Use the following calculator to determine the maximum monthly payment (P+I) and the maximum loan amount for which you may qualify.
DISCLAIMER: The figures above are based upon VAs debt-to-income ratio which is a ratio of total monthly debt payments (housing expense, installment debts, and so on) to gross monthly income. The VA has determined the acceptable ratio to be 41% and it is used as a guide. In circumstances where the ratio exceeds 41%, the VA automatic underwriter can consider the ratio in conjunction with all other credit factors. Calculations by this tool are believed to be accurate, yet are not guaranteed. Further review is necessary to obtain an exact qualification.
If you’re a veteran or active military service member, a VA home loan can help you buy a house with little to no down payment. VA loans offer great benefits but how much can you actually qualify to borrow?
Figuring out your VA loan eligibility takes some calculations. The loan amount depends on factors like your income, debts, credit, and more.
Luckily, there are VA loan calculators available online to estimate how much you may qualify for. In this comprehensive guide, I’ll cover:
- What determines your max VA loan amount
- How to use VA loan affordability calculators
- Tips to optimize your loan eligibility
- Ways to increase your qualified loan amount
- Common mistakes to avoid with the calculators
- And much more
Follow along to learn how to calculate your potential VA mortgage amount. Let’s dive in!
What Determines Your Maximum VA Loan Amount?
When you apply for a VA loan, lenders assess these key factors to decide how much to approve you for:
Income – Your gross annual income from employment, veterans benefits, retirement pay, and other sources. Higher verified income allows higher loan amounts.
Debts – Your monthly debt payments like credit cards, student loans, auto loans, etc Lower debts mean more room for a mortgage payment.
Credit scores – Most lenders require minimum credit scores of 620 or 640 for VA loans. But higher scores unlock better rates and terms.
Down payment – VA loans allow 0% down. But a down payment gives you equity and can increase your buying power.
VA entitlement – First-time buyers get up to $144,000 of VA entitlement. Your entitled guaranty amount affects the max loan size.
Residual income – The income left over after paying debts and mortgage. There are minimums set by the VA.
Debt-to-income ratio (DTI) – Your total monthly debt payments divided by gross monthly income. VA loans can exceed 41% DTI with justification.
Loan-to-value (LTV) ratio – The loan amount versus home value. Higher LTVs allow smaller loan amounts.
As you can see, it takes crunching some numbers to determine VA loan eligibility. That’s where their handy mortgage calculators come in very useful.
How To Use VA Loan Affordability Calculators
Online VA loan calculators help estimate how much mortgage you may qualify for based on your financial details. They take into account factors like:
- Income
- Debts
- Down payment
- Credit scores
- Location
Here are some top sources for VA loan affordability calculators:
To use them, you’ll input details like:
- Your target home price
- Down payment amount
- Estimated credit score
- Current income
- Existing monthly debt payments
- Location for taxes and insurance
The calculator crunches the numbers and estimates a loan amount you may qualify for. It also shows potential monthly payments.
This gives you a ballpark idea of your VA loan buying power before formally applying. But note it’s not a guarantee – actual approval depends on full underwriting.
Tips To Optimize Your VA Loan Eligibility
Here are some tips to maximize the mortgage amount the calculators say you can qualify for:
Improve your credit – Shoot for minimum scores of 680 or higher. Pay down balances, dispute errors, and don’t open new accounts before applying.
Pay down debts – Reduce credit card and installment loan balances to lower your DTI. Pay off collections and high-interest debts.
Save for a down payment – Even 3-5% down can boost your purchasing power significantly.
Reduce other monthly payments – Cut unnecessary expenses like gym memberships and streaming services to free up DTI room.
Buy with a partner – Combining incomes with a spouse or partner expands your total buying power.
Get loan officer preapproval – They may approve you for more than the calculators by factoring in your full financial profile.
Consider loan term changes – A 30-year term offers lower payments than a 15-year term, which can help eligibility.
Ask about residual income rules – Make sure you meet the VA’s residual income guidelines for your area and family size.
Verify VA entitlement – Make sure you know your available guaranty amount before assuming the max loan size.
Check county loan limits – High-cost areas may have VA loan limits above the standard $144,000 entitlement.
