How Much of a VA Loan Can I Afford?

How Much of a VA Loan Can I Afford? Find Out Now!

If you’re a military veteran looking to buy a home, you may be wondering how much of a VA loan you can afford. Follow these tips to find out!

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The Veterans Administration offers a home loan guaranty program to help veterans purchase or build a primary residence. The program is available to eligible veterans, service members and surviving spouses. The VA does not lend money for the home loan; instead, it provides a guarantee to the lender against loss if the borrower defaults on the loan. The guaranty means that the lender can offer more favorable terms, including no down payment and no monthly mortgage insurance premiums.

How Much House Can I Afford?

You’ve saved up for a down payment, you know how much you want to spend on a house, and you’re ready to buy. The next step is to get pre-approved for a mortgage. But how much of a loan can you afford? This all depends on your debt-to-income (DTI) ratio.

The 28/36 Rule

The 28/36 Rule is a set of guidelines used by lenders to determine how much house you can afford. The rule is based on the idea that you should spend no more than 28% of your monthly income on housing costs (including mortgage payments, property taxes, and insurance) and no more than 36% on debt payments (including all other monthly loan payments).

The 28/36 Rule is a good starting point for understanding how much house you can afford, but it’s not the only factor that lenders will consider when making a loan decision. Other factors may include your credit score, employment history, and savings.

The Debt-to-Income Ratio

The first factor that lenders look at when considering a VA loan is your debt-to-income ratio, or DTI. This is a simple calculation that compares your monthly debts to your monthly income. The lower your DTI, the more likely it is that you’ll be able to afford your mortgage payments – and the more likely you are to get approved for a loan in the first place.

For most borrowers, a DTI of 43% or less is ideal. But va home buyers actually have some wiggle room here – up to 50% in some cases. That’s because the VA assumes that veterans can handle slightly higher monthly payments than non-veterans.

To calculate your DTI, simply add up all of your monthly debts, including your projected mortgage payment, and divide by your gross monthly income. If your DTI is 43% or less, you should be in good shape when it comes to qualifying for a VA loan.

How Much of a Down Payment Do I Need?

Since you’re not buying with cash, you’ll need to get a loan in order to purchase your home. The good news is, you can use a VA loan which is backed by the US Department of Veterans Affairs. But how much can you afford?

The Minimum Down Payment

The minimum down payment for a VA loan is 3.5% of the purchase price of the home. However, veterans are eligible for a VA funding fee which can be added to the loan amount, and therefore does not have to be paid out-of-pocket. The funding fee is a one-time charge that ranges from 1.25% – 3.3% of the loan amount, depending on the type of veteran, whether this is the veteran’s first time using a VA loan, and whether the borrower elects to pay it upfront or include it in the loan.

The Average Down Payment

How much of a down payment do you need for a house? The average down payment by first-time homebuyers is about 6% of the purchase price, according to the National Association of Realtors®.

For a home costing $200,000, that would be $12,000. However, first-time buyers often have a hard time gathering that much cash. In fact, 44% of respondents in a recent survey said they would need to sell other assets or take out a loan in order to come up with a down payment.

Many people believe they need a 20% down payment to buy a house, but it’s possible to purchase even a brand-new house with as little as 3% down – or even nothing down at all.
The median down payment for all buyers last year was just 11%, according to the National Association of Realtors®.
Among first-time buyers, the median down payment was 6%.
For repeat buyers it was 14%.
Of course, if you put less than 20% down, you’ll have to pay for private mortgage insurance (PMI), which protects your lender if you default on your loan. The cost of PMI depends on the size of your down payment and your credit score.

How Much Will My Mortgage Payment Be?

This is one of the most common questions we get from home buyers. The quick answer is that your mortgage payment will be based on several factors, including your income, credit score, employment history, and the type of loan you get.

Principal and Interest

Your monthly mortgage payment is made up of several components, the largest of which is usually your principal and interest. This is the amount that goes toward paying off the balance of your loan, and the interest is the fee charged for borrowing the money.

The size of your payment also depends on the term of your loan, or how long you have to pay it back. A shorter term means higher monthly payments, but you’ll pay less in interest over the life of the loan. A longer term gives you lower monthly payments but you’ll pay more in interest over time.

You can use our mortgage calculator to estimate your monthly payments, including principal and interest. Just enter some information about your home loan and we’ll do the rest!

Property Taxes

Your property taxes will be based on the tax rate in your area and the assessed value of your home. The assessed value is usually lower than the purchase price, and in some cases, it may be significantly lower. For example, if you bought your home for $250,000 and the assessed value is $200,000, your annual property taxes would be $1,500 (assuming a tax rate of 1.5%).

Homeowners Insurance

Homeowners insurance is one of the most important forms of protection for you and your family. A standard policy protects your home and personal property from damage or theft, and may also cover additional living expenses if your home is uninhabitable due to a covered event.

There are many different types of coverage available, so it’s important to work with an insurance agent to determine the best policy for your needs. In general, most homeowners insurance policies will cover the following:

-Dwelling: This covers the physical structure of your home, including the roof, walls, and foundation.
-Other structures: This covers detached structures on your property, such as a garage or shed.
-Personal property: This covers your personal belongings inside your home, such as furniture, clothing, and appliances.
-Liability: This protects you from lawsuits if someone is injured on your property.
-Medical payments: This covers medical expenses if someone is injured on your property.

Private Mortgage Insurance

If you’re a veteran, you may be able to get a VA loan with no down payment and no private mortgage insurance (PMI). That can save you thousands of dollars a year and make it easier to afford your home.

VA loans are available with fixed rates or as adjustable-rate mortgages (ARMs), with terms of up to 36 years. Most VA loans are made with no down payment. But if your down payment is less than 20%, you’ll usually have to pay for private mortgage insurance (PMI). You can avoid PMI by making a down payment of at least 20% when you buy your home.


While it’s important to have a budget and know what you can afford, don’t be afraid to ask for help when it comes to your VA loan. Working with a lender that specializes in VA loans can help you get the most for your money and ensure that you are getting the best possible deal on your loan.

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