Globella Buyers Realty > Resources > Buying with a VA Loan

Buying a Home in San Diego with a VA Loan

Photo Credit: Flickr: Dale Frost 


San Diego is the proud home to a large military community, and I am honored to be able to help many military families buy homes in San Diego.

One of the first questions that first-time military homebuyers ask me is: Should I use a VA loan to buy a home in San Diego? There is sometimes a bit of stigma surrounding VA loans, but they are often just as good as (or better than) conventional loans. The VA guarantees up to a quarter of the loan amount, making VA loans a safe investment in the eyes of most lenders. And the process of buying a home with a VA loan is not substantially different than buying a home with a conventional loan or FHA loan UNLESS the home needs a lot of work... If the your VA appraiser deems the home to be unlivable, they may require certain repairs that a seller is unwilling to complete. Your exclusive buyer agent can help you determine whether or not you can obtain VA financing on any homes you're interested in. 



Four Benefits of Buying a Home with a VA Loan:


#1. You don’t need a down payment. 


This is the main draw of a VA loan. Most conventional loans require a down payment of at least 5%, while FHA loans require at least 3.5%. With a VA loan, though, eligible veterans and active military members can purchase a home of up to $424,100 in most parts of the country without a down payment. This is known as the 100% guaranty limit or 100% financing limit. In more expensive areas, the 100% guaranty limit can be even higher. For example, in San Diego County, the VA 100% guaranty limit is $690,000 (as of June 2019). The VA 100% financing limits do change occasionally, so you should always check with your local VA mortgage professional to get the most up-to-date numbers.


VA loans can also go over this limit, but if they do, the VA will only allow you to finance 75% of the property value/purchase price that exceeds the 100% limit. What does this mean in practice for San Diego VA homebuyers? If you are purchasing a $500,000 home in San Diego, you can get a VA loan for 100% of that purchase because it falls below the 100% guaranty limit. If, on the other hand, you are purchasing an $800,000 home, you can get 100% financing for the first $690,000 of the purchase price and 75% financing for the remaining $110,000. So your final VA loan (in the $800K example) will be in the amount of $772,500 and you will need to bring a down payment of $27,500. (Learn more about VA loan limits.)

 

#2. You don’t need to purchase mortgage insurance.


Borrowers with conventional loans or FHA loans who can’t put down 20% will typically need to purchase private mortgage insurance (PMI). This can add hundreds of dollars to your monthly payment. VA loans don’t require any type of mortgage insurance, regardless of how much (if any) you put down. They do come, however, with an extra upfront fee (the VA Funding Fee) that comes to about 2% of the loan amount. This fee helps finance the VA program (and helps offset some of the lender’s risk for the low-or-no down payment) and can be rolled into the loan amount. Veterans with service-connected disabilities usually don’t have to pay this fee at all.

 

#3. VA loans have more lenient requirements.


Most conventional home loans require a credit score of at least around 660, but VA buyers can often have a credit score up to 100 points lower and still qualify for a VA loan. In addition, borrowers with a history of bankruptcy and foreclosure can often still qualify for a VA loan, even if that foreclosure was on a VA loan-secured property. VA loans also don’t have any type of prepayment penalty; you can make extra payments anytime you want, which can save you lots in interest over the years. Finally, VA loans are reusable - as long as you pay off each loan, you can typically use your VA loan benefit multiple times.

 

 

#4. VA loans have fewer closing costs.


VA loans limit the amount that borrowers can pay in closing costs and restricts the types of closing costs that VA homebuyers can pay. The non-allowable closing costs under a VA loan (meaning the closing costs that the buyer cannot pay) typically include lender document fees, notary fees, broker fees, transaction coordinator fees, and termite inspection fees. The VA also does not place a limit on how much of the closing costs can be covered by the seller (which is negotiable between you and the seller when you write an offer). 

