Veterans are more likely to be homeowners than the non-veteran population. According to Trulia, this is thanks in part to low VA loan interest rates and other incentives. Veterans Affairs mortgages offer a combination of benefits, making it a very advantageous program for veterans, active military, reservists, National Guard and eligible spouses who qualify.
Military mortgage interest rates and loan limits
VA loans offer military mortgage rates that are lower than traditional mortgages and can allow veterans to borrow up to 100% of the property’s value. They also provide the unique advantage of no required private mortgage insurance. For eligible homebuyers, qualifying for a VA loan can also be easier than other mortgage financing programs. With no down payment, low credit score and flexible income requirements, the VA loan program helps many of our military members find a place to call home.
VA loan limits are the amount a qualified Veteran may be able to borrow without making a down payment. When Congress extended the benefit of VA loans to eligible veterans seventy-five years ago, the maximum loan guaranty was $2,000. Times have certainly changed. For loans closing January 1, 2019, through December 31, 2019, the loan limit for most cities is $484,350. If you’re purchasing in a more expensive area, the VA extends its maximum loan limits. View 2019 loan limits by county.
In 2020, military service members will have even more borrowing power when a new law takes effect, eliminating VA loan limits.
Five steps to determine home affordability
Just because you’re eligible for the maximum loan limit doesn’t mean buying a home at that price is the best option for your financial situation. These five steps will guide your military home buying process and help you determine how much house you can afford with a VA loan.
- Calculate your required salary to purchase
Our Guild Mortgage Affordability Calculator estimates the annual income you’ll need to buy a house by looking at the size of the mortgage, monthly debt payments, VA loan interest rate, loan terms and the related military homebuying expenses.
- Keep your debt-to-income ratio in mind
While lenders look at more than your debt when determining if you qualify for a home loan, your DTI ratio plays a significant role in whether you’re ready for a mortgage. Learn how to calculate this ratio and steps you can take to get your finances in order.
- Be prepared for common expenses
In addition to principal and interest payments, make sure that you budget for costs related to homeownership, such as property taxes and routine maintenance.
- Understand your credit score
Along with debts and savings, your credit score is a key ingredient in determining the rate you’ll pay for a mortgage. Fact-check your credit reports to ensure accuracy and correct them before applying for a loan.
- Factor in your down payment
Is buying a home with little or no down payment right for you? Determine the ideal down payment amount for your financial situation, and you’ll be one step closer to figuring out how much home you can afford.
At Guild Mortgage, we’re honored to assist the veterans who take advantage of all that the VA loan program has to offer. We are also proud to hire members of the armed forces after their time in the service has come to an end. At our headquarters, you will find quite a few veterans walking the hallways. Watch our employee spotlights on life at Guild after the military.
The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply.