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in Morgan Hill, CA
Morgan Hill buyers with military service face a key choice: use VA benefits or go conventional. Each loan works differently for Santa Clara County's competitive market.
VA loans eliminate down payments and mortgage insurance. Conventional loans offer flexibility but require 3-20% down and PMI below 20% equity.
As of February 2026, rates hover near four-year lows at 6% for both programs. The real difference shows up in upfront costs and long-term savings.
Conventional loans are available to any qualified borrower regardless of military status. Rates vary by borrower profile and market conditions.
You need 620+ credit and stable income. Put down 20% to skip PMI, or pay monthly insurance with 3-5% down until you hit 20% equity.
These loans cap at conforming limits—$832,750 in Santa Clara County for 2026. Above that, you enter jumbo territory with stricter requirements.
VA loans serve veterans, active military, and qualifying spouses with zero down payment. No mortgage insurance ever, regardless of equity.
You pay a funding fee (1.25-3.3% of loan amount) unless exempt for disability. This fee rolls into the loan—no cash required at closing.
Santa Clara County VA limits match conventional at $832,750. Credit requirements are flexible; most lenders approve 580+ scores with strong compensating factors.
Local decision guide
Use this comparison to weigh Conventional Loans and VA Loans through local payment fit, eligibility, documentation, and timing before choosing a path in Morgan Hill.
Morgan Hill buyers with military service face a key choice: use VA benefits or go conventional. Each loan works differently for Santa Clara County's competitive market.
VA loans eliminate down payments and mortgage insurance. Conventional loans offer flexibility but require 3-20% down and PMI below 20% equity.
As of February 2026, rates hover near four-year lows at 6% for both programs. The real difference shows up in upfront costs and long-term savings.
Down payment separates these programs most. VA requires nothing; conventional demands 3-20%. On a $700,000 Morgan Hill home, that's $0 versus $21,000-$140,000 upfront.
Monthly costs differ too. VA skips mortgage insurance entirely. Conventional adds $200-$400/month in PMI on a $700,000 purchase with 5% down.
VA charges a one-time funding fee—$8,750 on that $700,000 loan for first-time users. Conventional spreads PMI across years until you refinance or hit 20% equity.
Use VA if you qualify—period. The zero-down, no-PMI structure beats conventional on cost in nearly every scenario for Morgan Hill buyers.
Conventional makes sense in three cases: you're not VA-eligible, you're buying above $832,750, or you have 20%+ down and want maximum lender options.
Santa Clara County prices favor VA's leverage. Saving $50,000 in down payment money while skipping $300/month in PMI creates real wealth-building headroom.
Yes, VA loans are reusable. You restore full entitlement after selling, or use remaining entitlement for a second property.
No. VA rates match or beat conventional because the government guarantee reduces lender risk. Rates vary by borrower profile and market conditions.
Minimum 620, but 680+ unlocks better rates. Strong income and low debt-to-income help with borderline credit.
Only through lender-paid PMI, which trades higher rates for no monthly insurance. You still pay—just differently.
Rarely. Even with the 1.25-3.3% fee, VA's lack of ongoing PMI saves more over the loan life.
Both take 30-45 days typically. VA appraisals add a few days, but the difference is minimal with experienced lenders.