VA home loans in California

Why the VA loan is the strongest loan in California

In a state where a typical home costs several times the national average, the down payment is usually what stands between a family and a purchase. The VA loan removes it. An eligible veteran with full entitlement can buy with nothing down and no VA loan limit, so a $900,000 home in Ventura County or the San Fernando Valley is within reach without saving $180,000 first.

It also skips the monthly mortgage insurance that FHA and low-down conventional loans carry. On a $750,000 loan that alone can be worth several hundred dollars a month. Add rates that usually price below conventional, and the VA loan is often the cheapest way to own a home for anyone who has earned it.

Who is eligible

• Veterans who meet the minimum service requirement, generally 90 consecutive days in wartime or 181 days in peacetime, with a discharge other than dishonorable.
• Active-duty service members after 90 days of continuous service.
• National Guard and Reserve members with six years of service, or 90 days of active-duty service under federal orders.
• Surviving spouses of service members who died in service or from a service-connected disability, in most cases.

Your Certificate of Eligibility shows your entitlement. We can usually pull it for you online in a few minutes.

What lenders look at

The VA sets no minimum credit score, but lenders do, and most programs we work with start around 580 to 620. Instead of relying only on debt-to-income ratio, VA underwriting also checks residual income: the money left each month after your housing payment, debts and taxes. It is a practical test of whether the payment fits your budget.

The home must be your primary residence and pass a VA appraisal, which includes basic condition requirements. One to four units qualify, so you can buy a duplex, live in one side and use the rent from the other to help you qualify.

The VA funding fee

In place of mortgage insurance, VA loans carry a one-time funding fee that is usually financed into the loan. For a first-time purchase it is 2.15% with less than 5% down, 1.5% with 5% to 10% down and 1.25% with 10% or more. Later use with less than 5% down costs 3.3%. Veterans receiving VA disability compensation are exempt, which takes thousands off the cost of the loan.

Refinancing with VA

If you already have a VA loan, the IRRRL (Interest Rate Reduction Refinance Loan) is one of the simplest refinances available. It needs no appraisal in most cases, very little paperwork and a 0.5% funding fee, and it must lower your rate or move you from an adjustable to a fixed rate.

A VA cash-out refinance can take you up to 100% of the home’s value, or refinance a conventional or FHA loan into a VA loan to drop mortgage insurance. If your current rate is low, though, compare it with a home equity line first. A cash-out refinance resets the whole balance at today’s rate, while a line only charges it on the cash you take.

Working with a VA lender who knows California

California VA purchases come with their own wrinkles: condo projects that need VA approval, seller credits to cover closing costs in a competitive market, and appraisals that have to support the price. Mike prices your VA loan with us and, when it helps, against several wholesale lenders, and handles those details from pre-approval to closing.