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in National City, CA
National City sits right next to Naval Base San Diego, which means we see more VA loan applications here than almost anywhere else in the county. Both conventional and VA loans get deals closed, but the math changes completely when you qualify for military benefits.
The right choice depends on whether you've served and how much cash you have for a down payment. VA loans give veterans buying power that conventional loans can't match.
Conventional loans work for anyone with decent credit and stable income. You need at least 3% down, and if you put down less than 20%, you'll pay private mortgage insurance until you hit 20% equity.
These loans max out at $806,500 in San Diego County for 2024. Credit score minimums start at 620, but you'll get better rates with 700+. Income verification is straightforward if you're W-2.
VA loans let eligible veterans and active-duty service members buy with zero down payment. No PMI ever, regardless of down payment size. You pay a one-time funding fee instead, which can be rolled into the loan.
The VA guarantees part of the loan, so lenders accept lower credit scores and higher debt ratios than conventional. You still need to prove income and meet basic credit standards, but the bar is lower.
Down payment separates these loans first. Conventional demands 3-20% upfront. VA asks for nothing. On a $600,000 National City home, that's $18,000 minimum versus zero.
Monthly costs differ too. Conventional loans under 20% down carry PMI around $150-300 monthly. VA loans never have PMI, though you pay a 2.15% funding fee upfront for zero down. Rates vary by borrower profile and market conditions, but VA rates often beat conventional by 0.25-0.50%.
If you qualify for VA benefits, use them. The zero down and no PMI combination saves tens of thousands over the loan life. The only reason to pick conventional is if you're buying above VA limits or want a second home.
Non-veterans should explore conventional with 5-10% down if possible. You'll build equity faster and potentially drop PMI within a few years. In National City's market, even 5% down gives you negotiating room sellers respect.
Yes, but it rarely makes sense. You'd give up zero down payment and no PMI for no real benefit unless buying above VA limits or as investment property.
For first-time VA buyers with zero down, it's 2.15% of the loan amount. On a $600,000 loan, that's $12,900, which rolls into your mortgage balance.
Not anymore. Both typically close in 30-40 days. VA appraisals sometimes take an extra week, but that's the only potential delay.
Not through traditional means. Some lenders offer lender-paid PMI with slightly higher rates, but you still pay indirectly.
Sellers treat both equally if you're pre-approved. VA's zero down doesn't scare sellers like it did years ago since these loans close reliably.
Yes, your entitlement restores after you sell and pay off the previous VA loan. Some veterans even use partial entitlement for second VA loans simultaneously.