If you’re like most homebuyers, you assume that finding your dream house is the hardest part of the homebuying process. Believe it or not, finding the right house for your needs is actually one of the easiest things for you to do.
Instead, figuring out how much home you can afford and finding a VA home loan that can help you buy your new home is much more difficult and time-consuming. Why? Because you need to have a clear understanding of how much home you can afford.
Estimating your mortgage payments is the best way to narrow down your budget before you start applying for financing.
How to Estimate Your VA Home Loan Payments
Luckily, estimating your monthly mortgage payments, whether you’re financing the house with a conventional mortgage or a VA home loan, is easier than you think. Here are a few key things you need to do to accurately estimate those payments.
Look at How Much You’ll Borrow
The biggest contributing factor to your monthly loan payment amount is the amount of money you’re borrowing in the first place. This is called the loan’s principal and the larger it is, the higher your payments will be.
Consider Your Interest Rate
Every VA home loan accrues interest over the life of the loan. The amount of interest you’ll have to pay largely depends on your financial situation. If you have a high credit score, you’ll get a lower interest rate, thereby saving you money.
Understand the Loan’s Term
The longer you have to pay down your loan, the smaller your monthly principal payments will be. Divide the total loan amount by the number of months you have to pay the loan off in full. This will give you a rough estimate that you can then add the cost of the interest accrued to.
Remember Other Costs
Even the best VA home loan will have other costs factored into the monthly payments. These will include things like property taxes, homeowners’ insurance, and any fees associated with the loan. Add those costs to your estimated payments and you’ll have a better idea of what you’ll owe each month.
Try Our Calculator
If you’re trying to find the best VA home loan to keep your payments as low as possible, speak with our experienced representatives today. We’ll help you explore your options and walk you through how to use our mortgage calculator so you can better understand your homebuying budget.