Loading
in Los Banos, CA
Los Banos sits in California's Central Valley, where home affordability meets agricultural employment and commuter access to Bay Area jobs. Military families stationed at nearby bases or veterans settling in Merced County have a decision: use VA loan benefits or go conventional.
The choice hinges on down payment capacity and how much you value avoiding mortgage insurance. VA loans eliminate both barriers for eligible borrowers, but conventional loans offer flexibility when VA entitlement is tied up or property types don't qualify.
Conventional loans are the default choice for most borrowers without military service. You need at least 3% down for a primary residence and 620 minimum credit score. Private mortgage insurance applies until you hit 20% equity.
Rates vary by credit tier and down payment size. Stronger credit profiles get better pricing. These loans work for any property type—single-family homes, condos, investment properties—and you can use them repeatedly without restrictions on loan count.
VA loans are guaranteed by the Department of Veterans Affairs for eligible service members, veterans, and surviving spouses. Zero down payment. No monthly mortgage insurance. That's the core advantage—you can finance 100% of the purchase price without PMI eating into your payment.
You pay a one-time VA funding fee instead of ongoing insurance premiums. Credit requirements are flexible, with many lenders approving 580 scores. Property must be owner-occupied and meet VA minimum property requirements, which can disqualify fixer-uppers or rural parcels.
Down payment is the first divergence. VA requires nothing. Conventional requires 3-20%. That changes how much cash you need at closing and whether you can compete with all-cash offers in tight inventory markets.
Mortgage insurance works differently. Conventional charges monthly PMI until 20% equity. VA charges a one-time funding fee—typically 2.3% for first-time zero-down users—but no ongoing premium. VA also caps seller concessions at 4%, while conventional allows up to 9% depending on down payment size.
Use VA if you're eligible and buying a primary residence that meets property standards. You save thousands by avoiding down payment and PMI, and rates are often better than conventional pricing. The funding fee is financed into the loan, so upfront costs stay minimal.
Go conventional if you're not eligible for VA benefits, buying an investment property, or the home doesn't meet VA appraisal requirements. You'll also choose conventional if your VA entitlement is already in use on another property and you don't want to refinance or sell first.
Yes, VA loans work anywhere in California including Los Banos. The property must meet VA minimum property requirements and be your primary residence.
PMI is required when you put down less than 20% on a conventional loan. It drops off automatically once you reach 22% equity based on the original value.
VA loans typically have lower monthly payments because there's no mortgage insurance. Rates vary by borrower profile and market conditions.
Yes, conventional loans allow 3% down for primary residences. You'll pay PMI until you reach 20% equity through payments or appreciation.
First-time VA users pay 2.3% with zero down or 1.65% with 5% down. The fee is financed into the loan and varies based on service type and down payment.
No. Conventional loans typically require 620 minimum credit, while VA lenders often approve 580 scores. Higher credit gets better rates on both programs.