It is every person’s dream to own a home one day and if you are serving in the US military, then perhaps fulfilling this dream may not be a difficult task for you. Now, why is that? Well, the Federal Government offers many benefits to veterans, active-duty servicemen, reservists and National Guard Members. And one of these benefits is the Veterans Affairs Home Loan Program. So, what is this program? In general, this program had been introduced to help people who serve in the US military fulfill their dream of home ownership.
Understanding VA Home Loans
So, how do you get this loan? In order to receive VA home loan, one has to meet certain service requirements and must have sufficient entitlement. Basically, veterans have must serve 90 consecutive days during wartime and 181 consecutive days during peacetime and National Guards and Reservists must complete 6 years of service. Spouses of military members who died on active duty or because of disabilities caused on active duty are also eligible for the loan.
Once you have met these service requirements, there are certain credit and income and property and entitlement requirements which have to be met in order to determine the amount you can receive and the funding fee which you have to pay. So, how can you calculate the funding fee and amount of loan? Well, this is where a VA loan calculator comes in handy. To understand more, continue reading.
How Is A VA Loan Calculator Useful?
When it comes to applying for a VA home loan, you can take help from the VA lender’s handbook to understand the eligibility requirements. But usually most applicants get rejected for VA home loan benefits because they are unable to meet the specific credit and income requirements and entitlement requirements. And this is what a VA loan calculator is used for.
They can determine if you are a good credit-risk and can meet the requirements to repay the loan before actually applying for a VA home loan. This makes it less likely for you to get rejected, because if the calculator shows you do not meet the eligibility requirements, you can follow a few steps to improve your financial situation.
How Can This Benefit You?
If you are in the market searching for houses in your area or going through the VA-approved list of properties, you can use the VA loan calculator to determine interest rates and projected monthly payments. Since it’s a VA loan, you don’t have to worry about high rates, but it is better to be aware of the terms and conditions you are getting into.
Through the use of a VA Loan calculator, you can get a lot of additional information, including if you exceed the home loan limit, the amount of down payment you need to make, and the funding fee. And you can even use the calculator to see if you can pay off the loan early and to figure out the monthly payments and interest rates.
In addition, a VA loan calculator can also help determine how much money you will be saving monthly, yearly or all at one-time. Once you get to see the information on these calculators, you can find the right home that fits your budget. However, please note these calculators just give you a ‘snapshot’ or a rough idea of what your monthly payments would be and the amount of loan you will be eligible for. In the end, it comes down to the decision of the Department of Veterans Affairs.
What Information Do VA Loan Calculators Show?
You can find many VA loan calculators online, each with their different options and information. But in almost all VA loan calculators, you will be asked to:
- Choose the type of Loan (Purchase, Cash-Out Refinance, and Interest Rate Reduction Refinance),
- Enter Your Military Experience (Veteran or Active-Servicemen, Reserves or National Guard, or Retired), and
- Choose the state and the city in which the home is located.
After choosing and ticking the right options, you will be given a bar starting from $0 to $100,000 where you have to determine the purchase price of the home. If the purchase price exceeds the loan limit, the amount of down payment you can make, and the term of the loan (15 Years or 30 Years) will determine eligibility. Then, you will be asked to enter you Estimated ‘Credit Score’.
After filling out the information, you will be asked to enter your income and expenses in monthly figures, such as Salary/Wages, other income, property taxes (if any), hazard insurance (if any), credit card debt or other bills (if any). Additional information may include options such as if you have used a VA home loan before, or if you have VA Disability compensation.
Now that you have completed filling out the information, the VA loan calculator will show you an estimate of your Monthly Payments, Down Payment, Funding Fee, Taxes & Insurance, and Amt Finance. And this is how you can determine, if you can keep up with all the payments and successfully apply for a VA home loan. So which VA loan calculator is the best? We tend to favor ours!