What the va mortgage calculator tells you
A VA loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs for eligible service members, veterans, and certain surviving spouses, allowing a 0% down payment and no private mortgage insurance.
In place of a down payment requirement and PMI, most borrowers pay a one-time VA funding fee — 2.15% of the loan on a first use with no down payment, 3.3% on subsequent uses, or 0% for those exempt due to a service-connected disability. The fee is usually financed into the loan.
Because there is no PMI, VA loans often produce a lower monthly payment than comparable low-down-payment options. For veterans buying in a competitive market like Miami, the $0-down structure preserves cash for closing costs or reserves.
How it works
- Start with the base loan = home price − down payment. Most VA buyers put $0 down, so the base loan equals the full price.
- Add the VA funding fee: total loan = base loan + (funding fee% × base loan), using 2.15% for first use, 3.3% for subsequent use, or 0% if exempt. The fee is typically financed into the loan.
- Compute principal & interest on the total loan using M = L·r / (1 − (1 + r)^−n).
- Add property tax ÷ 12, homeowners insurance ÷ 12, and any monthly HOA dues.
- There is no PMI on a VA loan, so the monthly payment is principal & interest plus those escrow items only.
Frequently asked questions
How does a VA loan work?
A VA loan is issued by a private lender but partly guaranteed by the Department of Veterans Affairs, which lets lenders offer $0 down and skip private mortgage insurance. Eligible veterans and service members finance the home with no down payment and a one-time funding fee that is usually rolled into the loan. The VA guarantee reduces the lender’s risk, which is what makes the favorable terms possible.
Do VA loans really require no down payment?
Yes — qualified borrowers can finance 100% of a home’s value with no down payment, one of the biggest advantages of a VA loan. You may still choose to put money down to lower the loan balance and reduce the funding fee. Closing costs and the funding fee can sometimes be the only cash needed at the table.
What is the VA funding fee?
The VA funding fee is a one-time charge that helps sustain the loan program in place of mortgage insurance. With no down payment it is 2.15% of the loan for first-time use and 3.3% for subsequent use, though a down payment lowers it. Veterans receiving compensation for a service-connected disability are typically exempt and pay 0%.
Do VA loans have PMI?
No — VA loans never carry private mortgage insurance, even with $0 down, which is a major reason their monthly payments often beat conventional and FHA low-down-payment loans. Instead of monthly insurance, you pay the one-time VA funding fee. Removing PMI from the payment can save a borrower well over $100 a month on a typical loan.
Who is eligible for a VA loan?
Eligibility generally extends to active-duty service members, veterans who meet minimum service requirements, certain members of the National Guard and Reserves, and some surviving spouses. You confirm eligibility by obtaining a Certificate of Eligibility (COE) from the VA. Beyond service status, lenders still check income, credit, and the property to approve the loan.
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