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in San Bruno, CA
San Bruno homebuyers often weigh conventional financing against VA loans when planning their purchase. Both options serve different needs, with conventional loans offering broad accessibility and VA loans providing unique benefits for military-connected buyers.
Understanding the core differences helps you choose the path that aligns with your financial situation and eligibility. Your choice affects down payment requirements, ongoing costs, and long-term payment structures.
Conventional loans represent traditional financing not backed by government agencies. They typically require 3-20% down depending on your loan-to-value ratio and whether you're a first-time buyer.
These mortgages work for primary residences, second homes, and investment properties throughout San Mateo County. Lenders evaluate credit, income, and assets using standard underwriting guidelines.
Private mortgage insurance applies when you put down less than 20%, but you can remove it once you reach sufficient equity. This flexibility appeals to buyers who plan to build equity quickly.
VA loans serve eligible veterans, active-duty service members, and qualifying surviving spouses with government-backed financing. The Department of Veterans Affairs guarantees a portion of each loan, reducing lender risk.
The zero down payment feature stands out as a major advantage for military-connected San Bruno buyers. You can finance 100% of the purchase price without private mortgage insurance requirements.
A one-time funding fee applies instead of ongoing PMI, and this fee can be rolled into your loan amount. VA loans limit closing costs that sellers can charge, providing additional savings at purchase.
Down payment separates these options dramatically. Conventional loans typically need 3-20% upfront, while VA loans allow zero down for eligible borrowers. This difference can mean $30,000-$50,000+ in initial cash requirements on a typical San Bruno home.
Mortgage insurance structures differ completely between programs. Conventional loans require PMI until you hit 20% equity, adding $100-300+ monthly. VA loans charge a one-time funding fee but never require monthly mortgage insurance.
Eligibility creates the clearest distinction. Anyone meeting credit and income standards qualifies for conventional financing. VA loans exclusively serve military-connected individuals with qualifying service records or spousal status.
Rates vary by borrower profile and market conditions, though VA loans often provide slight rate advantages due to government backing. Both programs offer competitive pricing for qualified applicants.
Choose VA financing if you qualify through military service and want to minimize upfront costs. The zero down payment and no PMI combination provides powerful savings, especially when buying in San Mateo County's competitive market.
Conventional loans make sense when you don't qualify for VA benefits or need financing for property types VA loans don't cover. They also work well if you have substantial savings for a larger down payment to avoid PMI entirely.
Your timeline matters too. VA loans involve additional certification requirements that can extend closing timelines slightly. Conventional financing sometimes moves faster when competing against other offers.
Consider working with a mortgage broker familiar with both programs in San Bruno. They can calculate exact costs for your situation and help you understand which option saves you the most money over time.
VA loans work for primary residences that meet property condition standards. You cannot use VA financing for investment properties or second homes, while conventional loans allow both.
VA loans charge no monthly PMI, saving $100-300+ monthly compared to conventional loans under 20% down. You pay a one-time funding fee instead, typically 2.3% for first-time users with zero down.
Conventional loans typically require 620+ credit scores, with better rates at 740+. VA loans accept scores as low as 580-620 depending on the lender, offering more flexibility for military buyers.
Sellers can choose any offer they prefer. Some worry about VA appraisal requirements or repairs, but knowledgeable agents help position VA offers competitively in San Mateo County.
Conventional loans often close 3-5 days faster since they skip VA property certification steps. Typical timelines run 30-35 days for conventional and 35-40 days for VA financing.