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in Santa Fe Springs, CA
Santa Fe Springs buyers often choose between conventional and VA loans, each with distinct advantages. Your military service status determines eligibility, but even qualified veterans sometimes pick conventional financing.
We help Los Angeles County borrowers compare both options across 200+ lenders. Most Santa Fe Springs deals close faster when you know exactly which loan type matches your down payment and credit profile.
Conventional loans require 3-20% down depending on whether you're buying your first home or moving up. You'll need 620+ credit for most programs, though 740+ gets you the best rates.
Private mortgage insurance kicks in below 20% down, adding $100-300 monthly on typical Santa Fe Springs purchases. That PMI drops off once you hit 20% equity through payments or appreciation.
These loans cap at $766,550 in Los Angeles County for conforming limits. Go higher and you're into jumbo territory with stricter credit and reserve requirements.
VA loans require zero down payment for eligible veterans and active-duty service members. You'll pay a one-time funding fee of 2.15-3.3% unless you're exempt due to disability.
No monthly mortgage insurance exists with VA financing. That difference alone saves $200-400 monthly compared to conventional loans at the same purchase price.
Credit guidelines are more flexible than conventional, with many lenders approving 580+ scores. Santa Fe Springs veterans with past credit issues often qualify when conventional doors stay closed.
The down payment gap is obvious: VA needs nothing while conventional requires 3-20%. But the insurance structure matters more long-term for Santa Fe Springs buyers.
VA borrowers pay no monthly PMI but do pay an upfront funding fee you can roll into the loan. Conventional requires monthly PMI below 20% down that vanishes at 20% equity.
Property appraisals differ too. VA appraisers flag maintenance issues conventional appraisers ignore, sometimes killing deals on older Santa Fe Springs homes needing repairs.
Interest rates run 0.25-0.5% lower on VA loans due to the government guarantee. On a $500,000 purchase, that's $60-125 less per month before you even factor in the PMI savings.
Use your VA benefit if you're eligible and buying a property that meets VA condition standards. The zero-down option plus no PMI makes it unbeatable for most Santa Fe Springs military buyers.
Pick conventional when you're not VA-eligible, buying a fixer needing work, or purchasing a second home. Also consider it if you have 20%+ down and the funding fee would cost more than skipping PMI entirely.
Some veterans with significant down payments run both scenarios. A 20% down conventional loan avoids PMI and the VA funding fee, though you'll lose the rate advantage.
Talk to a broker who can quote both. We see Santa Fe Springs deals where conventional wins despite VA eligibility, usually on properties with deferred maintenance or when buyers have 25%+ down.
Yes, your VA entitlement restores after you sell and pay off the previous VA loan. You can also buy a second property while keeping your first VA loan if you have remaining entitlement.
Conventional typically closes 2-5 days faster since VA appraisals take longer and require property condition reviews. Both usually close in 21-30 days with an experienced lender.
Some Santa Fe Springs sellers worry about VA appraisal requirements killing deals on older homes. A strong offer with quick close timeline and appraisal gap coverage fixes this concern.
Conventional lenders want 620 minimum, 740+ for best pricing. VA lenders often approve 580+ scores, though rates improve significantly above 640.
Veterans with service-connected disabilities are exempt from the 2.15-3.3% funding fee. Everyone else pays it, though you can roll it into your loan amount instead of paying upfront.
VA loans have no loan limit for eligible borrowers with full entitlement. Conventional caps at $766,550 before going jumbo, making VA stronger for higher-priced Santa Fe Springs properties.