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in Bakersfield, CA
Bakersfield homebuyers face an important choice between conventional and VA loans. Each offers distinct advantages depending on your military service status and financial situation.
Understanding the key differences helps you select the right financing for your Kern County home purchase. Both options serve different borrower profiles with unique benefits and requirements.
Conventional loans represent traditional mortgage financing without government backing. These loans typically require a minimum down payment of 3% to 5% for first-time buyers and 5% to 20% for others.
Lenders set their own credit and income standards for conventional financing. Borrowers with credit scores above 620 and stable employment history generally qualify, though better rates require higher scores.
Private mortgage insurance (PMI) applies when down payments fall below 20%. This insurance protects the lender and adds to your monthly payment until you reach 20% equity in your Bakersfield home.
VA loans provide government-guaranteed financing exclusively for eligible veterans, active-duty service members, and qualifying surviving spouses. The Department of Veterans Affairs backs these loans, allowing lenders to offer favorable terms.
Zero down payment represents the most significant VA loan advantage. Eligible borrowers can finance 100% of their Bakersfield home purchase without depleting savings for a down payment.
VA loans eliminate monthly mortgage insurance requirements regardless of down payment size. Instead, borrowers pay a one-time VA funding fee that can be rolled into the loan amount.
Eligibility creates the primary distinction between these loan types. Conventional loans serve all qualified borrowers, while VA loans require military service verification through a Certificate of Eligibility.
Down payment requirements differ substantially. Conventional financing demands 3% to 20% down, while VA loans allow zero down payment for eligible borrowers purchasing in Bakersfield.
Cost structures vary between programs. Conventional loans charge PMI on low down payments, while VA loans assess a one-time funding fee. Rates vary by borrower profile and market conditions.
Property standards also differ. VA loans require properties to meet specific habitability standards and appraisal guidelines that exceed typical conventional loan requirements.
VA loans typically offer superior value for eligible service members and veterans. The zero down payment requirement and absence of monthly mortgage insurance create significant savings over the loan life.
Conventional loans serve borrowers without military service eligibility or those purchasing properties that don't meet VA standards. Investment properties and certain property types require conventional financing.
Your decision depends on eligibility, available savings, and property type. Eligible veterans shopping in Bakersfield should compare both options, as conventional loans sometimes offer advantages for specific situations like jumbo loan amounts or unique properties.
Yes. Eligible veterans and service members can purchase Bakersfield homes with zero down payment using VA loans, financing 100% of the purchase price.
Conventional loans require PMI when down payments fall below 20%. This insurance adds to monthly payments until you reach 20% equity through payments or appreciation.
VA loans typically offer competitive rates due to government backing. Rates vary by borrower profile and market conditions for both loan types.
Yes. Veterans can choose conventional financing instead of VA loans. Compare both options as conventional loans may better suit certain property types or financial situations.
Conventional loans typically require 620+ credit scores. VA loans have no official minimum, though most lenders prefer 580-620 or higher for approval.