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in Commerce, CA
Commerce sits in a competitive Los Angeles County market where your loan type directly impacts purchasing power. Veterans and active-duty service members have a significant advantage here with VA financing.
Most Commerce buyers choose between conventional and VA loans based on eligibility and down payment capacity. The right choice depends on your military status and how much cash you can bring to closing.
Conventional loans are the standard mortgage for non-military buyers in Commerce. You'll need at least 3% down, though 20% avoids private mortgage insurance.
Credit scores below 620 won't qualify. Rates vary by borrower profile and market conditions, but strong credit and larger down payments get the best pricing.
These loans work well for repeat buyers with home equity to roll forward. First-time buyers face steeper down payment hurdles compared to VA options.
VA loans eliminate the down payment requirement entirely for eligible veterans and active-duty personnel. You pay a funding fee instead of PMI, which can be rolled into the loan amount.
Credit standards are more forgiving than conventional loans. Many lenders approve borrowers with 580 credit scores under VA guidelines.
The program caps what sellers can charge in closing costs. You're also protected from prepayment penalties and certain junk fees that conventional lenders sometimes add.
The down payment gap is massive. VA borrowers keep their cash while conventional buyers need $15,000 to $60,000+ saved depending on purchase price in Commerce.
Monthly costs differ significantly too. VA loans charge a funding fee once, while conventional loans under 20% down add $100-$300 monthly in PMI that doesn't drop until you hit 78% loan-to-value.
Eligibility restrictions separate these programs completely. You can't choose VA financing without qualifying military service, regardless of your financial profile.
If you qualify for VA benefits, use them. The zero-down feature and lack of monthly mortgage insurance create unbeatable savings in Commerce's market.
Conventional loans make sense for non-veterans with 20%+ down or buyers purchasing investment properties and multi-units beyond VA limits. You'll also need conventional financing for certain condo projects that don't meet VA approval requirements.
Veterans buying investment properties after using VA entitlement on a primary residence often switch to conventional for their next purchase. But for your first Commerce home with military eligibility, VA financing wins on cost.
Yes, active-duty service members qualify for VA loans after 90 consecutive days of service. National Guard and Reservists need six years of service to qualify.
VA loans save $15,000-$60,000 upfront through zero down payment and eliminate ongoing PMI. The one-time funding fee is typically 2.3% for first-time users.
Conventional loans require 620 minimum credit. VA lenders often approve borrowers at 580, though individual lender overlays may set higher minimums.
VA loans cover 2-4 unit properties if you occupy one unit as your primary residence. Investment properties without owner occupancy require conventional financing.
Rarely. VA wins on cost for primary residences. Conventional makes sense only for investment properties or when you've exhausted VA entitlement on prior purchases.