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VA Loans

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A VA mortgage is a loan that is either a fixed or adjustable rate loan that is substantially guaranteed  by The Department of Veterans Affairs. This guarantee by the VA allows lenders to provide advantageous terms to borrowers.

A VA Mortgage requires no down payment or private mortgage insurance.  VA loans also feature very competitive rates and terms. If you qualify for a VA loan, you can essentially purchase a home with very little, or in some cases no initial costs. For example, all funding fees are waived with a 10% Disability. The VA will allow loans up to a 100% of the appraised value. This VA Mortgage is essentially the only Federally guaranteed loan program where the loan to value (LTV) can be 100%. The VA specific appraised value form that an appraiser uses to submit to the VA is known as a Certificate of Reasonable Value (CRV).  Although Escrow Impound Accounts are not required by The Department of Veterans Affairs, it is still the policy of many lenders to request that Escrow Impound Accounts be utilized for payment of property taxes and other costs related to a VA loan.

100% Home Financing (0% Down Payment):

The VA offers the benefit of 100% Home financing in order to assist veterans to save money and leverage purchasing power when buying a home.  Take a look at the chart below to see how much the VA will finance up to for each county around The San Francisco Bay Area.

 

 

ALAMEDA CALIFORNIA 100% Financing up to $636,150
CONTRA COSTA CALIFORNIA 100% Financing up to $636,150
MARIN CALIFORNIA 100% Financing up to $636,150
MONTEREY CALIFORNIA 100% Financing up to $575,000
NAPA CALIFORNIA 100% Financing up to $636,150
SAN FRANCISCO CALIFORNIA 100% Financing up to $636,150
SAN MATEO CALIFORNIA 100% Financing up to $636,150
SANTA CLARA CALIFORNIA 100% Financing up to $636,150
SANTA CRUZ CALIFORNIA 100% Financing up to $636,150
SOLANO CALIFORNIA 100% Financing up to $431,250
SONOMA CALIFORNIA 100% Financing up to $595,700

 

Keep in mind that most lenders require a minimum credit score of 620. Another factor to keep in mind is that The VA Mortgage Guidelines specify that your Debt to Income Ratio (DTI) cannot exceed a 41% maximum. However, your debt to income will be determined based Residual Income which is the amount of funds left over after all required expenses within a given period (usually monthly) have been paid.

Take a look at the chart below to see how much 100% VA financing can save you on your down payment for each county located around The San Francisco Bay Area.

Department of Veterans Affairs 100% Financing (0% Down):

COUNTY MAX LOAN AMOUNT 5% DOWN 10% DOWN 20% DOWN
ALAMEDA $636,150 SAVE $31,807.50 SAVE $63,615.00 SAVE $127,230.00
CONTRA COSTA $636,150 SAVE $31,807.50 SAVE $63,615.00 SAVE $127,230.00
MARIN $636,150 SAVE $31,807.50 SAVE $63,615.00 SAVE $127,230.00
MONTEREY $575,000 SAVE $28,750.00 SAVE $57,500.00 SAVE $115,000.00
NAPA $636,150 SAVE $31,807.50 SAVE $63,615.00 SAVE $127,230.00
SAN FRANCISCO $636,150 SAVE $31,807.50 SAVE $63,615.00 SAVE $127,230.00
SAN MATEO $636,150 SAVE $31,807.50 SAVE $63,615.00 SAVE $127,230.00
SANTA CLARA $636,150 SAVE $31,807.50 SAVE $63,615.00 SAVE $127,230.00
SANTA CRUZ $636,150 SAVE $31,807.50 SAVE $63,615.00 SAVE $127,230.00
SOLANO $431,250 SAVE $21,562.50 SAVE  $43,125.00 SAVE   $86,250.00
SONOMA $595,700 SAVE $29,785.00 SAVE $59,570.00 SAVE $119,140.00

Interest Rate Savings:

Because VA Mortgages are guaranteed by The Department of Veterans Affairs, the risk to lenders is substantially reduced. This typically results in considerable savings of between 0.5 to 1 percent when compared to conventional interest rates for borrowers. With the high value of homes in the San Francisco Bay Area, this amount can be quite sizable. Take a look at the chart below to see how much mortgage interest rate savings you can expect on the VA guarantee for a VA Loan in each county around The San Francisco Bay Area.

