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in Folsom, CA
Folsom homebuyers have strong options when choosing between Conventional and VA loans. Each program offers distinct advantages depending on your service background and financial situation.
Understanding how these two popular mortgage types differ helps you make the right choice for your Folsom home purchase. Both programs serve different borrower profiles with unique benefits and requirements.
Conventional loans represent traditional mortgage financing available to all qualified borrowers in Folsom. These mortgages typically require a down payment of 3-20% and follow lending standards set by Fannie Mae and Freddie Mac.
Borrowers with strong credit scores and stable income often secure competitive rates with Conventional financing. If you put down less than 20%, you'll pay private mortgage insurance until you reach 20% equity.
These loans offer flexibility in property types and loan amounts. Once you build sufficient equity, you can request PMI removal, reducing your monthly payment.
VA loans provide government-guaranteed financing exclusively for eligible veterans, active-duty service members, and qualifying surviving spouses. The program requires zero down payment and charges no monthly mortgage insurance.
The VA funding fee replaces traditional mortgage insurance but can be financed into your loan amount. Rates vary by borrower profile and market conditions, though VA loans often feature competitive terms.
Eligible borrowers can purchase Folsom homes with no money down while avoiding the ongoing cost of mortgage insurance. The VA program also limits closing costs lenders can charge borrowers.
The most significant difference is eligibility: anyone can apply for a Conventional loan, while VA loans require military service or qualifying status. Down payment requirements also diverge dramatically, with VA requiring nothing versus 3-20% for Conventional.
Monthly costs differ substantially. Conventional borrowers pay PMI with less than 20% down, while VA borrowers pay no ongoing mortgage insurance despite zero down payment. The VA funding fee is a one-time cost, not a monthly expense.
Credit requirements tend to be more flexible with VA loans, though both programs reward higher credit scores with better rates. Property requirements also differ, with VA loans requiring specific safety and condition standards.
VA loans make the most sense for eligible veterans and service members purchasing in Folsom. The combination of zero down and no mortgage insurance creates substantial savings over the loan's life.
Conventional loans serve buyers who don't qualify for VA benefits or who prefer the flexibility these mortgages offer. Borrowers with 20% down payment avoid mortgage insurance entirely with Conventional financing.
Your decision should factor in your eligibility, available savings, and long-term plans. SRK Capital helps Folsom buyers evaluate both options to determine which program delivers the best value for your specific situation.
VA loans work for most Folsom homes but require the property to meet VA safety and condition standards. The home must be your primary residence and pass a VA appraisal.
The VA funding fee is typically 2.3% for first-time users with zero down, paid once. Conventional PMI ranges from 0.5-1% annually, paid monthly until you reach 20% equity.
Rates vary by borrower profile and market conditions. Both programs offer competitive rates, with VA loans often slightly lower due to government backing.
Yes, eligible borrowers can refinance a Conventional loan into a VA loan through an IRRRL or cash-out refinance. This strategy works well if you initially used Conventional financing.
Conventional loans accept most condos, while VA loans require the complex to be VA-approved. Many Folsom condo developments meet VA requirements, but verification is essential.