What Is a VA Home Loan?
A VA home loan is a mortgage program backed by the U.S. Department of Veterans Affairs. It is designed to help eligible active-duty service members, veterans, and certain surviving spouses purchase or refinance a home with favorable terms.
VA loans offer major benefits that typical mortgages do not, including:
- No down payment required
- No private mortgage insurance (PMI)
- Lower interest rates than conventional loans
- Flexible credit and income requirements
- Limits on closing costs
Because VA loans are government-backed, lenders can offer more flexible underwriting guidelines, making homeownership more accessible to military families.
How to Use the VA Loan Calculator
This calculator helps you estimate your monthly mortgage payment, including principal and interest, VA funding fees, property taxes, homeowners insurance, HOA dues, and any additional monthly charges.
To get the most accurate results, follow these steps:
1. Select your VA loan type
Choose whether your loan is for a purchase, construction, or refinance. Your selection determines how the VA funding fee is applied.
2. Enter the home price or appraised value
The appraised value is used for refinances, while the purchase price is used for new home purchases.
3. Input your base loan amount
This is the amount you plan to finance before adding the VA funding fee (if not paid upfront).
4. Add your loan details
Enter:
- Loan term (15-year or 30-year)
- Interest rate (APR)
- Annual property taxes
- Homeowners insurance
- HOA dues (optional)
- Extra monthly payments (optional)
These values help the calculator estimate your full monthly payment.
5. Choose whether you’re exempt from the VA funding fee
Veterans with qualifying service-connected disabilities, Purple Heart recipients, or surviving spouses may be exempt from the funding fee.
6. Indicate whether this is your first-time VA use
The VA funding fee is higher for subsequent-use loans unless you’re exempt.
7. View your results
The calculator will show:
- Monthly principal and interest payment
- Property taxes, insurance, HOA dues
- Total monthly payment
- VA funding fee and total financed loan amount
- Total interest paid over the life of the loan
- Impact of extra principal payments
- Loan balance chart over time
- Principal vs. interest breakdown
These calculations help you understand what to expect before applying for a VA loan or refinance.
VA Funding Fee Explained
The VA funding fee is a one-time cost applied to most VA loans. It reduces the program’s long-term cost to taxpayers.
Factors that determine your VA funding fee:
- Loan type (purchase, construction, or refinance)
- Down payment amount
- Whether you’ve used a VA loan before
- Exemption status
Current funding fee ranges:
(Exact fee percentages depend on the borrower profile and loan type.)
- First-time use: typically 1.25%-2.15% of the loan amount
- Subsequent use: up to 3.3%
- Cash-out refinance: varies by loan type
- IRRRL (streamlined refinance): reduced fee, often 0.5%
Borrowers who are exempt pay no funding fee, and the calculator adjusts results automatically.
Who Qualifies for a VA Home Loan?
To qualify, you must meet at least one of the following:
- Served 90 consecutive days of active duty during wartime
- Served 181 days of active duty during peacetime
- Served 6 years in the National Guard or Reserves
- Are the surviving spouse of a veteran who died in service or from service-connected conditions
Additionally:
- Lenders typically look for stable income and a reasonable debt-to-income (DTI) ratio
- Credit score requirements are flexible and may vary by lender, typically starting around 580–620
- You must plan to use the home as your primary residence
Benefits of a VA Home Loan
VA loans are among the most powerful mortgage programs available. Key advantages include:
No down payment required
Most VA borrowers can finance up to 100% of the home price.
No private mortgage insurance (PMI)
Since VA loans are government-backed, borrowers do not pay monthly PMI even with 0% down.
Competitive interest rates
VA mortgage rates are often lower than conventional mortgage rates.
Flexible qualifying guidelines
More lenient income, DTI, and credit requirements help more veterans qualify.
Limits on closing costs
The VA restricts the fees lenders can charge borrowers.
Streamlined refinancing options
The VA IRRRL (Interest Rate Reduction Refinance Loan) allows for a fast, simplified refinance with minimal documentation.
VA Loan FAQs
Do VA loans really require no down payment?
Yes. Most borrowers can buy a home with 0% down, unless they choose to put money down to reduce the funding fee or monthly payment.
Do VA mortgage rates change daily?
Rates fluctuate with the market, but VA loans often have lower rates because of the VA guarantee.
Can I use a VA loan more than once?
Yes. You can use your VA loan benefit multiple times, as long as entitlement is restored or partially restored.
Do VA loans have prepayment penalties?
No. VA loans have no prepayment penalties, so you can pay off your loan early without fees.
Can I use a VA loan to buy a second home or investment property?
No – VA loans require the property to be your primary residence, although you may purchase a multi-unit property and live in one unit.