VA Loans for Orange County First time Home Buyers
There is still a 100% financing loan program for Orange County, CA first time buyers (and move up buyers). It is the VA loan program. While FHA is a very attractive program, VA does have its advantages for Orange County home buyers. And like FHA, the Orange County VA loan limits were increased. The $0 down financing loan limit for Orange County, CA is $593,750. **The 2010 Orange County VA loan limits have been announced.**
Two Big Advantages VA has over FHA for Orange County Home buyers
The first and most obvious is the fact the VA does not require a down payment while FHA requires a 3.5% down payment. 3.5% is not much, but it doesn’t beat %0 down. An Orange County buyer purchasing a $400,000 home with FGA financing would need $14,000 for the down payment, while a VA eligible home buyer would not need a dime.
The second big advantage for VA buyers over FHA is the fact that there is no monthly mortgage insurance. FHA uses a monthly mortgage insurance factor of .55%. This translates to an approximate monthly mortgage insurance payment of $180 on an FHA loan, versus $0 on a VA loan. This is essentially like saying a VA borrower will have an effective interest rate .5% less than an FHA buyer.
*****Updated September 13 2009 – - Here’s another big advantage VA has over FHA for Orange County, CA home buyers. Effective Octover 1, 2009, FHA will effectively clear out their Approved FHA Condo list. This will make it very difficult for FHA buyers looking at condo’s. However, VA has their own list of Orange County, CA VA Approved Condo’s. 100% financing is available for condo’s on this list.*****
One great similarity between FHA and VA financing is the Streamline Refinance Program. No appraisal is required for either type of loan, as well as no qualifying. While the FHA program is known as the FHA Streamline Refinance, the VA version is known as the VA Streamline Refinance, and also as the IRRRL, or Interest Rate Reduction Refinance Loan.
FHA is a great program for Orange County home buyers. Mortgage insurance on Conventional loan programs such as Fannie Mae or Freddie Mac, if you can even get it right now, is more expensive than FHA. Plus, in Orange County at least, on a Conventional loan a buyer will need at least 10% down and a 740 FICO to even think about qualifying for mortgage insurance. So yes, FHA is a great program for Orange County home buyers. But that just shows how good VA is.
Orange County, CA home buyers who are eligible for the VA loan program should take time to learn the VA Loan Process beginning with the PreApproval all the way through to the closing of escrow.
Who Qualifies for VA financing?
- Wartime veterans who have served at least 90 days of active service.
- Peacetime veterans who have served at least 181 days of active service.
- Reservists who have served at least 6 years.
- Veterans discharged under conditions that were not dishonorable.
To clarify the fourth point, if a veteran is separated from the military with a general discharge, then he or she is eligible for a VA loan. In some case, a veteran separated with an other than honorable discharge (OTH) also retains this benefit as well.
The only other exception to the above is veterans who have been discharged for medical reasons. For instance, if a serviceman is separated from basic training for having suffered an injury that leaves him or her unable to serve in the military then that veteran is entitled to a VA home loan.
What is the First Step?
The first thing you need to obtain in order to use your VA Entitlement is a VA Certificate of Eligibility. If you do not have one already we would be happy to assist you in getting one. The process is quick and easy. Just call our office and we will be glad to send out to you a VA Form 26-1880 or request for COE. Simply fill it out and return it to the VA and you should have your COE within a couple of weeks. If you are in a hurry, you may visit your local VA Office and have your COE in as little as one day. Still, the easiest way is to contact an experienced VA lender who can help you get it.
You will want to talk to an Orange County Direct VA lender who can walk you through the steps of getting PreQualified and PreApproved BEFORE going out and making an offer on a home. You will want to understand the program, how the closing costs work and who can pay them. A qualified lender or loan officer can prepare VA loan scenarios that will give you a complete break down of the purchase price, loan amount, closing costs and “prepaids”. Once you are PreApproved, you will be able to go out and make offers on homes with confidence in the fact that the financing is already figured out.
Authored by Tim Storm, an Orange County, CA Loan Officer – Please contact my office at Frost Mortgage Lending Group for more information about an Orange County, CA home loan. 877-786-4243 x 7.
Contact us for your Orange County VA Mortgage:
Call our office today and see how we can help you and your family. Ask for your Free First Time Home Buyer Report.
877.786.4243 x 7 | tstorm (at) ochomebuyerloans.com
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