Plan Your VA Home Purchase with Our Affordability Calculator
Our calculator is user-friendly and helps you estimate the maximum home price you can afford. Follow these steps to get started:
- Enter your gross monthly income (e.g., base pay, housing allowance).
- Input your monthly debts (e.g., loans, credit cards).
- Specify your adjusted Debt-to-Income (DTI) ratio (default is 45%).
- Adjust the interest rate based on current market rates or your pre-approval.
- Select your loan term (15 or 30 years).
- Check if this is your first VA loan or if you’re a disabled veteran to determine VA Funding Fee eligibility.
- Verify or adjust the annual property tax rate based on your location.
- Review the estimated homeowners insurance cost ($2,000 annually, fixed for this calculator).
Factors Affecting Your VA Loan Affordability
Several elements influence the maximum home price you can afford:
Higher gross monthly income increases affordability, while monthly debts reduce the amount available for housing expenses.
The DTI ratio determines the maximum housing expense you can afford. A higher DTI allows for a larger home price, but lenders typically prefer a DTI below 41% for approval.
This one-time fee (2.15%–3.3% for non-exempt borrowers) is financed into the loan, increasing the loan amount and affecting affordability. Disabled veterans and certain surviving spouses are exempt.
Property taxes, set by local governments, and homeowners insurance impact your monthly payment, reducing the affordable home price if higher.
Lower interest rates or longer loan terms increase affordability by reducing monthly principal and interest payments, allowing for a higher home price.
Increasing Your Affordable Home Price
To afford a more expensive home, consider these strategies:
- Increase Income: Include side hustles or VA benefits to boost monthly income.
- Reduce Debts: Pay off credit card or loan payments to lower monthly obligations.
- Higher DTI: Choose a higher DTI ratio to allow for larger housing expenses.
- Lower Interest Rate: Shop for a lower rate to reduce principal and interest payments.
- Longer Loan Term: Opt for a 30-year term to lower monthly payments.
- Lower Tax/Insurance Areas: Select properties with lower property taxes or insurance costs.
Frequently Asked Questions About VA Mortgage Affordability Calculator
A VA Mortgage Affordability Calculator estimates the maximum home price veterans, service members, and surviving spouses can afford based on income, debts, DTI ratio, interest rate, loan term, VA Funding Fee, taxes, and insurance.
The VA Funding Fee is a one-time fee (2.15%–3.3% of the loan) that supports the VA loan program. It’s waived for veterans with service-connected disabilities or surviving spouses receiving DIC.
The Debt-to-Income (DTI) ratio determines the maximum housing expense you can afford. A higher DTI allows for a larger home price, but lenders typically prefer a DTI below 41% for approval.
Key factors include gross monthly income, monthly debts, adjusted DTI ratio, interest rate, loan term, VA Funding Fee, property taxes, and homeowners insurance.
Increase income, reduce debts, choose a higher DTI ratio, secure a lower interest rate, opt for a longer loan term, or select a property with lower taxes or insurance costs.
