Does a VA loan in San Diego make sense?


San Diego may have one of the largest military concentrations in the country, but they don’t settle here as often as in some areas.

The leaders in VA loan purchases in the first half of 2021 were Washington DC, Virginia Beach and San Antonio. to study from a loan officer Veterans United. The San Diego Metropolitan County was ranked 11th for VA loans.

VA loans are a mortgage guaranteed by the US Department of Veterans Affairs and usually do not require a down payment. It can be used by veterans and active military personnel. VA states that approximately 90 percent of its loans are made without a down payment.

After sales declined sharply in the first half of 2020 due to the pandemic, almost all urban areas experienced a significant increase in loans by early 2021. In the first six months, 3,237 VA loans were used on the San Diego subway, up 8.2 percent from the year before. The areas of New York that grew the most were Northern New Jersey (up 39.14 percent), Anchorage (33.2 percent) and Savannah (28.92 percent).

Chris Birk, vice president of Veterans United Home Loans, said one of the reasons San Diego may have fewer loans is the large number of active military personnel, which means the population is more volatile. For example, Washington DC consistently has the most VA loans because there are more active military and veterans at all times. Another factor is the rise in house prices in San Diego, which is making it harder for some veterans to buy.

The median home price in San Diego County has hit an all-time high. $ 725,000 in May, an increase of 23 percent for the year. For an active member of the service who is currently serving, buying a home at an average price of a home without a down payment using a 30-year loan term can be over $ 4,000 per month.

Soldiers on active duty in San Diego receive monthly housing allowance this could make the payment more acceptable. The lowest rated member in San Diego earns $ 2,691 a month with dependents and $ 2,019 without. The highest ranking officer receives $ 3,828 per month with dependents and $ 3,330 excluding. Another thing that helps with costs is that VA loans do not require private mortgage insurance like many other low down payment mortgages.

Samantha O’Brien, a PorchLight real estate agent at University Heights, said this past year has made life difficult for some military personnel as house prices have skyrocketed. She said she worked with military personnel who were looking for a place in San Diego, but decided it would be wiser to go somewhere else where they can get more profit for their money.

“For those who don’t buy, I hear ‘I can go back to Texas and buy a bigger house,’ she said, ‘or’ somewhere else in the US. ‘

O’Brien said many people who decide to move to another state, despite being here at the moment, are looking for a place for families and tend to want some land. She said that many military personnel will decide to rent and wait to buy something in the area when their service ends.

However, not everyone is in a hurry from America’s Best City. O’Brien said she closed four VA loans in the last month, which were a combination of young military personnel buying condos and higher-ranking members who bought properties with the intent to retire here.

Tony Rector, a Coast Guard veteran, bought a $ 850,000 single-family home in the Del Cerro area in July with a VA loan. Since he is no longer on active duty, he does not receive a monthly housing allowance. However, he said he plans to have three roommates and his job as a financier at a car dealership will help him make payments.

“It’s just the best option,” he said of the VA loan. “That is why this is a great honor for us.”

Unlike many military personnel who come from outside the area, the Principal grew up in Lakeside and knew he didn’t want to leave – even if he could use that VA loan for out-of-state residency.

“This is my city. I like it, ”he said.

Another factor contributing to the potential decline in VA loans in San Diego County is the increase in cash supply as competition for homes continues to be high. Ian Ryan, a RE / MAX agent based in Ramona, said that in many of her bidding attempts, sellers rejected both VA loans and FHA (for new buyers) loans for cash buyers.

While the seller is going to receive the same amount of money, many local agents say the sellers will offer cash to make sure the purchase closes the escrow. This makes sense for sellers because a VA loan will require an appraisal, not a cash offer, so if the appraisal is below the asking price, the loan may not be approved.

Ryan said buying with cash may not always be the safest option in her experience. They are more likely than a military family to ask for concessions at the last minute or simply leave.

VA loans are also used for refinancing, but are likely to give preference to veterans who have lived in San Diego longer than many active military personnel. In the first six months of this year, refinancing in San Diego increased 76.3 percent over the same period last year. It reflects national trends in more refinancing loans than purchases during most of the pandemic.

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Most purchase loans in the first half of 2021

Washington-Arlington-Alexandria, DC-Virginia-Maryland-West Virginia: 6,805

Virginia Beach Norfolk Newport News, Virginia, North Carolina: 6,752

San Antonio, TX: 5114

Dallas-Fort Worth-Arlington, TX: 4658

Phoenix Mesa Scottsdale, AZ: 4414

Atlanta-Sandy Springs-Marietta, GA: 4197

Houston – Sugar Land – Baytown, TX: 3735

Riverside-San Bernardino-Ontario, California: 3435

Tampa-St. Petersburg-Clearwater, Florida: 3.397

Colorado Springs, Colorado: 3395

San Diego-Carlsbad-San Marcos, CA: 3237

Jacksonville, Florida: 3167

Las Vegas Paradise, NV: 3061

Seattle-Tacoma-Bellevue, Washington: 2468

Source: Veterans United.

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