VA Loans In California
Land values in most parts of California are high. If you live in a big city such as Los Angeles or San Francisco, even the most modest homes have price tags with six-digit numbers. Veterans living in California can benefit from a VA loan when it is time to buy a house. These are some of the top benefits of these loans for Californians.
Higher Loan Maximum
In 2017, the maximum VA loan amount was increased to $424,100. You can buy a nice home in a good neighborhood in a large city or in a small town with this amount or less. In comparison with a bank loan, you can usually get approved for a higher amount with a VA loan.
No Down Payment Requirement
Every California veteran knows how hard it can be to save with the high water prices, taxes and other little costs that add up such as beverage container taxes and parking fees. While a bank may require between five and 20 percent for a down payment depending on your financial status, a VA loan does not require a down payment. Even FHA loans do not offer this amazing perk.
Living in the expensive state of California is necessary for many veterans but can hurt their credit. Unexpected hikes in water or electricity costs can have vets reaching for their credit cards to make payments or falling behind in other financial obligations, which hurts credit. If your credit is classified as fair or good, you will likely be approved. However, you typically need excellent credit to be approved for a comparable rate and loan terms from a bank.
Also, you will not be denied simply for having a foreclosure or bankruptcy on your credit history. The VA understands the complex duties and repercussions of the very mobile lives of military men and women, which is why they are more forgiving about these credit blemishes than traditional lenders.
No Mortgage Insurance
Unless you pay 20 percent of the purchase price as a down payment for a home with a traditional loan, you are required to carry private mortgage insurance until you reach a certain amount of equity. PMI is typically combined with your monthly payment for the mortgage. However, the VA does not require you to have PMI. When combined with the perk of no down payment, this is an excellent savings.
Lower Closing Costs
Moving is expensive in California whether you are going to another city or just across town. You can put what you would normally pay for traditional closing costs toward your moving expenses when you use a VA loan. There are strict limits for closing costs, and sellers may pay them in some instances.
You can use a VA loan more than once, and this is also true if you had a prior foreclosure associated with a VA loan. The program is designed to be a housing advocate tool for all California veterans.