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in San Francisco, CA
San Francisco homebuyers have many financing options to choose from. Conventional and VA loans are two popular choices, each with unique benefits.
Understanding the differences helps you make the right decision. Your eligibility, down payment ability, and financial goals all matter when choosing between these loan types.
Conventional loans are traditional mortgages not backed by government agencies. They offer flexible terms and competitive rates for qualified borrowers with good credit.
These loans typically require a down payment of 3% to 20%. If you put down less than 20%, you'll pay private mortgage insurance until you reach 20% equity.
Rates vary by borrower profile and market conditions. Borrowers with higher credit scores and larger down payments typically secure the best rates.
VA loans are government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses. They require zero down payment, making homeownership more accessible.
These loans don't require monthly mortgage insurance, which saves borrowers money. The VA funding fee helps offset the program cost but can be financed into the loan.
Rates vary by borrower profile and market conditions. VA loans often offer lower rates than conventional options due to government backing.
Eligibility is the biggest difference between these loan types. VA loans require military service connection, while conventional loans are available to any qualified borrower.
Down payment requirements vary significantly. VA loans allow zero down, while conventional loans need at least 3% down from the buyer.
Mortgage insurance works differently for each loan. Conventional loans require PMI with less than 20% down, but VA loans never have monthly mortgage insurance.
The VA funding fee replaces traditional mortgage insurance. This one-time fee ranges from 1.4% to 3.6% based on down payment and military service type.
Choose a VA loan if you're eligible through military service. The zero down payment and no monthly mortgage insurance make VA loans incredibly valuable for qualifying borrowers.
Consider conventional loans if you don't qualify for VA benefits. They offer flexibility and become cost-effective with larger down payments and strong credit scores.
San Francisco's high home prices make down payment requirements crucial. If saving 3% or more is challenging, VA loan eligibility provides significant advantages.
Both loan types can finance homes throughout San Francisco County. Work with an experienced mortgage broker to compare your specific options and rates.
Yes, but the condo building must be VA-approved. Many San Francisco condos are approved, but check the VA's list before making an offer.
Rates vary by borrower profile and market conditions. VA loans often have slightly lower rates due to government backing, but individual rates depend on your credit and finances.
Yes, both loans have closing costs. VA loans allow sellers to pay all buyer closing costs, while conventional loans limit seller contributions.
Veterans with service-connected disabilities are exempt from the VA funding fee. All other eligible borrowers must pay this one-time charge.
Conventional loans typically require 620 or higher. VA loans are more flexible, often accepting scores as low as 580 from some lenders.