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in Ridgecrest, CA
Ridgecrest's proximity to Naval Air Weapons Station China Lake means many local homebuyers qualify for VA loans. Understanding how these compare to conventional financing helps you choose the right option.
Both loan types can finance homes in Ridgecrest, but they differ significantly in down payment requirements, eligibility, and costs. Your military service status often determines which path offers better terms.
Conventional loans work through private lenders without government backing. You typically need a 620 credit score minimum and can put down as little as 3% with private mortgage insurance.
These mortgages suit buyers who don't qualify for government programs or who want flexibility in property types. Rates vary by borrower profile and market conditions, with stronger credit earning better terms.
Once you reach 20% equity, you can eliminate mortgage insurance. This flexibility makes conventional loans attractive for buyers planning to build equity quickly through payments or appreciation.
VA loans serve eligible veterans, active-duty service members, and qualifying surviving spouses. The Department of Veterans Affairs guarantees these mortgages, allowing lenders to offer zero down payment options.
No monthly mortgage insurance is required, though you pay a one-time VA funding fee. This fee ranges from 1.4% to 3.6% of the loan amount depending on your service type and whether it's your first VA loan.
Many Ridgecrest buyers working at or retired from China Lake use VA loans to purchase without substantial cash reserves. The program includes rate reduction refinance options and allows you to reuse your benefit multiple times.
The most significant difference is down payment: VA loans require nothing down while conventional loans typically need 3-20%. This matters greatly for Ridgecrest buyers managing relocation costs or building emergency savings.
Monthly costs differ too. Conventional loans under 20% down include mortgage insurance that can add $100-300 monthly. VA loans avoid this expense but include a funding fee you can finance into the loan.
Property standards vary between programs. VA appraisers inspect for safety issues more thoroughly than conventional appraisers. Sellers sometimes hesitate on VA offers due to stricter requirements, though this varies by local market conditions.
Choose VA loans if you're eligible through military service. The zero down payment and no mortgage insurance typically save thousands compared to conventional financing, even accounting for the funding fee.
Conventional loans make sense for buyers who don't qualify for VA benefits or who need financing for property types VA doesn't cover. They also work well when you have substantial down payment funds and want to avoid the VA funding fee.
Some Ridgecrest buyers with VA eligibility still choose conventional loans for investment properties or when competing in situations where sellers prefer conventional financing. Your SRK Capital loan advisor can calculate both scenarios with your actual numbers.
VA loans require you to occupy the property as your primary residence. You cannot use VA financing for vacation homes or pure investment properties.
VA loans typically offer rates equal to or better than conventional loans. Rates vary by borrower profile and market conditions for both programs.
Conventional loans typically require 620 minimum credit scores. VA loans have no official minimum, though most lenders prefer 580 or higher.
Veterans with service-connected disabilities are exempt from the VA funding fee. First-time users pay lower fees than subsequent users of the benefit.
Closing timelines are similar for both loan types, typically 30-45 days. VA loans require specific appraisals that occasionally extend timelines slightly.