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in San Anselmo, CA
San Anselmo buyers often face a choice between conventional financing and VA loans if they qualify for veteran benefits. Both get deals done in Marin County, but they differ sharply on down payment, funding fees, and property standards.
Conventional loans dominate the market because they work for anyone with decent credit and savings. VA loans eliminate down payment requirements for eligible veterans, which matters in a high-cost area like San Anselmo.
Conventional loans are standard mortgages backed by private lenders, not government agencies. They require credit scores typically above 620 and down payments starting at 3% for first-time buyers, though 20% down avoids mortgage insurance.
These loans work on any property type that meets basic appraisal standards. Lenders price them based on credit score, down payment size, and debt-to-income ratio. Rates vary by borrower profile and market conditions.
You pay private mortgage insurance if you put down less than 20%, but you can cancel it once you hit 20% equity. Loan limits for Marin County are higher than standard conforming limits due to the area's housing costs.
VA loans are government-guaranteed mortgages available to veterans, active-duty service members, and qualifying surviving spouses. The defining feature is zero down payment required on purchase prices up to the county loan limit.
You pay a funding fee instead of mortgage insurance, typically 2.3% for first-time use with no down payment. That fee drops to 1.65% with 5% down or 1.4% with 10% down. Veterans with service-connected disabilities pay no funding fee.
VA appraisers enforce stricter property standards than conventional loans. The home must meet minimum property requirements, which can kill deals on fixer-uppers. No prepayment penalties exist, and you can reuse the benefit after paying off the loan.
Down payment separates these loans most clearly. Conventional requires at least 3%, VA requires nothing for eligible borrowers. That difference means $30,000 saved on a $1 million San Anselmo home.
Ongoing costs differ too. Conventional loans charge monthly mortgage insurance under 20% down. VA loans charge an upfront funding fee you can roll into the loan balance, then no monthly MI regardless of down payment.
Property standards matter more with VA financing. Conventional appraisers check value and basic safety. VA appraisers enforce minimum property requirements that flag issues like peeling paint, missing handrails, or defective flooring.
Credit flexibility favors VA loans slightly. Most VA lenders accept 580-600 credit scores. Conventional loans start at 620 but price more aggressively below 680. Rates vary by borrower profile and market conditions.
Use your VA benefit if you qualify and the San Anselmo property meets minimum property requirements. Zero down payment beats saving $30,000-$60,000 in a market where median prices run high. The funding fee costs less than years of mortgage insurance on a low-down conventional loan.
Go conventional if you're buying a fixer-upper that won't pass VA inspection standards. Also choose conventional if you're not eligible for VA benefits or if you want to preserve your VA entitlement for a future purchase.
Run the numbers on funding fee versus mortgage insurance for your specific situation. A veteran putting 10% down pays 1.4% funding fee once. A conventional borrower pays PMI monthly until hitting 20% equity, which takes years.
No. VA appraisers enforce minimum property requirements that reject homes with safety issues, deferred maintenance, or incomplete repairs. Fixer-uppers often fail VA inspection.
VA typically costs less for zero-down scenarios because you avoid monthly mortgage insurance. Conventional becomes competitive at 10-20% down when PMI drops or disappears.
Not materially. VA appraisals add 3-5 days versus conventional, but the difference rarely affects closing timelines in practice.
No. The funding fee is paid once at closing and cannot be cancelled. PMI on conventional loans cancels when you reach 20% equity.
VA loans accept scores as low as 580-600. Conventional starts at 620 but prices more competitively above 680. Rates vary by borrower profile and market conditions.