| San Diego County is home to one of the largest | | | | the loan amount, the fee is 1.5% of the loan. This rate |
| concentrations of military bases in the United States. In | | | | increases to 1.75% for National Guard/Reserve. |
| fact, the San Diego area contains 12 major Marine | | | | For active duty personnel or veterans who put a |
| Corps and Navy bases and facilities. If you're in the | | | | down payment of 10% or more of the loan amount, |
| military and moving to San Diego, one of your biggest | | | | the fee is 1.25% of the loan. This rate increases to 1. |
| decisions is whether to buy a property, live on base | | | | 5% for National Guard/Reserve. |
| housing (if this option is available to you), or rent a | | | | The rates listed above are for first time users of the |
| home or apartment. If you choose to buy a property, | | | | VA loan guarantee program. Individuals who have |
| there are many issues to consider before taking this | | | | used the VA guaranteed loan program before pay |
| step. | | | | higher rates than first time users. The rates above are |
| BUY OR RENT? | | | | subject to change. In some limited cases, individuals are |
| The decision to buy or rent is more complicated for | | | | exempt from paying the funding fee. You should |
| military personnel because you may be assigned to | | | | contact your local VA center for current information. |
| San Diego only for a limited period of time. If you plan | | | | CHOOSING A VA LOAN VS. A CONVENTIONAL |
| to purchase while in San Diego and then sell when you | | | | LOAN |
| transfer, the condition of the real estate market at the | | | | You must carefully evaluate the terms of the VA |
| time you sell will make this either an easy or difficult | | | | guaranteed loan vs. the terms of a conventional loan. |
| process. In a seller's market (when demand exceeds | | | | One advantage of a VA guaranteed loan is that many |
| supply), properties tend to sell quickly and at or above | | | | lenders will not require you to put a down payment on |
| asking price. In a buyer's market (when supply | | | | the purchase of the property, assuming you meet their |
| exceeds demand), properties usually take much longer | | | | other lending criteria (e.g. credit scores, sufficient |
| to sell and may sell below asking price. Individuals in the | | | | income, adequate debt to income ratio, etc.). There are |
| military should consider this issue in determining | | | | also many zero down payment conventional loan |
| whether to buy or rent real estate in the San Diego | | | | programs. In some cases, the VA guaranteed loan will |
| area. | | | | offer a lower interest rate and better terms, and in |
| For those who choose to buy, the major other | | | | other cases, you can obtain a better deal through |
| consideration is the likely appreciation rate of your | | | | conventional financing. A good loan officer can help |
| property during your tenure in San Diego. If you plan to | | | | you evaluate the advantages of either loan, given your |
| sell your property before you depart to your next | | | | particular situation. |
| assignment, you should remember that there are | | | | FINDING THE RIGHT HOME |
| expenses (e.g. realtor fees, taxes, etc.) associated with | | | | If you are familiar with the San Diego area, then you |
| selling your house, and any price appreciation you | | | | probably already know where you want to live. If you |
| realize by owing the property for a few years, may or | | | | are less familiar with the communities in San Diego, |
| may not be offset by these fees. | | | | your Realtor can serve as an excellent resource to |
| Some individuals choose to keep their property even | | | | answer your questions. There are many steps to take |
| after they transfer to a new assignment outside of | | | | during the home search process, which include: |
| San Diego. In these cases, you can rent out the | | | | 1. Work with your loan officer to identify how much |
| property, leave it empty, or find another acceptable | | | | you can afford. |
| use of the dwelling. If you choose to hire a Property | | | | 2. Determine what type of property you want to buy |
| Manager to oversee the renting and maintenance of | | | | (single-family home, townhouse, condominium, other). |
| your property, keep in mind that the fess for this | | | | Your Realtor can advise you about the differences |
| service will cut into any monthly profit you realize on | | | | between these types of properties. |
| the property. | | | | 3. Determine how many bedrooms, bathrooms, square |
| GETTING A HOME LOAN? | | | | footage, etc. you need. |
| If you decide to purchase a property, obtaining a home | | | | 4. Determine what areas of San Diego you would |
| loan is one of the tasks you must undertake. Many | | | | consider living in. |
| active-day members, retirees and other service | | | | 5. Calculate the drive time (with and without traffic) to |
| veterans are eligible for special loan programs | | | | your job. |
| guaranteed by the Veterans Administration (VA). | | | | 6. Identify the quality of schools in the neighborhoods |
| To be eligible for a VA guaranteed loan, you must | | | | that you are considering. |
| have served on activity duty and have a discharge | | | | 7. Locate the crime statistics for the neighborhood that |
| status of other than dishonorable after a minimum of | | | | you are considering. |
| 90 days of service during wartime, or a minimum of | | | | 8. Identify the location of local community resources |
| 181 continuous days during peacetime. There is a | | | | such as libraries, shopping centers, athletic centers, etc. |
| minimum 2-year service requirement for veterans who | | | | 9. Ask your Realtor to advise you about the resale |
| enlisted after September 7, 1980. The 2-year | | | | potential of the home you are considering. |
| requirement also applies to Officers who began | | | | Although there are many other factors to consider, the |
