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How to Use a Mortgage Calculator When Looking for a VA Loan? Feature Image
Posted on April 7, 2021 6 minute read

How to Use a Mortgage Calculator When Looking for a VA Loan?


What's in this article?

Do You Qualify for a VA Loan? 
Why Get a VA Loan? 
How to Use a VA Mortgage Calculator 

If you’re a veteran or current service member, you may be interested in using a VA loan to purchase or refinance your home. A VA mortgage calculator can help you estimate what you can afford, and a dedicated loan officer can help you begin the VA loan approval process. 

The VA Loan Guaranty program originated in 1944 as a way of thanking the returning veterans of World War II and helping them acquire affordable homes. VA loans are backed by the U.S. Department of Veterans Affairs and guarantee a portion of the loan you get from a lender. That loan can then be used to buy, build, or renovate a house or condo. You can also use a VA loan to refinance a current home mortgage and lower your monthly payment. 

Estimate how much you can afford to borrow by using a VA loan calculator. A VA loan calculator will help you see possible monthly loan payments with taxes and insurance. We’re here to guide you through VA loan qualifications, the benefits, and how to use a VA mortgage calculator. 

Do You Qualify for a VA Loan? 

VA loans can be more flexible in their qualifications since they’re backed by the government. It makes VA loans less risky for lenders and makes it easier for a veteran or active service member to purchase an affordable home. 

To be approved for a VA loan, you will need to first complete a Certificate of Eligibility (CoE). You must be a military veteran, active service member, or reservist of the Army, Navy, Marine Corps, Air Force, or Coast Guard. You also must have served at least 90 days or more during wartime or 181 continuous days in peacetime. 

If you enlisted after September 7, 1980, or were an officer who began service after October 16, 1981, there is a two-year requirement of service to qualify for the VA loan. Additionally, if you were discharged from service because of conditions other than dishonorable, you can still qualify for a VA loan. 

A surviving spouse of a deceased veteran also qualifies for a VA-insured loan. For a surviving spouse to qualify, they must not be remarried. If the surviving spouse of a veteran does remarry, they will only qualify again once that marriage has ended. However, you can always contact your Loan Originator for more options or if you are unsure.

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Why Get a VA Loan? 

There are many benefits with a VA loan: 

  • No required down payment 
  • No private mortgage insurance required 
  • Lower Fico Requirements
  • Higher debt-to-income ratio is allowed 
  • No prepayment penalty 

Though there is no down-payment required, a VA loan will require a funding fee to be paid upfront. The funding fee for a loan ranges from 1.4% to 3.6% of the loan balance, depending on your down payment and whether it’s your first VA loan. If you are seeking a VA Interest Rate Reduction Refinance Loan, this may have a lower Funding Fee. The funding fee is a lower cost than conventional or FHA loans, which require down payments of at least 3.5% of the home’s value, in addition to closing costs that can range from 2-6%.

The VA funding fee may be waived in certain cases such as if you have a disability-related to your service, you receive VA disability, or if you are a qualifying surviving spouse. 

Using a VA loan to refinance can make your home more affordable or help you borrow money to reach other financial goals. An affordable mortgage payment will allow you to pay off your mortgage sooner with the option for no out-of-pocket closing costs.

You can also borrow up to 90% of your home’s value to pay off other debts or make other investments. Conventional and FHA loans on the other hand only allow you to borrow up to 80% of your home’s value. 

How to Use a VA Mortgage Calculator 

A VA loan calculator can help you feel more confident in your loan decision. With this calculator, you can estimate what your monthly mortgage payments may be so that you can understand whether you can afford the home you want. A VA mortgage calculator can be used whether you are purchasing a home or refinancing but the correct purpose must be selected to yield the calculation that you want. 

For a home purchase, you can calculate loan details such as loan amount, loan amount with funding fee, estimated property taxes and insurance, and the income required if you’re buying a house without a down-payment. A VA loan calculator will assume that the borrower is calculating for a primary residence, which is the only type of residence a VA loan will allow. 

If you are refinancing a mortgage, the calculator can show approximately what your new monthly payment will be and the amount required for the funding fee, based on the type of VA refinance loan that you are calculating. 

For both purposes, the information that you will need for an accurate calculation include: 

  • The sales price of the home or your refinance amount 
  • Your loan’s interest rate
  • The loan type 
  • The loan purpose – home purchase or refinance 
  • The loan term – 15, 20, 25, or 30 years 
  • Estimated closing date 
  • Annual property tax amount 
  • Down-payment amount, if applicable 

You will also need to select which branch of the military you served or are currently serving in, as well as if you have previously used a VA loan. Additional fees for things such as the survey, broker, inspections, notary, and others should be taken into account as well. 

Remember that fees and expenses could change depending on your actual closing date, your military status, and if you finance your funding fee. The calculator will provide an estimate based on the information that you enter. From there, you can speak with a professional loan officer, and they can help you determine the terms of your loan.

Start the approval process by contacting a dedicated loan officer to discuss how to purchase or refinance your home with a VA loan. Request a quote or call us to get the most from your VA benefits for your mortgage. 

By refinancing your existing loan, your total finance charges may be higher over the life of the loan.

A down payment is required if the borrower does not have full VA entitlement or when the loan amount exceeds the VA county limits. VA loans are subject to individual VA Entitlement amounts and eligibility, qualifying factors such as income and credit guidelines, and property limits. by Homefinity is not affiliated with any government agencies. These materials are not from VA, HUD, or FHA, and were not approved by VA, HUD or FHA, or any other government agency.

(Select the option that best describe the majority of your military service.)

Photo by Terry Magallanes from Pexels