Veterans seeking to purchase a home in San Diego County are encouraged to get pre-approved for a San Diego VA loan before 2013. With the passage of the Honoring America’s Veterans and Caring for Camp Lejeune Families Act, qualified veterans can receive guaranteed San Diego VA home loans as high as $518,750, up from the previous San Diego VA loan limit of $477,000.
The increased loan limits will apply to all San Diego VA loans closed before January 1, 2013. The VA is expected to adjust this limit after this period when it receives new median home price data from the Federal Housing Finance Agency.
The next few months present an unparalleled opportunity for you to take advantage of San Diego mortgage rates as low as 3.25% for a 30 year loan, 3.305% APR. Fifteen year rates are presently as low as 2.75%, 2.849% APR for qualified borrowers.
A VA loan is an assumable loan, so if you wish to sell your home to another qualified veteran, they may be able to take responsibility for your mortgage. If you wish to prepay your San Diego VA loan you may do so without a penalty.
Even if the loan limit is decreased in the next year, the VA will continue to honor the higher loan limit if the pre-approval was based on a sales contract or Uniform Residential Loan Application (URLA).
No down payment or mortgage insurance is required
VA loans require no down payment up to $518,750 in San Diego. Closing costs, origination fees, and appraisal fees are strictly controlled by law. If the real estate contract is structured appropriately, the closing costs may be completely paid for by the seller. The VA also makes available methods to assist you should you have difficulty making payments in the future.
The San Diego VA Loan Program does not require mortgage insurance, in contrast with San Diego FHA or conventional loans. Because the VA guarantees the loan, third party mortgage insurance is not required. This may save you hundreds a month on mortgage insurance premiums.
There is a variable VA funding fee which may be lowered if the down payment is 5% of the loan or more. A typical funding fee for an Active Military first time buyer is 2.15% of the loan amount, and this amount may also be financed. For reservists or subsequent use this funding fee will be higher.
Most active duty personnel, veterans and reservists are qualified
If you have served in the military, are an active duty member, a Reservist or National Guard member, or a surviving spouse, you may qualify for a San Diego VA loan. An active duty member may qualify after six months of service, while a reservist or National Guard member who has not served on active duty may not qualify until six years of service have passed. Reservists or National Guard members with 181 days or more of active service may meet all requirements for the San Diego VA Loan Program.
In order to receive a San Diego VA loan, you will need to obtain a Certificate of Eligibility (CoE) from the U.S. Department of Veterans Affairs. You should submit an application online, through the mail, or through your home loan lender.
Loan applications will require credit and income verification
The U.S. Department of Veterans Affairs does not provide the loans. Instead, the VA guarantees that the loans will be repaid to the lender, so you will still need to apply and secure a loan from a bank or San Diego mortgage broker like The Mortgage Planners.
Although the VA does not use your credit score to determine eligibility, your credit history will affect your application in other ways. The lender will examine your credit activity in the past 12 months to determine if you are up to date on your financial responsibilities. In most cases, a decent credit history in the past year will permit approval. A higher credit score may also allow a lower rate on your mortgage.
The San Diego VA Loan Program will require proof of employment going back at least two years. Your income will be analyzed to determine if your income can support repayment and if you are likely to remain employed through the first three years of the mortgage.
Loans exceeding the VA loan limit only require 25% of the excess loan amount
If you would like to purchase a property that exceeds the $518,750 limit set by the San Diego VA Loan Program, you can still receive a guarantee on the loan up to the limit. The amount of loan above that limit will require a 25% down payment. For example, if your desired home costs $618,750, then you will need to make a down payment of only 25% of the excess loan amount which is $25,000.
If you are planning on purchasing a home in San Diego County and you are eligible for a VA loan, we encouraged you to discuss your options with us. As a trusted San Diego mortgage broker, we offer a free pre-purchase consultation were we can discuss all your options and if a VA loan is right for you. You can call me at (619) 312-0612 to schedule a meeting or apply for a interest rate quote at the top right of the page.