mortgage Calculator Works
VA loans are mortgages guaranteed by the U.S. Department of Veterans Affairs (VA) offered to Veterans, active-duty military, National Guard members, reservists and surviving spouses.
To determine your monthly VA mortgage payment, input the numbers that fit your unique homebuying or refinancing situation. The calculator automatically updates your estimated VA loan payment as you change the fields. In the "Advanced Settings" section, you can update the property taxes and home insurance estimates for your specific location. For additional information regarding your monthly mortgage payment, there is a payment breakdown and amortization schedule located beneath the calculator.
What’s Included in a VA Mortgage Payment?
Knowing what is included in your mortgage payment is essential to accurately estimating how much house you can afford while staying within your budget. Our calculator features key elements, including the price of the home, your down payment amount, the current interest rate and the VA funding fee. Check out the chart below for a breakdown of each major component.
| Components | Description |
|---|---|
| Home Price | Home price is the amount of money you pay for a property, usually determined by local market conditions. |
| Down Payment | The down payment is the upfront amount you pay towards the principle of your loan. VA loans are $0 down and do not require a down payment, but you can still make one if you choose. |
| Interest Rate | Interest rate is what you pay to borrow the loan. Interest rates my differ, so make sure you check out current VA loan rates. |
| VA Funding Fee | The VA funding fee is a one-time payment to the VA to keep the program running for future generations. Veterans receiving disability benefits, military spouses and Purple Heart recipients may be exempt from paying the VA funding fee. The VA funding fee is typically 2.15% for first-time VA loan users and 3.3% for each subsequent use, which can be rolled into the mortgage. |
Can I Afford a VA Home Loan?
While this varies for each borrower, VA lenders will generally assess your debt-to-income ratio (DTI) to determine the amount of home they will finance. DTI ratio reflects the relationship between your gross monthly income and major monthly debts. Requirements can vary from lender to lender, but usually your DTI ratio cannot exceed 41 percent. Our VA affordability calculator is a great resource for determining how much you can comfortably afford.
How to Lower Your Monthly Mortgage Payment
If your monthly VA mortgage payment is higher than expected, don’t worry. There are plenty of ways to reduce your payment.
Here are some ways to save money on your monthly mortgage payment:
- Change the loan length: This can help you lower your monthly payments by lengthening how long you have to pay off the loan. However, the extended time period of the loan will result in an increased amount of interest over its lifetime.
- Lower your home price: Borrowing less money means a smaller monthly mortgage payment. So if you can find your dream house at a lower price, it will significantly reduce your monthly payments.
- VA Funding Fee Exemption: Many Veterans can waive the VA funding fee if they qualify for an exemption. Make sure to see if you qualify for an exemption ahead of time.
- Secure a lower interest rate: This may be tricky with current interest rates, but it’s important to research and find one that works for you. Be aware some advertised low rates require you to pay points, which is an upfront cost and could add to your monthly payment.
- Make a bigger down payment: Putting more money down upfront reduces how much you borrow for your loan. If you’re able to, consider paying a down payment to lower the cost.
