VA Home Loan Calculator
Active duty military members and veterans can use this calculator to quickly estimate their loan funding fee and the monthly loan payments on their mortgage.
Current 30 YR Fixed Mortgage Rates
The following table highlights locally available current mortgage rates. By default 30-year purchase loans are displayed. Clicking on the refinance button switches loans to refinance. Other loan adjustment options including price, down payment, home location, credit score, term & ARM options are available for selection in the filters area at the top of the table.
A Guide to the VA Home Loans Programs for Veterans & Active Duty Families
Veteran Affairs mortgages, better known as VA loans, are loans that help many US service members find a way into home ownership. Offering military veterans a way to get their own home, rebuild their home or even stabilize a troubled time, VA loans can make smart solutions for qualified candidates.
While a VA loan is not going to work for every situation, understanding the basics will help you to see if they are a good option for you to consider either now or in the future.
What Are VA Loans?
VA loans are loans that have a governmental guaranty to the lender. The Veteran’s Affairs Department (VA) helps former military members and their families to buy, repair, adapt or retain a home for personal occupancy.
The VA guarantees a portion of the loan, so a lender can offer its recipients better rates and less up-front costs. The loan is made between a Veteran and a lender and would follow established VA loan protocols and requirements.
There are various loan types to consider, all subsidized in part by the VA:
- Purchase loans – loans used for new homes, requires no down payment
- Cash-out refinance – refinance loans to take advantage of earned equity
- Interest Rate Reduction Refinance Loan (IRRRL) – to refinance an existing VA loan with a new VA loan at lower rates
- Native American Direct Loan (NADL) – to assist Native American Veterans with all types of loans for homes on Federal Trust land
- Adapted Housing Grants – to help Veterans with disabilities caused by their military service to adapt their home for full or partial disabilities
Some states offer additional resources to Veteran citizens, which you can explore through your state VA offices.
Who Is Eligible?
Active service members, and their spouses and families, are typically eligible for VA loans. This includes those serving in the National Guard and reservists, though time served in service does matter toward eligibility.
Currently, active-duty personnel will qualify after six months of service. For National Guard members and reservists, this time frame increases to a six-year waiting period. National Guardsmen and reservists can take advantage though, with 180 days of activity…unless it is an active time of war – which helps everyone to qualify after just 90 days.
Spouses or dependents of a Veteran who has died from service or a service-related disability can also qualify for VA loans. There may be slightly different rates and terms offered to individuals based on the branch of service in which they served and how long they were in service.
Any potential VA loan holder would need to complete a Certificate of Eligibility (COE) to receive the benefits. Do understand that this does not stop you from starting the mortgage process before you receive your COE. Some lenders can also help you to obtain the COE as part of their own loan pre-approval procedure. You will usually bring your COE to the lender of choice, who will then start your approval process, and a COE allows you to shop your options more easily.
How do VA Loans Compare to a Traditional Mortgage?
When comparing the benefits side-by-side, VA loans definitely have some advantages over a traditional mortgage to consider, as well as some restrictions:
|Traditional Conforming Mortgage||VA Loan|
|Primary residence ONLY||(can also be for investment or second residence)||X|
|2018 loan limit||(Varies by county, between $453,100-$679,650 in 2018)||(Varies by county, between $453,100-$679,650 in 2018)|
|Down payment||3%, or waived if enough down||$0- No down payment|
|PMI (mortgage insurance)||Required if < 20% down||Not required|
|Credit score||Generally, 700 FICO to qualify for good rates||Not required*|
|Fees to close||Varies by lender||1.25-3.3% of loan value, depending on down payment and type of service-member|
|Debt-to-income (DTI) baseline||Usually under 36%||Not Factored/considered*|
|June 2018 30-yr interest rate||4.92%||4.74%|
*Though the VA may not have their own credit requirements or DTI levels, it is important to note that the lender you choose certainly may have restrictions to consider, or a baseline that they are seeking for successful VA loan applicants.
