VA Loan Payment Formula:
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Definition: This calculator computes the monthly payment for a VA loan, including the VA funding fee in the principal if not paid upfront.
Purpose: It helps veterans and active service members estimate their mortgage payments for VA-backed home loans.
The calculator uses the standard mortgage formula with funding fee included:
Where:
Explanation: The funding fee is added to the principal (unless paid upfront), then standard amortization formula is applied.
Details: VA loans typically require no down payment and no private mortgage insurance (PMI), but include a one-time funding fee.
Tips: Enter the loan amount, funding fee percentage (default 2.15% for first-time use), interest rate, and loan term. All values must be > 0 except funding fee which can be 0 if exempt.
Q1: What is the VA funding fee?
A: A one-time fee paid to the VA that helps fund the loan program. It varies from 0% to 3.3% depending on service type, down payment, and usage.
Q2: Who is exempt from the funding fee?
A: Veterans receiving VA compensation for service-connected disabilities and certain other groups.
Q3: Why no PMI on VA loans?
A: The VA guarantee replaces the need for private mortgage insurance.
Q4: What's the maximum VA loan amount?
A: While there's no maximum, lenders typically limit loans to $ conforming loan limits unless the borrower has full entitlement.
Q5: Can I pay the funding fee upfront?
A: Yes, if paid upfront it won't be included in the loan principal.