California Military Home Loans: Why the VA Program Is Hard to Beat

Are you planning to buy a home in California? Are you a member of the U.S. military, or a veteran? If so, you should take a close look at the California military home loans available through the Department of Veterans Affairs.

With zero down payment, no mortgage insurance, and flexible underwriting criteria, the VA loan program for military members is hard to beat. And you’ll soon see why.

Advantages of California Military Home Loans

The U.S. Department of Veterans Affairs (VA) home loan program has been around for decades. It was first launched in the 1940s, mainly to benefit servicemembers returning from World War II. Since then, this unique program has helped millions of borrowers purchase homes.

Here are the five biggest benefits of using a California military home loan to buy a house:

1. No down payment required. This is the biggest benefit of using a VA loan when purchasing a house. Eligible borrowers who use this program can buy a home with no down payment whatsoever. This reduces the amount of money you have to save, and allows you to purchase a property sooner. This is one of the few mortgage programs that offers 100% financing. And in a pricey real estate market like California, that’s a pretty big deal.

2. No mortgage insurance. Typically, when a borrower takes on a mortgage loan that covers most or all of the purchase price, mortgage insurance is required. This increases the size of the borrower’s monthly payments, as well as the total amount of money paid over time. But mortgage insurance is usually not required for California VA military home loans. This is a key money-saving benefit to using the VA program when buying a house.

3. Limit on closing costs. The Department of Veterans Affairs limits the amount of fees lenders can charge borrowers who use VA home loans. This is another money-saving feature that benefits you, as the borrower. Additionally, the Department allows sellers to contribute money toward the buyer’s closing costs. This gives you more flexibility when negotiating the terms of the sale, and could further reduce your out-of-pocket expense.

4. Competitive mortgage rates. California military home loans are backed by the federal government. As a result of this, lenders are often willing to offer lower rates for VA loans, compared to conventional mortgage products. Of course, the rate you receive will partly depend on your credit score and other factors. But in general, VA borrowers commonly end up with great rates. (Note: You can get a rate quote here.)

5. Flexible credit standards. Because of the government backing mentioned earlier, military home loans offer some of the most flexible underwriting guidelines. This means you don’t need perfect credit to qualify for financing. Chalk up another advantage to using a VA-guaranteed mortgage loan.

To recap, here are the five biggest benefits of using a California military home loan:

• You could finance the full purchase amount with no down payment.
• You could avoid paying mortgage insurance, which is usually required with low down payments.
• There are limits to the amount of closing costs you pay, and the seller is allowed to contribute to those costs.
• You might qualify for a lower mortgage rate, when compared to conventional financing.
• The underwriting and qualification criteria are generally more flexible.
• Learn more in our VA loan library.