Question 1

Can veterans use conventional loans instead of VA loans?

Accepted Answer

Yes, veterans can choose conventional financing if they prefer. Some opt for conventional when making large down payments or purchasing investment properties where VA benefits don't apply.

Question 2

How does the VA funding fee compare to PMI costs?

Accepted Answer

The VA funding fee is typically 2.3% paid once upfront. PMI costs roughly 0.5-1% annually until you reach 20% equity, often totaling more over several years.

Question 3

Do both loan types work for condos in San Luis Obispo?

Accepted Answer

Both accept condos, but VA loans require the complex to be VA-approved. Conventional loans have broader condo acceptance throughout San Luis Obispo.

Question 4

What credit score do I need for each option?

Accepted Answer

Conventional loans typically require 620 minimum, with better rates at 740+. VA loans often accept scores in the high 500s, though individual lenders set their own minimums.

Question 5

Can I avoid the VA funding fee?

Accepted Answer

Veterans with service-connected disabilities are exempt from the funding fee. Others must pay it, though subsequent VA loans have lower fees for repeat users.

Conventional vs VA Loans in San Luis Obispo: Which Mortgage Fits Your Needs?