What You Need To Know About VA Mortgages in Orange County California

Are you a veteran shopping for a new home in Orange County, CA? Then you need to be aware of some of the differences regarding VA loans for properties in Southern California.
VA loans are guaranteed by the federal government so that you, the borrower, can avoid added costs of private mortgage insurance. Plus, because the government is securing these loans, lenders can offer far better terms to you, such as no down payment.
But complications start to arise when you’re looking for real estate in robust markets, like Orange County is currently seeing. It would be tricky to imagine the VA guaranteeing loans in the millions, which is why they cap loan limits that they are willing to back. Loan limits were raised in 2018, and in Orange County, up to $679,650 of a single-family home will be guaranteed. The problem? In 2018 the median home price in Orange County, CA stands at an all-time high: $824,450.
How can you buy your new home in Orange County if you’re stuck looking for elusively low prices?
You can get a mortgage for more than the VA’s guarantee limit, but you’ll likely need to make a down payment on that extra amount. Lenders will want to protect that additional investment beyond what the VA backs, but you’ll still have a far lower cost than you would with a conventional mortgage.
If you found a property in Orange County for $1,000,000, you could take out your full VA loan of $679,650, leaving you with $320,350 left to finance. Your options for how to deal with that remaining balance include:
Taking out a loan. Even with a 20% down payment, you’re talking about $64,000 out-of-pocket, which is far more achievable than hundreds of thousands of dollars.
Paying cash. If you have the savings for it, skip a headache and cover the remainder with cash.
Getting a gift. If a friend or family member is willing to help you out, you can use gift money to help cover the extra down payment.