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in Temple City, CA
Temple City buyers often weigh FHA against VA loans when shopping for government-backed financing. Both offer easier qualification than conventional mortgages, but they serve different borrowers with distinct requirements.
FHA loans work for anyone meeting credit and income standards. VA loans require military service but deliver better terms for those who qualify.
FHA loans need just 3.5% down with credit scores as low as 580. Temple City buyers use them to access homes they couldn't afford with conventional 5-10% down requirements.
You'll pay upfront mortgage insurance plus monthly premiums for the loan's life on most FHA deals. That ongoing cost stacks up over time, especially on Temple City's mid-range home prices.
FHA caps your debt-to-income ratio at 50% with compensating factors. This flexibility helps self-employed borrowers and those with higher debt loads get approved.
VA loans require zero down payment for eligible veterans and active-duty service members. This matters in Temple City where even 3.5% down represents significant cash.
VA charges a one-time funding fee instead of monthly mortgage insurance. You skip ongoing premiums that FHA borrowers pay indefinitely, saving hundreds monthly on typical Temple City purchases.
VA allows debt ratios above 50% when compensating factors justify it. Lenders also accept lower credit scores than conventional programs, though most want 620 minimum.
Down payment splits these programs cleanly. FHA needs 3.5% while VA requires nothing from eligible borrowers, a $20,000+ difference on Temple City median-priced homes.
Mortgage insurance costs diverge sharply over time. FHA charges 0.55%-0.85% annually for the loan's life, while VA's one-time funding fee eliminates ongoing premiums entirely.
Eligibility creates the hard boundary. VA beats FHA on nearly every financial metric, but only military-connected borrowers qualify for VA benefits.
If you qualify for VA, use it. The zero-down structure and eliminated mortgage insurance save tens of thousands over typical loan terms compared to FHA.
FHA works when you're not military-eligible but need low down payment options. The 3.5% minimum and flexible credit standards open doors conventional loans keep closed.
Temple City buyers sometimes use FHA for multifamily properties VA won't cover, or when the funding fee exceeds their available cash. But most eligible veterans should default to VA.
Yes, and you should in most cases. VA's zero down and no mortgage insurance save significantly more than FHA over time.
FHA officially accepts 580 scores, while VA lenders typically want 620. Both beat conventional minimums around 640-660.
Rates run similar between programs. VA sometimes edges slightly lower due to government guarantee strength, but differences stay small.
Only with 10%+ down on shorter terms. Most Temple City FHA borrowers pay insurance for the full loan life regardless.
Both have closing costs, but VA limits what lenders can charge. Sellers can also pay all VA buyer costs in negotiations.