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in La Mirada, CA
Both FHA and VA loans offer lower barriers to entry than conventional mortgages, but they serve different buyers. FHA works for anyone who qualifies, while VA is exclusive to military members and veterans.
In La Mirada's competitive market, knowing which program saves you more money upfront can determine whether you can afford a home this year. The difference between 3.5% down and zero down is real cash in your pocket.
FHA loans let you buy with just 3.5% down if your credit score hits 580. Below that, you need 10% down, but we still see approvals at 500 in some cases.
You'll pay an upfront mortgage insurance premium of 1.75% plus monthly premiums that last the life of the loan on most purchases. This adds to your payment but makes approval easier for buyers with past credit issues or limited savings.
VA loans require zero down payment and charge no monthly mortgage insurance. You pay a one-time funding fee that ranges from 1.4% to 3.6% depending on your service status and whether it's your first VA loan.
Lenders typically want a 620 credit score, though some approve lower. The debt-to-income ceiling is flexible, and we've closed VA loans at 55% DTI when the borrower has strong residual income.
The biggest split is ongoing cost. FHA charges monthly mortgage insurance that never drops off unless you refinance, while VA has none. On a $600,000 La Mirada home, that's about $250 per month you keep with VA.
Down payment is the other major divide. FHA needs $21,000 down on that same house, VA needs nothing. But if you're not military-connected, FHA is your only government-backed option with minimal down payment requirements.
If you're eligible for VA, use it. The zero down and no mortgage insurance make it the strongest financing tool for most military buyers, especially in Los Angeles County where home prices stretch budgets thin.
FHA makes sense when you're not VA-eligible and need the lower credit requirements or higher seller concessions. It's also the move when the property won't pass VA's stricter appraisal standards, which happens with some older La Mirada homes.
Not simultaneously on the same property. If you're VA-eligible, that's almost always the better choice financially due to zero down and no mortgage insurance.
FHA typically closes slightly faster because VA appraisals require stricter property inspections. Both usually close within 30 days with responsive borrowers.
Some sellers worry about VA appraisal requirements, but strong offers overcome that bias. Your down payment size and closing timeline matter more than loan type.
FHA approves at 580, sometimes lower with 10% down. VA lenders want 620 minimum, though your service history and income can offset a lower score.
FHA and VA both require homes to be move-in ready at closing. Major repairs must be completed before funding, which rules out most true fixer-uppers.