Interest Rate Savings by San Francisco Bay Area County on Guaranteed VA Loans:

COUNTY MAX LOAN AMOUNT .5% INTEREST SAVINGS .75% INTEREST SAVINGS 1.00%

 INTEREST SAVINGS

ALAMEDA $636,150 SAVE $3,180.75 SAVE $4,771.12 SAVE       $6,361.50
CONTRA COSTA $636,150 SAVE $3,180.75 SAVE $4,771.12 SAVE       $6,361.50
MARIN $636,150 SAVE $3,180.75 SAVE $4,771.12 SAVE       $6,361.50
MONTEREY $575,000 SAVE $2,875.00 SAVE $4,312.50 SAVE      $5,750.00
NAPA $636,150 SAVE $3,180.75 SAVE $4,771.12 SAVE       $6,361.50
SAN FRANCISCO $636,150 SAVE $3,180.75 SAVE $4,771.12 SAVE       $6,361.50
SAN MATEO $636,150 SAVE $3,180.75 SAVE $4,771.12 SAVE       $6,361.50
SANTA CLARA $636,150 SAVE $3,180.75 SAVE $4,771.12 SAVE       $6,361.50
SANTA CRUZ $636,150 SAVE $3,180.75 SAVE $4,771.12 SAVE       $6,361.50
SOLANO $431,250 SAVE $2,156.25 SAVE  $3,234.38 SAVE      $4,312.50
SONOMA $595,700 SAVE $2,978.50 SAVE $4,467.75 SAVE     $5,957.00

 

 

Monthly Private Mortgage Insurance (PMI) Savings:

Private Mortgage Insurance (PMI) is not required a VA loan because of the guarantee the VA provides on all VA Mortgages. This saves you thousands of dollars over the life of the mortgage. Normally, you would be required to pay for PMI on most conventional loans where the down payment is less than 20% in order to protect the lender from a default on the mortgage. The savings you gain on PMI allows you to reduce your monthly expenses, borrow more, and/or focus on building more equity in your home.

Take a look at the chart below to see how much the VA Mortgage Monthly PMI Savings will be for each county around The San Francisco Bay Area:

COUNTY MAX LOAN AMOUNT .3%       MONTHLY PMI SAVINGS .5%       MONTHLY PMI  SAVINGS .75%       MONTHLY PMI  SAVINGS 1.00%       MONTHLY PMI  SAVINGS 1.50%       MONTHLY PMI  SAVINGS
ALAMEDA $636,150 SAVE       $159.00 SAVE $265.06 SAVE $397.59 SAVE       $530.12 SAVE       $808.605
CONTRA COSTA $636,150 SAVE       $159.00 SAVE $265.06 SAVE $397.59 SAVE       $530.12 SAVE       $808.605
MARIN $636,150 SAVE       $159.00 SAVE $265.06 SAVE $397.59 SAVE       $530.12 SAVE       $808.605
MONTEREY $575,000 SAVE      $143.75 SAVE $2,875.00 SAVE $359.38 SAVE      $479.16 SAVE      $718.74
NAPA $636,150 SAVE       $159.00 SAVE $265.06 SAVE $397.59 SAVE       $530.12 SAVE       $808.605
SAN FRANCISCO $636,150 SAVE       $159.00 SAVE $265.06 SAVE $397.59 SAVE       $530.12 SAVE       $808.605
SAN MATEO $636,150 SAVE       $159.00 SAVE $265.06 SAVE $397.59 SAVE       $530.12 SAVE       $808.605
SANTA CLARA $636,150 SAVE       $159.00 SAVE $265.06 SAVE $397.59 SAVE       $530.12 SAVE       $808.605
SANTA CRUZ $636,150 SAVE       $159.00 SAVE $265.06 SAVE $397.59 SAVE       $530.12 SAVE       $808.605
SOLANO $431,250 SAVE      $107.81 SAVE $179.69 SAVE  $269.54 SAVE      $359.38 SAVE      $539.07
SONOMA $595,700 SAVE     $148.93 SAVE $248.21 SAVE $372.32 SAVE     $496.42 SAVE     $744.63

 

Here are a few other things to keep in mind about what you also receive from a VA Mortgage:

Basic Allowance for Housing (BAH):

If you are an active military member, another significant benefit you will receive as a qualified borrower for a VA loan include the ability to apply your Basic Allowance for Housing (BAH) as income towards some or all of your mortgage payment.

No Prepayment Penalty:

Unlike many other loans, VA Mortgages do not have a Prepayment Penalty. This provides maximum decision making freedom and flexibility for borrows with regards to future refinancing or home purchasing choices.

 

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