Home Buying in 92646>Question Details

Dan, Home Buyer in 92646

Is getting a CAL-VET loan a good idea?

Asked by Dan, 92646 Wed Feb 24, 2010

I don't own a home but I would like to. I'm thinking of getting a cal-vet loan but am discouraged after reading the negative responses from this site regarding cal-vet. What should I do?

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Karen Parsons Fiddler’s answer
Hi Dan,

Find a mortgage professional and look into all your options. The CAL-VET can be a great option if you have little/no down payment.....but there are many options out there right now, so look into what's best for you.

I would suggest you start with your bank or credit union and then go from there.

0 votes Thank Flag Link Fri Jun 11, 2010
Cal Vet Loan key points to remember:
-Loan is a land installment contract, which means if you ever default any money you have put into the property converts to rent.
-Title is held by Cal Vet, you must get their permission to modify or encumber the property since if you default they are on the hook for it. Also, you must reside in the house, if you rent or move Cal Vet will terminate the contract as only the veteran should benefit.
-They are not a bank, the funding is originated by bonds sold by the state of California, thus if you sell before a certain period you may owe taxes you wouldn't on a home sale.
-Rates and funding fees not really competitive when APR's are low like now.
0 votes Thank Flag Link Mon Jun 7, 2010
Hi Dan ~

Trulia has great information but don't stop here. Meet with a mortgage advisor who will show you features of both programs so you can make a decision which one is best for you.

All the Best!

0 votes Thank Flag Link Wed Feb 24, 2010
Hi Dan,

One drawback to the Cal-Vet loan vs. a VA loan is the interest rate. Looking at the Cal-Vet rates today, they range from 5.750% to 6.200% depending on the bond funds source.

With VA, the interest rates are around 4.750% today.

The upside, though, is Cal-Vet does have a rehab loan so if the property needs some work, the rehab loan would be a possible solution.

Best wishes,
0 votes Thank Flag Link Wed Feb 24, 2010
Hi Dan,
Nothing wrong with a calvet loan. It usually tales 30-45 days to process. You can do 0 down if you like. there is a 2.25% funding that is added on to your loan amount. The good thing is there is no monthly MIP as yu have with FHA. the going interest rate is about 5.75% right now. I believe VA is about 5.5% and also has 0 down. Both are good loans. Oh the funding fee is waived if the vet is 10% disabled or more.
Hope that helps you!
Connie Bramble
0 votes Thank Flag Link Wed Feb 24, 2010
I would say look into it. I haven't dealt with them for a while but they use to be very slow, Don't rush out and find a house till you have started all the process and are sure that is the way you want to go.
0 votes Thank Flag Link Wed Feb 24, 2010
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