3 Ways Your Child Impacts Your VA Loan

Owning a home is a part of the American dream, and for military families, VA loans offer a fantastic opportunity to achieve that dream with zero down payment and competitive interest rates. However, when bringing children into the equation, things can get a little more complex. Your dependents not only affect your overall financial picture but also influence specific aspects of your VA loan journey. Let’s delve into three key ways your child impacts your VA loan:

1. Debt-to-Income Ratio (DTI):

The DTI measures your monthly debt payments in relation to your gross income. It plays a crucial role in determining your loan eligibility and the interest rate you qualify for. Childcare expenses, including daycare, babysitting, or after-school activities, are considered recurring debts and factor into your DTI. High childcare costs can potentially push your DTI beyond the approved limits, hindering your loan approval.


  • Budgeting: Start by creating a detailed budget that meticulously accounts for childcare expenses. Look for cost-effective alternatives like carpooling with other families or exploring in-home care options.
  • Debt Paydown: Prioritize paying down high-interest debts like credit cards to free up monthly income and improve your DTI.
  • Income Sources: Consider including any child support payments received in your income calculations, potentially lowering your DTI.

2. Entitlement:

VA loan entitlement represents the maximum guaranteed loan amount you qualify for based on your service history. Having dependents, including children, can increase your entitlement, allowing you to borrow more for your dream home. This is because the Department of Veterans Affairs (VA) recognizes the additional financial needs families incur.

Maximizing Entitlement:

  • Connect with a VA Loan Specialist: Consult a seasoned VA loan specialist to fully understand your entitlement based on your specific service record and family size.
  • Utilize the Entitlement Calculator: The VA provides an online Entitlement Calculator to estimate your available loan amount.

3. Dependency Allowance:

Military personnel receive a monthly Dependency Allowance (DA) based on their marital status and number of dependents. While the DA isn’t considered income for qualifying for a VA loan, it directly impacts your ability to afford monthly mortgage payments.

Managing Affordability:

  • Factor in the DA: Include your DA when calculating your housing budget to assess affordability and ensure your mortgage payments fit comfortably within your overall expenses.
  • Seek Financial Guidance: Consult a financial advisor to optimize your budget and ensure long-term financial stability along with homeownership.

Remember, securing a VA loan with children involves careful planning and proactive measures. By understanding these key impacts and implementing helpful strategies, you can navigate the process smoothly and turn your family’s homeownership dream into reality.

Ready to embark on your VA loan journey as a military family? Reach out to Ready Front Real Estate at (737) 276-1953. Our team, led by Broker-Owner and military veteran Raoul Rowe, is dedicated to guiding you through every step of the process and helping you find the perfect home for your family.

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