| service after October 16, 1981. There is a minimum | | | | above is a good starting point. Your Realtor should be |
| 6-year service requirement for National Guard | | | | able help you get answers to the questions above as |
| members and Reservists, and surviving spouses are | | | | well as provide you many other resources. Keep in |
| also eligible under some conditions. There are other | | | | mind that most Realtor's who assist homebuyers and |
| special conditions in which a person may be eligible, so | | | | paid by the home seller, but make sure to ask your |
| contact your local VA office to get more information. | | | | Realtor about this. |
| WHAT IS VA GUARANTEED LOAN? | | | | HOW MUCH SHOUD I PAY FOR A HOUSE? |
| The VA loan is a federal guarantee of a maximum of | | | | Your Realtor should be an excellent source of |
| 25% of a home loan amount but not to exceed | | | | information to help you understand a fair offer price. |
| $104,250. This formula allows eligible members to | | | | The Realtor should provide you information about |
| obtain a maximum loan amount of $417,000 (as of | | | | what other similar properties in the same community |
| 2006). However, service members must meet other | | | | have sold for recently, current pricing trends for the |
| eligibility requirements. Individuals borrowing using this | | | | community, as well provide you a recommendation |
| type of loan must intend to be occupants of the | | | | based on their experience in the local market. |
| purchased property. | | | | DO I NEED A HOME INSPECTION? |
| Private lenders are the source of funds for VA | | | | There are many other issues besides the offer price |
| guaranteed loans. The guarantee provides these | | | | to consider when making an offer. For example, many |
| private lenders assurance that the federal government | | | | buyers find it advantageous to get an inspection of the |
| will reimburse the lender up to the maximum allowable | | | | property by a qualified inspector. The inspection |
| amount if the borrower fails to repay the loan. | | | | typically covers the major systems of a property. |
| Because of this guarantee, lenders are more favorable | | | | Check out the National Association of Home |
| to offering loans without a requirement for a down | | | | Inspectors web site for more information about what is |
| payment. | | | | covered in a typical home inspection. Getting a home |
| VA CERTIFICATE OF ELIGIBILITY | | | | inspection is generally a good idea. |
| Individuals desiring a VA guaranteed loan must first | | | | HOW LONG WILL THIS TAKE? |
| obtain a Certificate of Eligibility from the Veterans | | | | If you want to use the VA guarantee, then make sure |
| Administration (VA Form 26-1880). Contact your local | | | | you have obtained the Certificate of Eligibility far in |
| VA office to obtain this form by calling 1-888-244-6711. | | | | advance of your relocation to San Diego. Whether or |
| You will need a copy of your military discharge | | | | not you are using the VA loan program, be sure to |
| document (DD-214) to submit with your application. | | | | obtain a loan pre-approval (sometimes called loan |
| Once you have the Eligibility Certificate, you can then | | | | prequalification) from a lender or mortgage broker. This |
| select a lender or mortgage broker to work with on | | | | lets home sellers know that you are a serious buyer |
| getting the loan. | | | | and are ready to act quickly if needed. |
| CLOSING COSTS | | | | Prior to moving to San Diego, get a sense of the local |
| In addition to the purchase price of your property, there | | | | real estate market. Your Realtor can set up an |
| are closing costs that must be paid to process your | | | | automatic email notification system that will send you |
| home loan. These closing costs are fees that are | | | | descriptions and pictures of properties that meet your |
| charged by different service providers to help | | | | criteria. Doing this type of research should save you a |
| complete the loan process. For example, your lender | | | | lot of time when you arrive. |
| will require an appraisal of the property to make sure | | | | Once you have your loan pre-approval, the next step |
| that its value is at or above your purchase price. Other | | | | is to locate a property that meets your needs. Your |
| charges commonly included in closing costs are: | | | | Realtor should show you a variety of available |
| recording fees, credit report fee, prorated taxes and | | | | properties that meet your criteria. Once you find a |
| assessments, hazard insurance, flood insurance (if | | | | house you an interested in, your Realtor will prepare |
| required), survey, title examination, title insurance, | | | | the purchase offer documents, and guide you through |
| postage and shipping fees, and the VA Funding fee. | | | | the loan and closing process. |
| WHAT IS THE VA FUNDING FEE? | | | | In summary, it's simply a process of getting a loan, |
| The VA charges a fee to individuals utilizing the VA | | | | finding a house that you like, making an offer that is |
| guaranteed loan. This fee is a percentage of the loan | | | | accepted, and going through the closing process, which |
| amount and is linked to the size of your down | | | | can occur in less than 30 days. |
| payment on the home you plan to purchase. | | | | CONTACT A SAN DIEGO REALTOR |
| For active-duty personnel or veterans who put no | | | | If you are moving to San Diego, contact a Real Estate |
| money down, the funding fee is 2.15% of the loan | | | | agent who is familiar with VA guaranteed loans and |
| amount. This rate increases to 2.4% for National Guard | | | | has experience working with military buyers. Many |
| Reserve. | | | | agents have prior military service themselves, and are |
| For active duty personnel or veterans who put a | | | | very familiar with your situation and needs. |
| down payment greater than zero but less than 10% of | | | | |