California VA Loan Information You Need To Know!
A California VA loan is a special type of loan for those who are currently serving or have served in the US military. The Department of Veterans Affairs (VA) backs this loan. It is important to understand that VA does not provide the funding for the loan; rather, they back loans that veterans, active military personnel, and military spouses who qualify get from mortgage lenders.
California VA loans are categorized into three different types: interest rate reduction refinance loans (known as IRRRL), purchase loans, and cash-out refinance loans. VA loans carry many advantages but the main benefit is the ability to put 0% as a down payment. This makes owning a home for veterans and active military much more possible in cases where it would otherwise be difficult.
VA Loan Eligibility
A VA loan is available to veterans, military personnel and military spouses and families. A clear list includes the following:
- Active military
- National Guard members
- Reserve members
- Widows of Veterans
To qualify for a California VA loan, your credit must be suitable. You should have a valid Certificate of Eligibility, DD-214, and sufficient income. The home in question should be used for personal occupancy also know as a primary residence. The Department of Veterans Affairs website has a clear list of requirements that you have to meet to be eligible.
Benefits Of VA Loans
VA loans are flexible and attractive and are aimed at veterans, military personnel, and their families. A VA loan also has other benefits not found in other loans. Here are a few of the advantages:
- There is no need for a down payment for most VA loans
- Interest rates are competitive
- VA funding fee finance ability. The funding fee is reduced with a down payment of at least 5% with veterans in the VA compensation program exempted.
- There is a limitation of the closing cost charges
- The closing cost might be lower than other financing methods and may be paid by the seller.
- There is no need for private mortgage insurance premiums.
- A VA loan is an Assumable mortgage
- There are no prepayment penalties
- If VA inspected your home when being constructed, there will be a warranty from the builder and you will get help when obtaining the builder’s cooperation.
- Veterans faced with temporary financial difficulty get VA assistance.
How To Get A California VA Loan
To get the loan, you must:
- Ensure you are eligible for this type of loan. You can easily check for eligibility at the VA website
- Find lenders participating in the VA loan program.
- Get the Certificate of Eligibility from Veterans Affairs showing you are eligible for the loan. Some lenders can request the certificate for you.
- Start the application process. The Lender will also help you through the process of financing your home.
How Big Can The Loan Be?
There is no maximum limit a veteran can borrow. This is according to VA guidelines. However, the county you are in determines the limits in the calculations. In short, you do not have a limit on the maximum loan you can get, but the VA has limits on the liability it assumes. This is what affects the amount of money you will be getting from a lender.
In most cases, eligible military personnel or veterans can get a loan of up to $424,100 without a down payment. However, in some higher cost counties this number can be higher .However, there are counties where the loan can go as high as $636,150. The most important thing is to check the county limits in California to find out your county maximum loan limit.
What About Credit?
A VA loan will follow have similar qualification requirements as conventional and FHA loans however VA is more flexible on credit scores and past derogatory credit. The determination of getting a mortgage will still depend on the criteria set forth by the lender you choose to work with.
What Can VA Loans Buy?
With a VA loan, you can buy a condominium, townhouse or a house you want to occupy. The home can be one you are currently occupying or one that you probably want to build. If eligible, it is possible to refinance your current loan through the VA.Also, you can benefit from improvements funded by the VA loan. This includes qualified improvements such as doors, storm windows, pool and landscaping, and energy-efficient features and insulation among other items.
Finding A VA Lender
First of all, finding out if you are eligible for VA loan in California is important. As mentioned, most veterans, military personnel and some of the military spouses can also access this loan. There are many lenders but is important to choose one that has more benefits. You can get recommendations from family or friends but it’s a good idea to choose a lender near you or near the area you want to buy or build a home. This is because they understand the requirements and the local market better.
If you are military personnel, a veteran or a qualified military spouse in California, you should take advantage of the VA loan. As indicated, the loan has a lot of benefits over conventional loan and is an easier option to make your dream of owning a home come true .