Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience
Use our VA Mortgage Qualification Calculator to determine what size VA mortgage you qualify for, how much home you can afford to buy and the upfront VA funding fee you are required to pay based on your class of military service, monthly gross income and debt expenses. We encourage you to run multiple scenarios with different interest rates and loan lengths to understand the VA mortgage amount you can afford.
How Our VA Mortgage Qualification Calculator Works
The VA Mortgage Program enables qualified military personnel and veterans to buy a home with no down payment. While buying a home with no money down is a significant opportunity, there are additional costs such as the VA funding fee that you should also consider.
The VA Program uses a residual income analysis to determine your ability to qualify for a mortgage. In short, the VA wants to make sure that you have sufficient income leftover after accounting for your monthly debt expenses including your mortgage payment, property tax, homeowners insurance as well as other debt expenses including credit cards, personal, auto and student loans.
Our VA Mortgage Qualification Calculator uses the residual income analysis and the following inputs to show you the estimated mortgage amount you qualify for, the estimated price of the home you can buy and the funding fee you may be required to pay:
Class of Military Service. Your class of military service is used to determine program eligibility and to calculate the upfront VA funding fee.
Number of Times You Have Used the VA Program. The funding fee is typically lowest for regular military borrowers who are using their VA entitlement for the first time.
Monthly Gross Income. This is your income before any deductions for federal, state and local taxes, social security and medicare.
Monthly Debt Payments. This is your monthly expense for loans such as credit cards, personal, auto and student loans. It is important to highlight that this figure includes your total monthly debt payments and not your current total debt balance. For example, if you make a $350 monthly payment on a $6,500 car loan, you include $350 in your debt payment and not $6,500.
Interest Rate. This is the interest rate you pay on your VA mortgage. The positive for borrowers is that VA mortgage rates are usually lower which allows you to qualify for a larger loan.
Mortgage Term. This is how long your loan is in years. The longer your mortgage terms, the higher the loan amount you can afford.
Input different values for mortgage rate and length into our calculator to determine how the VA mortgage amount you qualify for changes.
Down Payment. This is the how much you put down to buy the property as a percentage of the purchase price. Although the VA program requires zero down payment, the funding fee is lower if you decide to put down at least 5%.
Property Information. The VA Program applies loan limits that are based on property location. Select the state and county for your property to determine the VA loan limit.
Our calculator enables you to understand the following about VA mortgage qualification:
VA Mortgage You Can Afford. This is the VA mortgage you qualify for based on how much money you make, your debt expenses and residual income. The more money you earn and less debt you have, the larger the VA home loan you can afford.
VA Loan Limit. Our calculator determines the VA loan limit for the county in which the property is located. The loan limit is important because if your mortgage amount is greater than the limit then you are required to make a down payment to be eligible for the VA program.
How Much Home You Can Afford With a VA Mortgage. What price home you can purchase with a VA loan depends on your mortgage amount and down payment, if you decide to make one. The higher your loan amount and down payment, the more home you can afford to buy.
VA Mortgage Payment. This is the monthly payment for your VA home loan based on your mortgage amount, rate and length.
Estimated Total Monthly Housing Expense Plus Debt. This includes all of your loan payments plus your mortgage, hazard insurance and property tax. Review this figure to make sure you can afford your mortgage payment and other housing-related costs in addition to your current loan commitments.
VA Funding Fee. Depending on your disability rating, you may be required to pay a VA funding fee when your loan closes. The funding fee depends on your down payment, type of military service and if this is your first time using the VA Program. You can add the funding fee to your mortgage amount or pay for it out-of-pocket. The good news is that the VA Program does not require borrowers to pay a monthly mortgage insurance fee.
What Borrowers Should Know About a VA Mortgage
1
VA Home Loan Program Basics
The VA mortgage program enables eligible military personnel and veterans to buy a home with no down payment. Saving money to pay for a down payment is one of the biggest obstacles to buying a home so enabling borrowers to qualify for a home loan with no money down is a significant benefit. Although borrowers are required to pay an extra upfront VA funding fee, the VA home loan program makes home ownership more affordable and accessible to active and retired military members. Use our VA Mortgage Qualification Calculator to determine the VA funding fee based on your loan amount, type of military service and the number of times you have used the program.
