How Much House Can You Afford When You Use a VA Loan

50% off sale? I'll take 4! We've all been there. When you're saving money it can be tempting to buy a lot more than you need and it's no different when it comes to a big purchase like a home. When you buy with your VA loan benefits, you can end up saving a lot of money. Here's how to make sure you're taking full advantage of your savings and only buying what you can afford.  

Know what category you're in 

VA loans aren't one size fits all and you'll get slightly different benefits depending on your military service. When you apply for your Certificate of Eligibility, you'll be describing your service and verifying your eligibility. Most people who get a VA loan are required to pay a funding fee, which helps offset any loans that end up defaulting and keeps interest rates low for all users. How much you pay--or if you pay the fee at all--depends on your military category and disability status, so it's important to factor that in when making a budget for your new home. You can use our VA loan calculator to see how your eligibility affects your payment. 

  • Veteran
    • Disabled veteran
  • Active Duty
  • Surviving spouse
  • National Guard or Reserve member

But that doesn't mean you should over-indulge

Owning a home might be cheaper than renting in your town, but there are other costs associated with it. It's important to have an emergency savings account for big and small repairs. That will help you get through if your hot water heater suddenly breaks or if you need to steam clean the carpet after your kids spill grape juice on it. Speaking of carpets, now that you're a homeowner you're probably going to want to start making upgrades to your home to make it feel more like your own. Those gallons of paint and boxes of hardwood laminate can start to add up and if you've maxed out your monthly budget on your mortgage payment alone, you run the risk of being unhappy with your home or getting into credit card debt trying to fix it up. Even if you're not ready to make upgrades to your home, being a homeowner means general maintenance on the house and you'll have to factor that into your budget. Check out our first-time home buyer's guide to home maintenance to get a better idea of what to expect. 

What happens when you leave the military?

If you're in the military when you buy your house, you might be relying on housing stipends and other financial benefits to help pay the mortgage and any other home maintenance costs. But if you don't plan on making a career out of the military what's your plan for when you get out? You may be facing a cut in your income if you decide to go back to school or if you're entering an entirely new field of work. Be sure you'll still be able to afford your mortgage payment even without your military income. 

Ready to get out there and use your VA loan benefits? Check out our VA loan learning center to learn more and apply for a loan