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in Burlingame, CA
Burlingame homebuyers often choose government-backed mortgages for their favorable terms and accessibility. Both FHA and VA loans offer advantages over conventional financing, but they serve different borrower groups with distinct requirements.
Understanding the key differences helps you select the right path for your San Mateo County home purchase. Each program has unique benefits that can make homeownership more affordable depending on your situation.
FHA loans from the Federal Housing Administration require as little as 3.5% down for qualified borrowers. These mortgages accept credit scores as low as 580 with the minimum down payment, making them accessible to first-time buyers and those rebuilding credit.
Mortgage insurance premiums apply for the life of most FHA loans unless you refinance. The upfront premium is 1.75% of the loan amount, with annual premiums ranging from 0.45% to 1.05% depending on loan terms and down payment size.
Burlingame buyers appreciate FHA's flexibility with debt-to-income ratios up to 50% in some cases. Rates vary by borrower profile and market conditions, but FHA terms remain competitive for those who qualify.
VA loans offer zero down payment financing for eligible veterans, active-duty service members, and qualifying surviving spouses. This benefit eliminates the largest barrier to homeownership in San Mateo County's competitive market.
No monthly mortgage insurance exists with VA loans, a significant advantage over FHA financing. Borrowers pay a one-time funding fee ranging from 1.4% to 3.6% of the loan amount, which can be financed into the mortgage.
The VA guarantees a portion of each loan, allowing lenders to offer competitive rates without requiring perfect credit. Qualification focuses on stable income and acceptable payment history rather than strict credit score cutoffs.
Eligibility separates these programs most clearly. FHA loans serve anyone who meets credit and income requirements, while VA loans require military service credentials through the Certificate of Eligibility process.
Down payment requirements differ substantially. FHA requires at least 3.5% down, while VA allows 100% financing for eligible borrowers. This difference can mean tens of thousands of dollars in Burlingame's housing market.
Mortgage insurance structures vary between programs. FHA charges both upfront and ongoing premiums that typically last the loan's life. VA charges a one-time funding fee with no monthly insurance, reducing long-term costs for eligible veterans.
Property standards under VA appraisals can be stricter than FHA requirements. Both programs mandate safe, habitable homes, but VA inspectors may flag issues that wouldn't prevent FHA approval.
Choose VA financing if you qualify through military service. The zero down payment and absence of monthly mortgage insurance create substantial savings over time, particularly on higher-priced Burlingame properties.
FHA makes sense for buyers without VA eligibility who need flexible credit standards. The low down payment requirement opens doors for first-time buyers, though ongoing insurance costs reduce monthly payment advantages.
Some veterans with substantial savings still choose FHA for specific property types or situations. A mortgage professional can compare actual costs based on your credit profile, down payment capacity, and the specific home you're purchasing.
You cannot combine programs on one property. However, VA loan entitlement can be reused after selling your previous VA-financed home, while FHA allows one primary residence loan at a time with limited exceptions.
Rates vary by borrower profile and market conditions. VA rates often edge slightly lower due to the government guarantee, but your specific credit, down payment, and lender choice matter more than program type alone.
Strong offers with solid financing win in any market. Both FHA and VA are widely accepted, though some sellers prefer conventional financing in competitive situations due to perceived smoother transactions.
Yes, eligible veterans can refinance FHA loans into VA loans through a VA Cash-Out or Rate Reduction refinance. You can also refinance VA loans to FHA if that serves your financial goals better.
FHA loan limits apply in San Mateo County, capping borrowing amounts. VA loans have no maximum for qualified veterans with full entitlement, though lenders may impose their own limits based on income and creditworthiness.