How Much Home Can You Really Afford? 3 Factors Not To Overlook

After years of military sacrifice, you are ready to exercise your VA home loan benefit. Settling into a home in a nice neighborhood with an affordable mortgage is key. In terms of loan value, veterans are entitled to an amount that is equal to up to 4 times their entitlement, provided they meet credit and income limitations. This is an excellent place to begin. However, there are a host of other factors that should be considered.


Be prepared to cover the costs of utilities and don't compare what you paid as a renter to assess what you will pay as a homeowner. In addition to the size of the home, where the property is located should also be factored in. For instance, if your home is on the side of the street that has more exposure to the sun, you could easily have a higher electric bill than a neighbor who has a home on the opposite side of the street that is the same size.


Your apartment is only three miles away from your job. However, the home you're considering is 20 miles away. Extra time to travel to work isn't the only thing you need to factor in. Based on fuel and wear and tear, it cost about 57 cents per mile to operate a vehicle.

At three miles, you would spend $68.40 a month to commute back and forth. At 20 miles, you would increase to $456 a month. These extra costs can quickly add up and if you're already on a tight budget, this could impede on your ability to cover your mortgage. Don't overlook your commute.  


As a homeowner, you are required to pay taxes on your property. What's due depends on the value of your home and the local tax rate. In a state like North Carolina the property tax rate averages around 0.84%. In Texas, the average jumps to 1.94%.

This might not seem like a significant increase, but a homeowner with a $185,000 home in North Carolina would owe about $1500 annually. The same home in Texas would have a nearly $3600 annual tax bill. Taxes are a requirement of home ownership. Make sure you can afford the mortgage and this payment.

When determining how much home you can afford, don't get too fixated on the mortgage. There are far more expenses that come with owning a home. If the mortgage is already near the cap of your affordability limit and you haven't considered these costs, you might want to go back to the drawing board. For more information, contact a lender like Texas Veterans Home Loans.