My Perfect Mortgage
How to Use a VA Mortgage Affordability Calculator
5 minute read
May 23, 2024

In general, buying a home requires a lot of cash, which can make homeownership difficult for many. 

However, for those qualified to use the VA loans because of their military service, owning a home with little or no cash is possible as a down payment through the VA program. 

VA loans were created in 1944 to thank the returnees from World War II and help them acquire new houses. 

Sponsored by the US Department of Veteran Affairs, these loans can be used to build, refinance, buy, or renovate an old house or condo. 

The VA loan consists of relatively easy rules to fulfill before qualifying. 

  • available in AL, CA, CO, CT, FL, GA, IL, MA, MD, MI, MN, NC, NJ, NY, OH, PA, SC, TX, VA, WA
  • Simple application
  • Quick decisions
  • Common sense underwriting
  • Fast closing period
  • Lend in all 50 states
  • Veteran lending specialist available to you, no matter where you are
  • In-house processing and underwriting
  • Express Loan Approval program, which allows you to be done with the whole process (minus the contract and appraisal), so you can focus on finding your home.
  • Rate Protect (Lock & Shop) lock in your rate before you even find a home!

What are the requirements for a VA loan?

Before determining if you can afford a VA loan, consider the requirements to qualify. 

1. You must be an eligible veteran or service member 

Current service members in the Army, Navy, Air Force, Marine Corps, National Guard, or Reserve Corps must have served for at least 90 consecutive days. The minimum time served to qualify for veterans will depend on when they served. 

Confirm your minimum required service time on the VA website

U.S. Army veterans honorably discharged and met the minimum service requirements of 90 consecutive days during an active wartime period or at least 181 consecutive days of active service during peacetime can also qualify. 

Surviving spouses of service members can qualify for a VA loan if their partner passes away during active service or becomes incapacitated due to a service-related disability. 

2. You must meet the minimum financial requirements

Although the VA does not require a specific credit score minimum, the lender may have their set requirements to qualify. 

Lender requirements often include:

  • Credit score is usually 620 or higher
  • Debt-to-income ratio 41% or less 

Since the VA will back a portion of the loan in the case of default, lenders can afford to be more lenient in their approvals. 

Private VA-approved lenders may have additional requirements. Confirm everything needed with the lender before you begin the process. 

3. You must meet the minimum property and occupancy requirements

VA loans are meant to be used to purchase or renovate a house that will serve as your primary address and place of residence. 

4. You must have the proper documentation

How to use a VA loan affordability calculator

Need help determining how much house you can comfortably afford with a VA loan? A VA loan affordability calculator can help! Here’s a step-by-step guide:

  • Income: Enter your annual income before taxes. If you’re self-employed, calculate the average of your income over the past two years. This figure gives the calculator an idea of your overall earning capacity.
  • Debt: Input the monthly amount you pay for debts such as car payments, credit card minimums, or student loans. This helps the calculator assess your existing financial obligations.
  • Down payment: Enter the down payment amount you plan to make. This is the initial payment you will contribute towards the home purchase. If you intend to put down zero, leave this field blank or enter "0".
  • Credit score: Specify your credit score based on the provided ranges, which are excellent (720+), good (660-719), fair (620-659), or poor (below 620). Your credit score plays a role in determining the interest rate for which you may qualify.
  • Interest rate: Enter the estimated interest rate for the VA loan. Consult with a VA-approved lender for a more accurate estimate based on your circumstances.
  • Loan term: Select the desired loan term from the options—30 or 15 years. The loan term affects the duration of your mortgage and can impact your monthly payments.
  • Military branch: Include any additional options related to military service. Choose the appropriate military type based on your service status: regular military, reserves, national guard, or surviving spouse. 
  • Property tax rate: Property taxes are generally estimated to be around 1.2% of the home's value, but they can vary depending on your location. Consult with a loan officer or research local property tax rates for an accurate estimate.
  • Annual homeowners' insurance rate: Typically, homeowners insurance is estimated to be around 0.35% of the home's value. However, this rate can vary based on the insurance provider and other factors. Consult with insurance providers or research average rates in your area to get a more precise figure.
  • Review: Review the results provided by the calculator. It will estimate the loan amount you may qualify for and provide details on the estimated monthly payment. This information gives you an idea of the affordability range for your home purchase.
  • Adjust as needed: Consider adjusting the inputs to explore different loan scenarios. You can modify variables such as the down payment amount, credit score, loan term, interest rate, property tax rate, or homeowners insurance rate. By adjusting these variables, you can assess how changes in each factor affect your affordability and monthly payment.
  • Make a plan: Once you estimate the cost of your VA mortgage, you can make an action plan to improve your finances or go straight to your preferred lender to start the process. 

Remember that while the VA loan affordability calculator is useful, it’s only an estimate. 

It's always recommended to consult with a mortgage professional or VA-approved lender for a more accurate assessment and to explore your loan options further. 

Our advise is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.