Of course, every home buyer’s situation is different, and there are times when a VA loan is not the best option. If you can swing the standard 20% down payment, a conventional loan may be a better fit for you because you can avoid the VA Funding Fee. VA loans are also intended for primary residences only, meaning you cannot use them to purchase an investment property or vacation home. VA loans also place limits on co-borrowers. If you’re planning to buy a home with someone other than your spouse or another veteran with a VA Loan entitlement who will live in the home with you, you may have to pay a down payment. And if you’re buying a condo or townhome, the VA is going to restrict your options only to complexes that are specially approved by the VA.


For many service members, however, VA loans are a great way to become a San Diego homeowner. If you think (or know) you’re eligible for a VA loan and are interested in purchasing a property in San Diego County, contact me today to request your Free VA Buyer Strategy Session - and thank you for your service!


Also Read: Five Reasons to Hire an Exclusive Buyer Agent

Also Read: Relocating to San Diego? ==> See My Helpful Links

Justin Gramm, Broker
Globella Buyers Realty
Ph: 858.437.2662Fax:858-228-9801
CA 92115 US
 CA BRE# 01714813
www.Globella.com
What is an EBA? When to Hire an Agent Buying a Home in 2020 How My Schedule Works Buyer Strategy Session How I Work When to Buy? Part 1 Globella Questionnaire About Globella Why Hire Justin? Buyer Representation How I Get Paid Helpful Buyer Links Location = Lifestyle Buyer's To-Do List Relocating to San Diego About Justin Gramm VIDEO: Meet Justin First-Time Homebuyers 10 Best School Districts How to Write an Offer Paperwork North Cty vs. San Diego What is Dual Agency? New Construction Testimonials/Reviews Retiring in San Diego About Buyer Agency The Informed Buyer Dog-Friendly Buildings Paperwork Explained Home Buying FAQ Help for Luxury Buyers 3 Investing Strategies The Dual Agent Trap Buying a Condo 5 Reasons to Rent Buying Foreclosures 1031 Exchange Tips The Globella Difference Accredited Agent (ABR) Avoid Moving Twice 5 Reasons to Buy Agency 101 Preapproval Questions Agency Disclosure Negotiation Expert Privacy Policy Second Home Expert Agent Ethics Choosing a Lender Buyer Agent Interview Foreclosures Buying a New Home Hiring an Inspector Negotiating Your Loan Top 1% of Realtors Buyer Services Avoiding Wire Fraud Termites! Get a Home Warranty Hot vs. Cold Market Hazard Insurance Tips Checking HOA Health Earthquake Insurance Condo Litigation SD Weather Tips Property Taxes Cost of Granny Flat Vesting as LLC or Trust Buying with a VA Loan Investor Services Buyer Resources Code of Ethics About the Name Contractor List Moving Checklist The Grande: Downtown Condos Seven on Kettner Treo Beech Tower Citymark at Cortez Hill Park View Gaslamp City Square Watermark 235 on Market Atria Brickyard Columbia Place Harbor Club Island Lofts Angove Lofts Jacaranda Studios Rowhomes on F Bella Via Columbia & Fir Lofts Date Street Townhomes Ecco Lofts Finestra Lofts Hawthorn Place Kettner Rowhomes Lusso Lofts The State The Waterfront Victorian House Aperture Preparing a Short Sale Offer How A Short Sale Lender Analyzes an Offer Short Sale Lenders Approval Options Different Short Sale Lenders Act Differently Loss Mitigation vs. Foreclosure Departments Short Sale Defined The Ideal Short Sale Seller Why Do Banks Even Consider Short Sales? Some Listed Short Sales Are Not Closeable La Jolla Del Mar Point Loma Rancho Santa Fe Pacific