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in Citrus Heights, CA
Citrus Heights homebuyers often choose between conventional and VA loans when financing their purchase. Both options serve different borrower profiles and come with distinct advantages in Sacramento County's housing market.
Conventional loans offer flexibility for civilian buyers, while VA loans provide unmatched benefits for military families. Understanding the core differences helps you select the right financing path for your Citrus Heights property.
Conventional loans represent traditional mortgage financing not backed by government agencies. These mortgages typically require a credit score of 620 or higher and down payments ranging from 3% to 20% of the purchase price.
Borrowers who put down less than 20% pay private mortgage insurance until they reach 20% equity. Conventional loans work well for buyers with strong credit profiles and stable income documentation who may not qualify for government-backed programs.
This loan type offers flexibility in property types and allows you to finance investment properties or second homes. Rates vary by borrower profile and market conditions, with better terms available for higher credit scores and larger down payments.
VA loans provide government-guaranteed mortgages exclusively for eligible veterans, active-duty service members, and qualifying surviving spouses. The standout feature is zero down payment required, making homeownership immediately accessible to those who served.
These loans come with no monthly mortgage insurance requirement, resulting in lower monthly payments compared to conventional financing. VA loans also feature competitive interest rates and more lenient credit requirements than conventional options.
Borrowers pay a one-time VA funding fee that can be rolled into the loan amount. The program limits exist, but in Sacramento County, they're generous enough to cover most Citrus Heights properties. You must obtain a Certificate of Eligibility and use the property as your primary residence.
The most significant difference lies in eligibility: anyone can apply for conventional loans, while VA loans require military service credentials. Down payment requirements separate these options dramatically, with conventional loans needing 3-20% versus VA's zero requirement.
Monthly costs differ substantially due to mortgage insurance. Conventional borrowers with less than 20% down pay PMI monthly, while VA borrowers never pay mortgage insurance despite zero down payment. This creates meaningful savings over the loan's lifetime.
Property use restrictions also vary. Conventional loans finance primary homes, second homes, and investment properties throughout Citrus Heights. VA loans strictly require primary residence occupancy, limiting their use for investors or vacation properties.
VA loans make the most sense for eligible military members purchasing a primary residence in Citrus Heights. The combination of zero down payment and no mortgage insurance creates powerful savings that conventional loans cannot match for qualified borrowers.
Conventional loans serve civilian buyers, those purchasing investment properties, or anyone needing financing flexibility beyond primary residence requirements. If you have a strong credit profile and substantial down payment saved, conventional terms can be highly competitive.
Your decision ultimately depends on eligibility first, then property purpose. Eligible veterans buying a primary home should strongly consider VA benefits. Non-military buyers or those purchasing investment properties will use conventional financing by necessity or strategic choice.
Yes, eligible veterans can use conventional financing if they prefer. However, VA loans typically offer better terms with zero down payment and no mortgage insurance, making them the more advantageous choice for primary residence purchases.
VA loans and conventional loans generally close in similar timeframes, typically 30-45 days. VA appraisals include additional property requirements, but experienced lenders process both loan types efficiently.
No, VA loans require the property to be your primary residence. You must certify occupancy intent and live there within a reasonable time after closing. Second homes or investment properties require conventional financing.
Conventional loans typically require minimum credit scores around 620, with better rates at 740+. VA loans have no official minimum, though most lenders prefer 580-620. Requirements vary by borrower profile and market conditions.
No, PMI on conventional loans cancels automatically at 78% loan-to-value ratio or can be removed at 80% upon request. VA loans never require mortgage insurance regardless of down payment amount.