- FICO credit score: A 620 FICO is generally noted as the current credit baseline for VA loans. A lower credit score may not impact your ability to receive offers but will almost certainly impact the quality of the offers you receive. In June of 2018 VA loans for purchases had an average FICO of 711 while VA loans for refis had a FICO of 691. Conventional purchase loans had an average FICO of 753 while conventional refis had an average FICO of 726.
- Debt to income ratio: Likewise, a DTI of 40% or less is desired by most lenders, and anything higher might result in weaker offers. In June of 2018 VA loans had avergae frontend & backend ratios of 27 & 43 for purchase, while the frontend and backend ratios were 27 & 42 for refis. Conventional home purchases had average frontend & backend ratios of 24 & 36, while conventional refis had average frontend & backend ratios of 26 & 40.
- Loan to value: In June of 2018 VA loans used for purchase had an average loan-to-value of 98%, while refis had an average LTV of 90%. 47.5% of VA refis had an LTV above 95%. Conventional purchase home loans had an LTV of 80% while conventional refis had an LTV of 63%.
June 2018 mortgage market data courtesy Ellie Mae's Origination Insight Report, which mines application data from a robust sampling of applications initiated on the Encompass Digital Mortgage Solution platform.
The very lowest side of fees up-front and relaxed credit requirements are definitely attractive selling points of the VA loan. Though there is a ceiling on the amounts you can guarantee through the VA and it must be for a primary residence only, these loans will still attract many first-time buyers as well as those looking to rebuild their credit.
Yet the VA loan is also an attractive loan for those who qualify and have no credit challenges. Lower APRs, no down payments and a lack of PMI make them solid investments for all qualified Veterans to consider at any point of the curve.
Can I Reuse the VA Loan Program?
The short answer, is yes, you can refinance a VA loan with another VA loan. Typically, you will look to either a cash-out refinance, or an Interest Rate Reduction Refinance Loan (IRRRL).
The cash-out refinance allows you to harness the value of the equity earned in your property. Simply put, if you only owe $100,000 on a home valued for $350,000, you may be able to leverage some of the $250,000 in earned equity with a cash-out refinance loan.
The IRRRL is also a common option and requires an existing VA loan to be refinanced at better rates to a new VA loan. So, if you saw you could lower your APR, monthly payment, or maybe even both, you might find a lender offering an IRRRL to help answer your needs.
If you are a Native American Veteran, you may have additional options to consider that will vary by tribe, as well as state participation. You can learn more by exploring the VA’s information on their NADL Program and its options and benefits.
Understanding the Fees
Though there are no down payments made with a VA loan, there is a one-time “funding fee” that will be applied. It will vary by the type of Veteran using it as well as the amount of the down payment being made.
Armed forces members who qualify for the first time can expect to pay 2.15% of the loan amount as a funding fee. If they put more than 10% down, that fee can drop to 1.25% – though if it is for a second loan without a down payment, the fee would be 3.3% of the loan amount.
Note that the fee is waived for the disability grants, and for those servicepeople with VA loans who also receive disability compensation.
While these fees can be substantial, they will still tend to be lower or comparable to the closing costs associated with any other type of loan.
Should I Refinance My Traditional Mortgage to a VA Loan?
If you are holding a traditional mortgage and can qualify for the VA loan programs, it is almost always going to be a smart move to do so.
The benefits typically include a lack of closing costs, no down payment needed, lowest possible rates and best terms, and a no mortgage insurance, or PMI every month. The lack of monthly insurance premiums alone will make a VA loan attractive to any mortgage holder.
It is important to note, that with enough money down you can also get a traditional mortgage with no PMI – but it does require more of the borrower than a VA loan.
The COE (certificate of eligibility) will allow you to take advantage of VA loan programs and avoid the larger down payment. The VA loan allows you to skip the down payment completely, which is a huge plus to consider.
Ultimately, if you have already sacrificed your personal freedoms to serve your country, take advantage of the VA loan program. It is meant to help and be way to say thanks for your service…it is a perk.
The VA will also step in and help struggling Veterans who need additional time to get fully on their feet – unlike any other loan program. The VA loan is a smart and sensible program for any active serviceperson or Veteran to contemplate, or evaluate against other loan options.