The maximum amount of the VA loan no longer exists
If you are lucky enough to qualify for a VA loan, you get some serious benefits.
With no down payment requirements, no mortgage insurance, and some of the lowest interest rates on the market, a VA loan is one of the best mortgage products you can find.
More, VA loan changes adopted earlier this year introduces another advantage: there is no longer a maximum VA loan amount.
Now, to be clear, that doesn’t mean you can get a VA loan for whatever amount your heart desires.
There are still limits to what you can buy – they just depend more on your unique financial situation, rather than a national limit.
What “No VA Loan Limits” Means to You
Eliminating a VA max loan limit doesn’t mean a spending spree is on your horizon. But he Is make it easier to buy a larger house or a house in a more expensive market.
More importantly, you will be able to buy this more expensive property without putting in a lot of money (or not at all, if you prefer).
But before you do that, it’s important to remember that skipping the down payment – while allowed – will result in a higher loan balance and, therefore, a larger monthly payment. For example:
| Purchase price | Advance payment | Interest rate | Monthly payment of principal and interest |
| $ 300,000 | 0% | 3.75% | $ 1,400 |
| $ 300,000 | 10% ($ 30,000) | 3.75% | $ 1,250 |
For these reasons, you will have to be smart to buy within your means. Use a mortgage calculator to figure out what you can afford and let it guide your home search.
VA Loan “Limits” Now Depend On Your Budget
Having no maximum VA loan amount simply means that your borrowing threshold will depend on your unique financial scenario and budget, rather than a limit set by the government.
In short: instead of asking, “how much can I borrow with a VA loan?, “you should now focus on”How Much Home Can I Afford With A VA Loan?“
To determine what you can afford, you will need to consider your income, credit rating, debt, and other factors.
Ultimately, your VA lender will set your maximum loan amount based on:
- Your income: How much do you bring back each month? Lenders generally don’t want you to spend more than 30% of your income on housing costs.
- Your credit rating: What is your creditworthiness? Higher credit scores will result in a better interest rate and a lower monthly payment to start. They might also give you a higher maximum loan amount as a result.
- Your debts: How much are required to pay for debts each month? How much of your income does this represent? Your debt to income ratio will also influence your loan amount
- Your deposit (if applicable): Are you planning to make a advance payment? If yes how much ? A down payment will lower your monthly mortgage costs and may also qualify you for a larger loan.
Typically, you can expect borrowers with lower debt-to-income ratios, large down payments, and higher credit scores to see higher VA loan limits.
If your credit score is lower, if you skip the down payment, or if you have a lot of debt, you will be able to afford less, and therefore you will be eligible for a smaller loan.
How To Determine Your VA Loan Limit
To get an idea of ​​what you could afford with a VA loan, you should check out VA mortgage rates.
Then use those rates, plus your monthly income, local home prices, debt, and down payment, to determine a comfortable monthly mortgage payment.
You can also use our VA Loan Calculator to assure VA financing fees and other expenses are factored into the equation.
The information contained on The Mortgage Reports website is provided for informational purposes only and does not constitute an advertisement for any products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, its parent company or its affiliates.
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