VA Mortgage Rate Calculators: Helping You Understand Your Lending Costs

There are few bigger sacrifices you can make in life besides putting yourself in harm’s way in service to your country. Serving in a US military branch is an honor and a privilege, especially considering the risks you take for doing so. It’s only fair, then, that Uncle Sam gives you something back for time spent in his service. 

The US Department of Veterans Affairs offers all kinds of help to US military veterans, but one of the most helpful is certainly how vets looking to purchase a property can rely on the VA’s loan program to access highly affordable mortgage lending at attractive rates. Yet even if you qualify for the VA loan program, it can be difficult to understand how it works and what your payments might be if you rely on it. Thankfully, there are tools out there to help you understand these costs.

What Are VA Loans?

VA loans aren’t much different than traditional mortgage lending. However, they do differ in one specific manner: the Department of Veterans Affairs guarantees a portion of every VA loan. This means that lenders feel comfortable in offering veterans who qualify for the program better rates and require lower down payments (or even no down payment at all) since the US government is supporting the loan. Therefore, not everyone can have a VA loan. 

Being able to qualify for a VA loan does require you to meet specific standards of eligibility. If you’re currently serving, you need to have been doing so for at least 90 days uninterrupted. For veterans, you’ll need to either have served for 24 months, though if you were discharged for disability this requirement is waived. Other important aspects of the qualification include a residual income benchmark, which is determined by the size of your family and the region you reside. There’s no minimum credit score to qualify for a VA loan, though some lenders may choose to impose their own requirements.

What Are the Components of a VA Loan?

If you qualify for a VA loan, you’ll notice that it has several different components. Each payment you make under the loan is broken up in the following manner:

• The principal: The principal of each loan payment represents the percentage of the payment that goes directly to paying off the cost of the property you’ve purchased with the loan.
• The interest: A portion of each loan payment you make goes towards paying the interest on that loan. This interest continues to accrue constantly, and the interest is typically paid first on every loan payment.
• The VA funding fee: One of the advantages of a VA loan is that there’s no requirement to maintain mortgage insurance. Instead, the VA loan carries a funding fee instead. The amount of this fee depends on whether you made a down payment, the purpose of your loan (whether it’s for a home purchase or if you’re refinancing an existing loan), and other factors.
• Your closing costs: Some closing costs are your responsibility, but others can be negotiated into the cost of your VA loan. If this is the case, these costs will be incorporated into your loan payments.
• Your escrow payment: In some cases, VA lenders may hold your loan servicer responsible for paying property taxes and homeowner’s insurance on your behalf. In these circumstances, the cost is built into your monthly mortgage payments, with the funds necessary for paying kept in an escrow account.

Calculating VA Loan Costs

Because there are so many different factors that go into both qualifying for a VA loan and then the different components of such a loan, it’s often helpful to calculate what such a loan would cost you before you apply for one. Because of all the math involved, it’s most often useful to use a VA loan calculator service, as this can help you estimate what your monthly house payment would be when using the benefits a VA loan provides you when purchasing that property.

An example of one of the most useful VA loan calculators out there can be found at What’s My Payment.  It’s incredibly easy to use and highly intuitive, as you can simply input the price of the home you’re looking to purchase, the amount of your down payment, the state your property would be in, and a few other details. The calculator does the rest for you, showing you clearly what your estimated monthly costs would be. These costs are then broken down into what your principal and interest would be as well as how much would go toward property tax and home insurance.

The What’s My Payment VA loan calculator stands out even more from many others because it accounts for the upfront VA funding fee that becomes part of your base loan amount. It can also take into account whether you have any service-connected disabilities, which can change your eligibility requirements, and also whether this is the first VA loan you’ve taken out. Our VA loan calculator computes your initial VA loan balance by accounting for the upfront VA funding fee that is added to your base loan amount when your loan is originated, all from just a single click.

Getting the Guidance You Need for Your VA Loan

Qualifying for a VA loan doesn’t have to be a complex or troublesome process. Neither does having to figure out what you can afford if you do qualify for such a loan. That’s why we recommend the What’s My Payment VA loan calculator for any US armed forces veterans looking to learn more about what a VA loan can offer them if they’re looking to finance a property purchase.