How Much Can I Borrow With A VA Loan In San Diego?

If you’re a veteran looking to buy a home in San Diego, you may be wondering how much you can borrow with a VA loan. VA loans are backed by the Department of Veterans Affairs and offer significant advantages like no down payment and no monthly mortgage insurance However, there are loan limits that determine the maximum VA loan amount you may qualify for In this article, we’ll break down VA loan limits in San Diego and steps you can take to maximize your borrowing potential.

VA Loan Limits In San Diego

The baseline VA loan limit set by the VA is $647,200 for 2022. However, limits vary by county and are typically higher in more expensive real estate markets like San Diego. Here are the current VA loan limits for major counties in the San Diego metro area:

• San Diego County: $922,950
• Orange County: $970,800
• Riverside County: $647,200
• San Bernardino County: $647,200

These figures represent the maximum amount the VA will guarantee if you were to default on the loan However, they don’t necessarily cap the amount you can borrow You may be able to qualify for a loan amount higher than the limit if you make a down payment to cover the excess.

For example, let’s say the VA limit in your county is $650,000. If you wanted to purchase a $700,000 home, you’d need to put at least 25% down on the $50,000 difference. This allows your total loan amount to exceed the limit.

Factors That Determine VA Loan Eligibility

While VA loan limits set a ceiling, your lender will determine the actual loan amount you qualify for based on:

• Your credit score and history
• Your income and debts
• Your assets and reserves

Credit – The VA doesn’t dictate a minimum credit score requirement, but lenders usually look for a score of at least 620. The higher your scores, the more comfortable a lender will be approving you for a higher loan amount.

Income – Lenders want to see you have enough steady income to make the monthly payments. Most require a debt-to-income ratio below 41%. The less debt you have relative to income, the higher loan you can qualify for.

Assets – Lenders often like to see you have adequate savings and assets to prove you can cover emergencies that arise. Expect at least 2 months of mortgage payments in reserves.

Downpayment – Though the VA doesn’t require a down payment, coming up with one can allow you to qualify for a loan amount over the limit in pricier markets like San Diego.

Tips For Maximizing Your VA Loan Amount

Here are some tips for getting approved for the highest possible loan amount with a VA loan:

• Boost your credit score – Review your credit reports for errors, pay down balances, and make on-time payments to improve your score before applying.

• Lower your DTI ratio – Pay off credit cards and other debts to reduce your monthly obligations. This can help you qualify for a larger mortgage payment and loan.

• Increase reserves – Build up your savings for closing costs and post-purchase reserves. This gives lenders confidence in approving a higher amount.

• Make a down payment – For pricier homes, a 10-25% down payment allows you to exceed the VA limit and borrow more.

• Shop multiple lenders – Compare loan pre-approvals from several lenders. Each will assess your eligibility differently.

• Consider a lower-priced home – The higher the purchase price, the harder it is to qualify for financing. A more affordable property makes approval easier.

The Bottom Line

While the VA doesn’t cap loan amounts, their limits do factor into the equation when securing financing above those thresholds. By boosting your credit, income, assets, and down payment, you can maximize your chances of qualifying for the highest possible loan amount to buy a home in San Diego. Be sure to apply with multiple lenders to increase your chances of getting approved for the VA loan size you need.