One of the best financing instruments for purchasing a home in the San Diego area is a Veterans Administration loan. There are four different ways you can qualify for a VA loan:
- Served 90 consecutive days of active service during wartime.
- Served 181 days of active service during peacetime.
- If you have more than 6 years of service in the National Guard or Reserves.
- You are the spouse of a service member who has died in the line of duty or as a result of a service-related disability.
If you qualify, here are some of the benefits of securing a VA Home loan:
No Down Payment Required
With the VA Loan, qualified borrowers can finance 100 percent of the home’s value without putting down a single dollar.
No Private Mortgage Insurance Required
Unlike conventional bank loans where the buyer puts down less than 20%, VA loans do not require insurance payments (PMI) to be added to the mortgage payment each month.
Better Interest Rates
VA loans are guaranteed by the Federal Government. Banks, therefore, have less risk and can offer slightly lower interest rates than on conventional loans.
Securing A VA Loan in the San Diego Area
Houses in San Diego are expensive. The area remains a hot spot in the national real estate market with an average listing price for homes of $599,000 and an average selling price of $475,000.
The latest maximum VA loan limit is $580,750. That places the loan limit below the average listing price for homes in the San Diego area but above the average selling price.
Real estate transactions can be tricky for anyone, especially for first-time buyers or buyers trying to secure a VA loan for the first time. Because of this, it is strongly recommended that buyers secure the services of a qualified VA loan expert.
Before you start shopping for that expert, however, you should check your income level to see if you qualify for a home loan of any kind. Current figures show that to secure a home mortgage of $554,300, the buyer needs a yearly income of $104,486.
The need for that level of income can be reduced by purchasing a home at the lower end of the listing scale, of course, especially if you can secure a VA loan at a minimum interest rate and zero down payment.
If your income meets the criteria needed to secure a maximum VA loan in the San Diego area, you can begin looking at houses in the $550,000 range with your agent.
Since San Diego appears to still be in somewhat of a seller’s market, your chances of low-balling a VA offer are probably slim to none. Many sellers don’t want to deal with VA offers because of the most stringent home inspections required and extra closing costs the seller must absorb.
On the other hand, VA buyers come in pre-qualified with a maximum loan number already guaranteed. And with an experienced agent who deals in VA transactions presenting the offer for you, chances are you should be able to find that perfect San Diego home using a VA loan.