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http://mil-loans.com – Military Home Loans is a VA loan specialist in San Diego California. As San Diego VA Loans experts, we cater to Veterans in San Diego as well as veterans throughout the state of California. We have access to a full range of mortgage sources and all of our lending specialists are dedicated to finding the right loan-with the best rates, terms and costs-to meet your unique needs.
We want to insure that every veteran across America anybody who is eligible for their VA loan can have access to the full scope of what the VA offers them as a home loan benefit.
The big deal here, Zero down. That’s why 80% of the people use VA and some of them use zero down because they have to and some of them us zero down because they want to. The other parts here, no mortgage insurance. No PMI. Do any clients want PMI? No. So, it doesn’t have any. We’ll talk about how it compares to FHA in a second but this is a big deal. It’s one loan so no 80/20 programs. Believe it or not there are adjustable options. There’s a 3 year adjustable and a 5 year adjustable. We hardly ever use those. The fixed options are 15 years and 30 years. 99.9% of our clients do 30 year fixed loans. Plain boring, vanilla, principle and interest 30 year fixed loan because quite frankly that’s what clients want these days as well…is a nice, safe, secure house I can afford.
There’s no pre-payment penalties and VA loans are typically lower rates. What do I mean by lower rates? I mean somebody who is getting a VA purchase, with zero down that maybe even has marginal credit is going to get a better interest rate than somebody doing 20% down that has an 800 credit score. Yes. Why is that? Because it’s a government backed loan and the banks have less risk. So we’ll typically see VA rates running about a quarter percent less than a conventional interest rate. That will come up a little bit later on one of the places when the VA really makes sense. Because who here has a client who wants the lowest interest rate possible? They all do, justifiably. So if you want to get the lowest interest rate possible you probably want to take advantage of it.
The VA loan is assumable. Is this a big deal right now? No. Is this going to be a big deal in the future? Yes. Why? What do I mean by assumable? I mean anybody, military or not, who is credit worthy can assume your VA loan in the future. So your client goes out and buys a $400,000 property. Currently let’s guess it’s at 4% interest rate. 5 years from now, let’s assume that the market has done nothing. House is still $400,000 and your client goes to sell his house for $400,000 and the neighbor who has a regular loan goes to sell his matching house for $400,000. Interest rates 5 years from now, give me a number, what rate should we use? Seven – eight. Let’s use 7. Interest rates are at 7% so the buyer comes along and says “Ok, I have these two houses to chose from. They’re both $400,000 and they both look exactly the same. I can get the same loan on both of these, I wonder which one I want to buy?”. Your veteran seller goes “hey, you can assume my 4% loan which it already has 5 years taken off of it and buy my house. Would you rather do that?”. Is that a valuable commodity? Could your seller say “hey, I’m not going to sell it for $400,000. I can sell it to you for $450,000 and it is still a cheaper deal than you buying the neighbor’s house at $400,000. Do you want to buy my place?”. That’s where this is going to become important in the future.
Interest rates are ridiculous right now and assumability at some point in the future, we’ll probably see a lot more of it. Right now, I can get an interest rate of 4% and you’re at 5 well I’ll just get a new loan. When rates go up, this is when this will become a big deal.
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San Diego VA Loans: Benefits of VA and CalVet Loans
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