From sprawling Naval Base Coronado to the Coronado Chamber of Commerce’s annual Salute to the Military Ball, a proud military presence is ingrained in our island’s culture, community, and identity.
Given the warm weather, perfect location, and luxury real estate, many military families assume they do not have buying power in Coronado. But, by understanding and leveraging Veterans Affairs (VA) benefits, you can become an owner in one of America’s most lucrative markets.
Getting a VA Loan
The eligibility requirements for obtaining a VA home loan vary based on service status and are listed on the U.S. Department of Veterans Affairs website. Active duty military are typically eligible after 6 months of service. If you have solid credit and income along with a Certificate of Eligibility, you are ready to seek pre-qualification and pre-approval.
The key benefits for VA borrowers are:
- No down payment
- No mortgage insurance needed
- Lower fees
- Your VA entitlement is reusable
People often assume that the loan is coming directly from the Department of Veterans Affairs, which is incorrect. The loan is still made by a private lender, while the VA guarantees a portion of it.
Getting a VA Jumbo Loan
A jumbo mortgage or jumbo home loan allows for a loan amount exceeding the regulatory “conforming limit” set by Fannie Mae and other lenders. In San Diego County, you can pair your VA benefits with a jumbo loan for 100 percent financing on a home purchase up to $580,750. That means no down payment.
Exceeding the $580,750 mark, there is no maximum loan amount with your VA benefit, as long as you are able to make the minimum down payment (which is dramatically less than home buyers without VA benefits). You can even use a Thrift Savings Plan (TSP) as your down payment.
Investing with Your VA Benefit
Contrary to widespread assumption, active military duty doesn’t relegate a military family to renting. Even though you move to a new location every few years, buying is in many cases the better financial strategy. We usually encourage military families here in Coronado to buy, and then rent the property out after they are stationed elsewhere. Rinse and repeat everywhere you go, and when you retire, you will have a portfolio of properties that paid off themselves.
“Your tenants will essentially pay the mortgage,” says Ruth Ann Fisher, team leader of Del Coronado Real Estate and military wife who employed the exact same strategy while moving 17 times in 22 years before finally making Coronado her permanent home in 1999. “Even if there is some outflow at the beginning, it will eventually become a positive cash flow where rent covers your debts and taxes on the home(s).”
Take the First Step to Owning in Coronado
VA benefits—and the home buying process in general—can seem complicated, but don’t let that deter you from becoming a homeowner here in beautiful Coronado. Del Coronado Realty can put you in touch with our preferred lender, who will help you maximize your VA benefits and get everything in line so that we can then start to show you Coronado homes for sale. Call us at 619-437-1888 to learn more.