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in Gustine, CA
Gustine buyers often qualify for both FHA and VA loans but don't realize how different they are. One requires a down payment and monthly insurance, the other doesn't.
Both programs help borrowers who can't put 20% down, but VA loans deliver better terms if you've served. We'll break down which saves you more money in Merced County.
FHA loans need just 3.5% down if your credit hits 580, making them accessible for first-time buyers in Gustine. You'll pay upfront mortgage insurance at closing plus monthly premiums throughout the loan.
Credit as low as 500 works with 10% down, though most lenders set their own floors higher. Debt-to-income can stretch to 50% with compensating factors, useful for borrowers with student loans or car payments.
VA loans eliminate the down payment entirely for eligible veterans and service members in Gustine. You skip monthly mortgage insurance, which saves hundreds per month compared to FHA.
The VA funding fee replaces traditional mortgage insurance but it's lower and you can roll it into the loan. Veterans with service-connected disabilities pay zero funding fee, making this the cheapest financing available.
The VA loan saves more money long-term because you avoid monthly mortgage insurance that FHA requires. On a $350,000 loan in Gustine, FHA insurance costs about $240 monthly while VA has nothing.
FHA works for anyone who qualifies financially, but VA demands military service. Property standards differ too—VA appraisals flag more issues than FHA, sometimes killing deals on fixer-uppers.
If you're VA-eligible, use it—the monthly savings beat FHA every time unless the property fails VA inspection standards. We see veterans choose FHA only when buying homes that need work the VA won't approve.
Non-veterans in Gustine default to FHA when they can't reach 5% down for conventional loans. The mortgage insurance stings, but it beats renting while saving more money for years.
Yes, VA benefits restore after you sell or pay off the previous VA loan. Many veterans use it multiple times throughout their lives.
VA appraisals flag more items like peeling paint and broken appliances. FHA accepts more properties as-is, making it better for homes needing cosmetic work.
Only if you put 10% or more down—then it drops after 11 years. With 3.5% down, it stays for the life of the loan.
VA has no minimum credit score, but most lenders want 620 or higher. FHA officially accepts 580, making it easier for lower-credit borrowers.
FHA typically closes 3-5 days faster because VA appraisals take longer and scrutinize more property details. Both average 30-40 days total.