How Much VA Home Loan Can You Afford? Figuring it Out.
Mary Carlson
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April 15, 2020
Using the VA loan to buy my own homes has given me the opportunity to provide my experience for you. I am NOT a licensed mortgage broker.
This is my personal experience and now as a REALTOR®, I am looking forward to assisting other Veterans and Active Duty military with my own personal experience. Now, I can save you any headaches or confusion when buying your own home using the VA loan.
DISCLAIMER: Make sure you get a licensed mortgage broker.
I recommend shopping around for a couple lenders so you can get the best rate.
The VA helps service members, veterans and eligible surviving spouses find beneficial opportunities to becoming homeowners.
VA home loans are provided by private lenders.
The VA guarantees a portion of the loan which allows private lenders to provide you with better terms than other options.
The biggest benefit that I have found has been the ability to buy a home without a down payment or private mortgage insurance. This reduces upfront costs and allows you to get in to home-ownership easier!
My VA loan gave me the opportunity to invest in real estate at an early age. I bought my first house when I was 20 years old.
There is also a funding fee needed if you are not a service-connected disabled veteran or surviving spouse. I recommend going on the VA website to see if you are eligible to waive a funding fee!
Currently, the funding fee tables through September 30, 2028 are:
What does this table mean? If you are in the military (not reserved or National Guard), and you do not pay a down payment you will be paying 2.15% of the purchase price for the first use of your VA LOAN.
For example, you have your eye on a home that is priced at $500,000. You will be paying a 2.15% funding fee, which is $10,750.
I’ve bought and sold a couple homes using my VA loan. The VA requires the buyer to have residual income after calculating your income is able to meet: the mortgage payment, other shelter expenses (i.e. electric, water, gas, waste, cable, etc.), debts and obligations, and family living expenses.
The VA has established lenders to use 5% residual income calculation, unless established at a higher percentage in a specific jurisdiction and/or specific loan amounts. When I bought my home in July of 2019, with a loan of $435,000, I was required to have 20% in residual income. See the below Table of Residual Incomes by Region for exact amounts from the VA. San Diego is in the West region.
I have included a downloadable PDF so you can calculate your own income and expenses.
To get started, you will need to apply for a Certificate of Eligibility (COE) on the ebenefits website. Once you obtain the COE, VA loans are obtained through a lender of your choice. You can obtain a COE through eBenefits, by mail, and often through you lender. If you need help getting your COE, follow the steps on the previous blog: How to Obtain Your Certificate of Eligibility from the VA.
Now that you have an approximate amount you can afford, meet with your lender to get a preapproval. They will need most of the information on your PDF sheet.
In San Diego county's housing market, property moves very quickly. You will likely need a preapproval before you can start looking at properties in your area. This is so when you find the home of your dreams, you can move quick!
Once you get your preapproval, I can help you find the home of your dreams!
If you have any questions, or need further assistance with the process, do not hesitate to reach out:
Mary Carlson
looking Forward to connecting with you!
Mary D. Carlson joins forces with the Team Azizi, a division of Compass, with a distinguished military and academic career. Mary Carlson, originally from Texas, brings Southern character with a distinguished military and academic career. Mary began her real estate career buying houses across San Diego County. She navigated her way through the Southern California marketplace and found her passion while still in the service. Mary brings a diverse skill set and a breadth of knowledge to Southern California Real Estate. Her previous career experience as an Enlisted Veteran and Civilian Engineer for the U.S. Navy allowed her to build leadership skills and gain emotional intelligence, and resiliency. Mary's #1 priority to her client is showing the extreme benefits real estate can provide as an investment and a home, while also providing them value and experience through any real estate process with a passion she believes in.
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