2
VA Home Loan Program Qualification Guidelines
VA borrower mortgage qualification guidelines are slightly less flexible than other no or low down payment mortgage programs such as the FHA home loan program. The VA home loan program requires a minimum credit score of 620 as compared to 580 for the FHA program. Additionally, the VA home loan program uses a borrower debt-to-income ratio of approximately 41% to determine what size mortgage you qualify for as compared to a debt-to-income ratio of 43% or higher for the FHA mortgage program. Using a lower debt-to-income ratio means that borrowers qualify for a smaller mortgage amount. Our VA Mortgage Qualification Calculator applies this conservative debt-to-income ratio to calculate what size VA loan you can afford. Additionally, the VA home loan program applies a residual income requirement to ensure that borrowers have sufficient funds after paying their mortgage and total monthly housing expense.
3
VA Mortgage Rates are Lower
The mortgage rate for VA home loans is lower than the interest rate for many other no or low down payment home loan programs. VA home loans have lower interest rates because the mortgages are insured by the U.S. government and military personnel tend to be more financially responsible and credit-worthy. Paying a lower interest rate reduces your mortgage payment and total monthly housing expense and saves you thousands of dollars in total interest expense over the term of your mortgage. Use our VA Mortgage Qualification Calculator to understand how lower mortgage rates impact your monthly payment.
4
VA Home Loan Program Eligibility
The VA home loan program is available to all eligible military personnel. In general, you are eligible for the VA home loan program if you served on active duty for more than 90 consecutive days during wartime or more than 181 days during peacetime. National guard members and reservists are required to have served a minimum of six years. Additionally, unlike some other low or no down payment mortgage programs, the VA home loan program does not apply borrower income limits or restrict where the property being mortgaged is located. Although the program uses VA loan limits that cap your mortgage amount, not using income limits or property location restrictions makes the VA home loan program available to more eligible military members and veterans.
5
Your Mortgage Amount Can Be More than the VA Loan Limit
Like many other low down payment mortgage programs, the VA program applies loan limits. Unlike other programs, however, your mortgage amount can actually exceed the VA loan limit for your county. This may seem confusing and you may ask yourself how this is possible. According the VA program guidelines, your loan amount can be more than the loan limit as long as you make a down payment of at least 25% of the difference between your mortgage and the limit. For example, if the loan limit is $400,000 and you want a $500,000 loan, you would be required to make a $25,000 down payment ($500,000 (mortgage) - $400,000 (loan limit) = $100,000 (difference) x 25% = $25,000 (required down payment). Most people who use the VA Program put no money down so they are subject to the loan limits but it is helpful to understand that you may be able to qualify for a higher mortgage amount.
6
You Can Use the VA Program More Than Once
The VA Program can be used multiple times although you are typically required to pay off any current VA loans you have before you are eligible for a new one. In some cases, such as if you are transferred, you may not be required to pay off your current loan but this is relatively uncommon. Additionally, the VA funding fee is higher if you are not using the program for the first time but you are still eligible to buy a home with no down payment and take advantage of lower VA interest rates.
Data provided by Informa Research Services. Payments do not include amounts for taxes and insurance premiums. Click for more information on rates and product details.
While we pride ourselves on the quality and breadth of the FREEandCLEAR mortgage calculators please note that they should be used for informational purposes only. Our calculators rely on assumptions by us and inputs and assumptions provided by you, which may be inaccurate. The outputs from our calculators are estimates only and should not be used as the sole basis for making any financial decisions. Always consult multiple financial professionals when determining the mortgage size and program that is appropriate for you.
Review our comprehensive overview of the VA home loan program including eligibility guidelines, borrower qualification requirements and other key program information such as the VA funding fee and VA loan limits
Use our VA mortgage rate table to review updated VA rates and closing costs for lenders in your area. Shopping multiple lenders is the best way to save money on your VA home loan
Review and compare multiple government-backed and conventional low or no down payment mortgage programs to understand borrower benefits, program eligibility requirements and qualification guidelines
Sources
VA Mortgage Qualification: https://benefits.va.gov/HOMELOANS/purchaseco_eligibility.asp
VA Funding Fee: https://benefits.va.gov/homeloans/documents/docs/funding_fee_table.pdf
VA Mortgage Program: https://www.benefits.va.gov/homeloans/resources_veteran.asp
About the calculator developer
Harry Jensen, Mortgage Expert
Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR. More about Harry