Beach Coronado Downtown San Diego Contact Us Communities Buying Short Sales FAQ International Buyers Luxury Buyers First-Time Buyers Vacation-Home Buyers Move-Up Buyers Downsizing Buyers 1031 Exchange Buyers Luxury San Diego Real Estate Fair Housing Investment Buyers San Diego Photos New-Home Buyers Testimonial Chuck Smith Testimonial Downtown Steve What's Exciting! How We Work Short Sale Testimonial Investing Buying a Home Footer Links Local Restaurant Reviews SD Restaurant Reviews Things to Do in SD SD Eatery Reviews Paperwork How We Work About Our Name How We Get Paid Before Writing Offer Before You Write an Offer Before Writing an Offer Del Mar Buyers Agent 92101 Buyers Agent Loan Doc Signing Tips Testimonial - Samantha Z. How I Work Review from Melanie & Michael Review from Erica M. Buying in 2014 Spring Home and Garden Show 2014 at Del Mar Fairgrounds Review from Daniel E. Review from Steve and Chi Buying in 2015 Spring-Home-Garden-Show-San-Diego-Del-Mar-Fairgrounds Buying a Home in 2016 Review from Michael I. Review from John and Wendy Review from Allison H. Review from Frank S. Broken-Landing-Page San-Diego-Spring-Home-and-Garden-Show-2016 Your Ivy at Carmel Valley Exclusive Buyer's Agent Your Sea Cliff Exclusive Buyers Agent Your Avery Pointe at Veridian Exclusive Buyer's Agent Your Lanai in Carlsbad Exclusive Buyer's Agent Your Pacific Gate San Diego Exclusive Buyers Agent Your SummerHouse Carlsbad Exclusive Buyers Agent 2016 San Diego Market Your-Park-at-Bankers-Hill-Exclusive-Buyers-Agent Your Aura Exclusive Buyers Agent San Diego Buyer Agent Review from Mary R. San Diego Buyer Agent Review from Dan B. Your Estates at Del Sur Exclusive Buyers Agent San Diego Buyer Agent Review from Ken and Cindy Three Reasons to Buy a Home in Hillcrest, San Diego Three Reasons to Buy in Bankers Hill San Diego Your Elms at Carmel Valley Exclusive Buyers Agent When to Buy? Part 2 San Diego Buyers Agent Review from Kevin C. Three Reasons to Buy in Encinitas San Diego San Diego Buyer Agent Review from Natacha S. Is Fall a Good Time to Buy a New Home? Your Elms at Carmel Valley Exclusive Buyers Agent Your Canterra Exclusive Buyers Agent Three Reasons to Live in Normal Heights, San Diego San Diego Buyer Agent Review from Renaud P. Buying a Home in 2018 Your Estancia at Cielo Exclusive Buyers Agent Your Upper Cielo Exclusive Buyers Agent Three Reasons to Buy a Home in La Mesa Your-Cottages-at-St-Cloud-Exclusive-Buyers-Agent Your Harmony Grove Exclusive Buyer Agent Three Reasons to Live in Kensington, San Diego 8 Home Maintenance Tips for Spring Federal Interest Rate Hike and San Diego Homebuyers Review from Stewart H. Review from Roland M. Review from Duane and Nancy Review from Natacha S. Review from Shandi and Michael Your Savina Exclusive Buyers Agent Your Escaya Exclusive Buyers Agent Your Terraces at Robinson Ranch Exclusive Buyers Agent Your Signature Exclusive Buyers Agent Your Garrison Landing Exclusive Buyers Agent Review-from-Joseph-C Review from Kara S. Review from Martin and Jackie 2018 Market Update Three Reasons to Live in South Park San Diego Review-from-Adam-W. New Granny Flat Law in San Diego Why Buy at Civita Review- from-Randy-F. Review-from-Oline-C Buyer's Privacy Rights Review from Alex M. Three Reasons to Live in Tierrasanta Review from Greg C. Review from Kenjie S. Review from L.T. Review from Mike L. Sandicor Statistics Videos Market Statistics Request a Buyer Strategy Session / Interview VIP Home Finder Home Investigation Tips Free Buyer Reports Free Investor Reports Welcome Subscribe Site Map