VA loans are a great loan product for eligible veterans and active-duty members, mainly because of the zero down payment option. VA loans also have less stringent lending requirements compared to conventional loan products. To make it easy, we’ve outlined five commonly asked questions about VA loans.
5 Common Questions About VA Loans in California
We’ve created this guide to inform borrowers and veterans alike on some important 2020 updates for VA loans in California.
1. Are All Military Members in California Eligible for VA Loans?
California has the largest military population in the United States according to a March 2020 report from the Department of Defense.
There are thousands of eligible individuals in California who could buy a home with a VA loan. This loan program is available to nearly all current military members and veterans who have served over a certain period. Active duty members are generally eligible after 90 days of continuous service. National Guard and Selected Reserve members are usually eligible after six years of service. Here’s an in-depth guide to VA loan eligibility in California.
2. How Do I Apply for a VA Loan?
For VA loans, the mortgage application is similar to that of a “regular” conventional mortgage loan, with one notable exception. Borrowers who are looking to use their VA entitlement to purchase a home in California must first obtain their Certificate of Eligibility (COE). This is an official document provided by the Department of Veterans Affairs, and it shows mortgage lenders that you’re eligible for the program. Members of the military can request this document online, through the VA’s website, or through their local mortgage lender, like JVM Lending. Feel free to contact us if you need help navigating this process.
3. How Much Can I Borrow With a VA Loan?
Prior to 2020, veterans who wanted to utilize the VA loan program’s zero down payment option were limited to only borrowing a certain amount and were unable to surpass that limit. Every year, new VA loan limits are set in place. These limits represent the maximum loan amount that a veteran could borrow in their area. Borrowing a higher amount would then be considered a “jumbo loan,” which then requires a down payment.
However, as of January 1, 2020, VA loan limits have been eliminated. This means that borrowers who are eligible for a VA loan now have much greater buying power. They’re able to look for homes in higher price brackets and are still able to take advantage of not having to come up with a down payment.
Those considering a VA loan in California should be aware that veterans may still be subject to loan limits if they already have one active VA home loan or have defaulted on a VA loan in the past. In these cases, the loan limits would follow the conforming loan limit in their area. We’ve outlined these limits in this blog. Exceeding this loan limit would constitute the loan a “jumbo loan” and would require a down payment.
4. How Many Times Can I Get A VA Loan in California?
We hear from borrowers, “I’ve used a VA loan to buy a home in the past. Can I use a VA loan again to buy another home in the future?” For many, the answer is yes. The Department of Veterans Affairs refers to this as having your entitlement “restored.” Borrowers can often restore their entitlement to obtain a new VA loan if the original mortgage was paid off or assumed by a “qualified Veteran-transferee” who uses their own entitlement.
5. Are Rates for a VA Loan in California Higher Than Conventional Loans?
The interest rate for a mortgage loan is based on several factors, including the borrower’s credit history. In general VA loans tend to have lower mortgage rates than conventional (non-government-backed) home loans. This is one of the many benefits of using this program to finance a home purchase in California.
If you’re interested in applying for a VA loan or have additional questions about using your VA benefits for a home purchase in California, you can reach our team here, by phone at (855) 855-4491, or by email at [email protected].