If you are a military man looking for a place with a family-friendly atmosphere and great weather all year round, moving to Chula Vista is a good option. But before you go house hunting, it would be wise to find out how much home you can afford, especially if you’re financing with a VA loan in Chula Vista.
Being eligible for a VA loan has its perks, including a no down payment program which gives servicemen who do not have much saved up a chance to own a home.
An online VA calculator can help a lot, but there are things you need to understand to get a clearer picture of how much house you can afford with a VA loan.
Here are some questions you need to answer before you start the loan application process.
If you are eligible for a VA loan, you are granted entitlement which is how much the VA will guarantee on the loan.
The basic entitlement is $36,000. Most lenders are willing to lend as much as four times this amount without a downpayment.
To know more about how much you can afford to buy, you can apply for a home loan in Chula Vista.
The first step in getting a VA loan is applying for a COE or certificate of eligibility. Once you qualify, you’ll know whether you have full entitlement or not.
The full entitlement is given to borrowers who have not used a VA loan before or if they’ve paid off any previous VA loans and sold the property.
The good news for eligible full entitlement borrowers is that as of 2020, VA loans have no limits which means that technically there’s no maximum to how much you can borrow with a VA loan. In reality, however, your max loan amount will depend on how much a lender approves based on your income, DTI, credit score, and more.
If you don’t meet full entitlement, you are subject to conforming loan limits set by the FHFA or Federal Housing Finance Agency.
For most cities in the U.S., the 2023 max conforming loan limit for one-unit properties is $726,200, which is more than the 2022 limit of $647,200.
In high-end areas, the limit is $1,089,300 for a one-unit home.
Your DTI or debt-to-income ratio impacts how much lenders can approve on your loan. When applying for a VA loan, lenders prefer a maximum DTI of 41%.
Va loans differ from other loans since they use residual income as a qualifying factor. Lenders look at residual income to find out if borrowers have enough income in the event a financial problem arises. Residual income is your remaining gross monthly income after paying major monthly debts, including your mortgage payments.
How high-interest rates are when you apply for your VA loan will play a part in how much home you can afford.
With rates going up in 2022, you may not be able to buy as much with the same budget compared to the previous year.
One of the benefits of a VA loan is not having to pay a downpayment upfront. While 90% of borrowers avail of this benefit, it doesn’t mean that you can’t put down something during closing. If you can pay a downpayment, the more house you can afford.
If you need help finding the best mortgage for you, we would love to discuss options.
Veterans may get intimidated by the pretty large numbers they have to deal with when buying a home for the first time. It’s a good thing there are tools and guides available to help you avoid buying a home you can’t afford.
Once you’ve answered the questions we shared above, you’ll get an idea of how much you can afford to buy.
If you’ve found your dream home in Chula Vista and you’re ready to apply for a VA loan, Five Fifty Financial with Deanna Miller can help you all throughout the home-buying process.
Our loan experts would love to help you get started on your journey to homeownership.
Message or call us today for a consultation.
We've been helping customers afford the home of their dreams for many years and we love what we do.
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1611 S. Melrose Dr., Ste A-131
Vista, CA 92801
Phone: (760) 295-2090
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