Loading
in San Gabriel, CA
San Gabriel borrowers often compare conventional and VA financing when shopping rates. Both offer solid terms, but eligibility and down payment requirements differ sharply.
If you're military-affiliated, VA loans remove the biggest barrier to homeownership—the down payment. Conventional loans work for anyone with qualifying credit and income, but require skin in the game upfront.
Conventional loans are the workhorse of San Gabriel residential financing. Not backed by a government agency, they offer flexible terms from 10 to 30 years with competitive rates for borrowers with strong credit.
You typically need 5% down minimum, though 20% avoids private mortgage insurance. Credit requirements start around 620, but expect better pricing at 740 or higher. Income verification follows standard W-2 or tax return documentation.
VA loans are exclusive to military borrowers—active duty, veterans, and qualifying surviving spouses. The zero down payment benefit is real, not a marketing gimmick. No PMI ever, regardless of equity position.
Instead of PMI, you pay a one-time funding fee (1.4% to 3.6% depending on service and down payment). This can be rolled into the loan. Credit requirements are lenient, often accepting scores in the 580-620 range that conventional lenders reject.
Eligibility is the first divider. VA loans require military service; conventional loans do not. If you qualify for both, compare monthly costs. VA's zero PMI often beats conventional's lower rates once you factor in mortgage insurance on anything under 20% down.
Property types matter too. VA loans only work for primary residences. Conventional financing handles investment properties and second homes in San Gabriel. Appraisals differ—VA requires stricter property condition standards that can kill deals on fixer-uppers.
Use your VA benefit if you have it. The zero down, no PMI combo is hard to beat financially. Even with the funding fee, your monthly payment typically runs lower than conventional at 5% down with PMI.
Choose conventional if you're buying an investment property, need a second home, or don't qualify for VA. Also consider it if you're reusing VA eligibility and want to preserve entitlement for a future purchase. I run both scenarios for clients to show real payment differences.
Yes. Your VA entitlement restores when you sell and pay off the loan. You can also buy again while keeping an existing VA loan if you have remaining entitlement.
Conventional loans typically close in 21-30 days. VA loans add 3-7 days due to stricter appraisal requirements and VA processing timelines.
No. VA rates often run slightly lower than conventional because the government guarantee reduces lender risk. Rates vary by borrower profile and market conditions.
Not with standard conventional financing. You need 20% equity to drop PMI. Some lenders offer lender-paid MI with a higher rate, but the math rarely favors it.
Conventional loans prefer 620 minimum, with best pricing at 740+. VA lenders often approve scores as low as 580-600, though guidelines vary by lender.