The Veteran’s Administration (VA) is a lifeline for America’s service members. For many veterans, home loans are simply unaffordable due to high interest rates and down payment requirements. VA loans alleviate these issues and deliver more favorable terms and conditions to veterans.
Did you know that the VA issues more than 1.2 million home loans in a given year? In 2020, the VA guaranteed roughly $363 billion in mortgages.
Now that you understand that VA loans are the way to go, let’s start running some numbers. Read on to learn how to use a VA loan calculator. Explore how a military loan calculator will help you plan for the future.
Who Is Eligible for a VA Loan?
Before you start calculating monthly mortgage payments, it is important to determine your eligibility. VA loans are not available to everyone in the United States. They are reserved for active-duty military, veterans, National Guard, and reserve members.
For active-duty, you become eligible after 90 days of consecutive service. For all others, the active duty requirement depends on when you served.
The best course of action is to request a Certificate of Eligibility (CoE). Next, provide this CoE to your VA loan provider to get the process started.
In addition to your military service, there are financial requirements imposed by each VA lender. You will have to meet certain income and credit score thresholds for loan approval.
How to Use a Veteran Loan Calculator?
If you are eligible for a VA loan, it is time to start crunching some numbers. The home’s price is typically the first input to consider. Your monthly mortgage payment is going to flow down depending on other variables.
Loan term is another significant variable. The 30-year mortgage is one of the most popular for young borrowers. However, 10 and 15-year mortgages are also available.
How much money that you decide to put down has a direct impact on the loan principal. Now, your VA loan provider may not require a down payment.
However, many prudent borrowers put down money to reduce loan principal. This is an effective way to lower your monthly mortgage payment and build equity in the home.
The interest rate is another significant variable when calculating your mortgage payment. Currently, interest rates are on the rise. The United States Federal Reserve is raising rates and the effect of that is trickling down to home financing.
You can enter in an average mortgage rate to complete the calculation. Another option is to shop around for the best interest rates to input into the calculator.
Your Guide to a VA Loan Calculator
You are now ready to start planning for your future. Figuring out how much your dream home is going to cost each month is a crucial first step.
There is no question that VA loans are favorable for borrowers. They have lower interest rates and down payment requirements. VA loan affordability is the primary reason that our service members seek out these mortgages.
If you enjoyed this article about using a VA loan calculator, check out our benefits section for more great content.