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in Lodi, CA
Lodi buyers often compare Conventional and VA loans because the difference in upfront cash can exceed $60,000 on a typical home. VA loans eliminate down payment requirements for eligible veterans while Conventional loans demand at least 3% down.
The choice depends on whether you qualify for VA benefits and how much cash you want to keep in reserve. Both loan types work well in San Joaquin County, but the savings structure differs sharply.
Conventional loans work for anyone with decent credit and stable income. You need a 620 minimum credit score for most programs, though 740+ unlocks the best rates.
Put down less than 20% and you'll pay PMI until you hit 20% equity. Most Lodi buyers put down 5-10% initially. Loan limits go up to $806,500 in San Joaquin County for 2024, covering most local inventory.
VA loans require zero down payment and charge no PMI ever. You pay a funding fee instead—typically 2.15% for first-time VA users—which rolls into the loan amount.
You must be an eligible veteran, active-duty service member, or qualifying spouse with a valid Certificate of Eligibility. Credit requirements are more flexible than Conventional loans, with most lenders accepting 580-600 scores.
The down payment gap is the biggest difference. On a $500,000 Lodi home, Conventional requires $25,000 down at 5% while VA needs zero. But VA charges a $10,750 funding fee that adds to your loan balance.
VA loans skip PMI entirely, saving $200-300 monthly on that same purchase. Conventional buyers pay PMI until they refinance or reach 20% equity through payments and appreciation. VA also allows higher debt-to-income ratios, often approving buyers Conventional lenders reject.
Choose VA if you qualify—the zero-down structure and no PMI usually beat Conventional math. Even with the funding fee, you keep more cash for repairs, furniture, and reserves.
Use Conventional if you're not VA-eligible or buying an investment property. It's also the better choice if you have 20% down ready, since you avoid both PMI and VA funding fees. Some Lodi sellers prefer Conventional offers because VA appraisals are stricter on property condition.
VA appraisers flag safety issues like peeling paint or faulty wiring. The property must be move-in ready, which eliminates most fixers.
Conventional typically closes 2-5 days faster. VA requires the Certificate of Eligibility and a VA-specific appraisal, adding processing time.
Still use VA—keep your cash for reserves. The funding fee is lower than PMI costs over time, and you preserve liquidity for emergencies.
Veterans with service-connected disabilities are exempt. Otherwise, the fee applies but can be financed into the loan rather than paid upfront.
VA rates run 0.25-0.5% lower than Conventional on average. Rates vary by borrower profile and market conditions, but VA typically wins.