Affordability and Loan Limits for Los Angeles County
If you are a Veteran who is thinking about moving to Los Angeles County, then you might be concerned about affordability. While it is true that the cost of living in Los Angeles is higher than the cost of living for counties located just east (e.g., Riverside County), you might be pleasantly surprised to know that your VA entitlements can make purchasing a home in Los Angeles easier than it may seem. Consider this: current interest rates are at historic lows and as a Veteran, you do not have to pay for Private Mortgage Insurance (PMI).
You might be wondering about the maximum amount you can borrow using a VA home loan. While there is no cap on the amount you can finance with a VA loan, the VA does limit the amount it will guarantee. If you buy a home above the VA loan limit, then you will have to make a down payment, an amount that essentially “guarantees” the portion not covered by the VA limit. That maximum amount you can borrow using your VA home loan without a down payment is called a loan limit. Most counties in the United States conform to the current loan limit of $484,350 as of January 1, 2019. However, since Los Angeles is considered a “high-cost county,” based on the median cost of homes, the home loan limit is $726,525, giving you 6.9% more to work with.
If you use VA home loan benefits above the conforming loan limit, you will have to secure a VA jumbo home loan and perhaps make a down payment. A down payment for a traditional home loan is generally 20% of the purchase price of the home. However, the down payment for a VA jumbo home loan is only 25% of the difference between the purchase price and the county loan limit. What would this look like for a home purchased in Los Angeles County? Let’s say you are trying to buy a home that costs $850,000. As you already know, the loan limit for a house being purchased in Los Angeles County is $726,525. Here is the formula:
($850,000 - minus 726,525) x 25% = $30,869 down payment
Pretty incredible, right? If you were to purchase the same house using a traditional home loan, then the down payment would be at least $170,000!
You can afford more than you think! Use our VA loan limit calculator and see the numbers for yourself.
Living in the City of Angels
In addition to the pleasant weather, gorgeous landscape and diverse food scene, Los Angeles has something for every personality type and lifestyle. Residents are known for their healthy and active lifestyles. If you enjoy spending time outdoors, location is everything. Los Angeles is home to mountains and the beach, and the desert is within driving distance, too. There are hundreds of museums and art galleries for those who enjoy arts and culture, as well as live theater and one of the most dynamic music scenes in the world. Los Angeles is home to a number of professional and collegiate sports teams. Some of those professional teams come in pairs: there are two NBA teams (Lakers and Clippers), two NFL teams (Chargers and Rams) and two Major League Baseball teams (Dodgers and Angels).
The job market just might be one of the most important reasons for you to consider moving to Los Angeles County. The job market remains robust and employers continue to add positions, especially in construction and manufacturing. In fact, the unemployment rate is currently around 4.4%, just a little above the national average. While it’s true that countless people go to Los Angeles hoping to succeed in the entertainment industry, you can look toward technology, engineering, and tourism for their expanding job opportunities.
SoCal VA Homes is Here to Assist You
SoCal VA Homes knows that Veterans run into challenges when they try to use their VA home loan. Sellers are often reluctant to work with buyers using VA loans instead of traditional ones, and this can be a very frustrating thing. You don’t deserve that, not after sacrificing and serving your country. SoCalVA Homes has developed three programs to help Veterans navigate the process of buying a home, and we are passionate about helping you overcome any and all hurdles.