How To Increase Your Qualified VA Loan Amount
Here are some other ways to potentially boost how much home you can buy with a VA loan:
Use non-taxable income – Some sources like disability pay don’t count on taxes but can help qualify you.
Rent out part of the home – Rental income can act as “effective income” after move-in to help pay the mortgage.
Pay down the loan – Each $1,000 extra per month pays the loan down faster, which can allow refinancing to a larger amount later.
Wait to buy – Giving yourself more time to save and pay down debts before buying can grow your eligibility.
Improve entitlement – Restoring your full VA entitlement of $36,000 after already using benefits expands buying power.
Buy a less expensive home – The lower the purchase price, the lower your required down payment and monthly payment will be.
Bring cash to close – Lenders may approve a larger loan if you have reserves to cover the down payment and closing costs.
Ask about exceptions – Some lenders will exceed DTI or LTV limits with sufficient explanation and compensating factors.
Common Mistakes To Avoid With VA Loan Calculators
These tools estimate your affordability, but aren’t necessarily a promise of approval for that mortgage amount. Here are some key mistakes to avoid:
Inaccurate credit score – Double check your scores match your actual FICO scores that lenders will review.
Forgetting essential monthly costs – Be thorough on spending for groceries, gas, childcare and other obligations.
Not accounting for new home costs – Don’t underestimate maintenance, utilities, furnishings and unexpected repairs.
Using retail spending habits – Cut down discretionary retail therapy budgets to reflect spending in a new mortgage.
Assuming best-case scenario interest – Get up-to-date average rates to calculate conservatively.
Not checking VA loan limits – Your entitlement guaranty may cap your allowable loan amount below what a calculator estimates.
Neglecting closing costs – Ensure you budget 3-5% of the purchase price for origination, appraisal and other closing fees.
Let The Calculators Estimate Your Buying Power
As a VA borrower, it’s important to use all the educational tools available to get a sense of affordability before diving into home shopping. Lean on your lender and real estate agent for preapproval assistance as well.
How the VA Affordability Calculator Works
One of the first steps in the homebuying process is determining your price range. Our VA loan affordability calculator estimates how much you can afford using a VA home loan based on your financial situation.
The calculator uses information from you about your income, monthly expenses and loan term to calculate an estimate of what you may be able to afford. Simply input your values into the corresponding areas and it will automatically calculate a home price budget for you.
The VA loan affordability calculator is set to the top end of the VAs recommended DTI ratio of 41 percent. Learn more about how we calculate affordability below.
Factors Affecting VA Loan Affordability
Effective income on a VA loan must be stable and reliable. This usually includes your salary, spouses salary, pension or retirement, part-time income and bonuses (if they are reliable and anticipated to continue). Your lender typically requires two years of W2s and current pay stubs to verify income. If you are a self-employed Veteran, you may have some additional documentation to provide.
Your monthly expenses include all of the things you pay on a monthly basis, such as your car payment, student loan payment or credit card payment. This can impact how much money you have to commit to your monthly mortgage payments, ultimately affecting how much house you can afford. It is advised to have a debt-to-income ratio of 41 percent or lower.
VA loans do not have a minimum credit score requirement. However, with a lower credit score, you’ll usually pay a higher interest rate and more fees that could increase your monthly mortgage payment.
Lenders look at your credit score to evaluate your financial responsibility. They want to ensure you will make your mortgage payments on time. Typically, they want to see a FICO credit score of at least 620. If your credit score is lower, lenders might consider you a riskier borrower and increase the price of your loan.
VA loans have a one-time fee known as a VA funding fee. This payment goes to the federal government and helps keep the VA program running for future generations. The funding fee is 2.15% of the loan for first-time VA loan users and 3.3% for each subsequent use.
Veterans receiving disability benefits, military spouses and Purple Heart recipients are exempt from paying the VA funding fee.
VA Home Loan Mortgage Calculator
FAQ
How much can you get approved for with VA loan?
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State:
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Loan Limits Starting At:
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Link:
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California
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$510,400
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See all California loan limits >>
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Colorado
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$510,400
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See all Colorado loan limits >>
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Connecticut
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$510,400
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See all Connecticut loan limits >>
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Delaware
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$510,400
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See all Delaware loan limits >>
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