VA Loan Rates: What You Need to Know

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VA home loan rates, or the interest rates applied to VA loans, are just one of the many benefits associated with loans backed by the Department of Veterans Affairs. If you’re an active duty service member, a veteran, or the spouse of a veteran, competitive VA mortgage loan rates are just one of the many reasons you should consider financing your home with a VA loan. Even if you currently have a traditional mortgage, you can refinance and enjoy the many benefits of VA loans, especially since VA mortgage rates can be lower than rates for conventional home loans.

Are VA Loans Better Than Conventional Mortgages?

When compared to conventional mortgages, such as FHA, the VA loan stands out for a variety of reasons. Whether it’s the especially low rates, flexible underwriting, zero down payment*, no mortgage insurance** or other secondary benefits, VA loans truly stand apart from the competition. Since they’re designed to help active-duty military personnel, veterans, and other groups of homeowners afford the home of their dreams, VA loans come with a variety of benefits in addition to low interest rates, including:

  • No down payment*
  • No mortgage insurance**
  • Flexible qualification guidelines
  • No prepayment penalties
  • Competitive interest rates
  • Streamline refinancing without appraisal***

What Are My Options for VA Loan Rates?

Just like conventional loans, VA loans can come as fixed or adjustable-rate mortgages (ARM) and can last up to 30 years. If you aren’t familiar with either type, here’s a quick explanation of each so you can make the choice that’s right for you. Adjustable-rate mortgages are just that — mortgages with a rate that adjusts. Although the initial interest rate of ARMs tends to be below market rate, the interest rate may go up or down throughout the loan. Since the ‘adjustment’ depends on the market, you could wind up paying more fifteen years into the loan than you initially anticipated. Fortunately, if the rates creep up too high, it’s possible to refinance via a VA Streamline (must have a current VA loan) to go from an adjustable-rate mortgage to a fixed mortgage.

As you probably guessed, fixed-rate mortgages are the opposite — the interest rate is fixed throughout the life of the loan. VA fixed loan rates tend to be lower than those of traditional mortgages so if the market interest rate drops, military homeowners can refinance with a VA loan to an even lower VA loan rate****. If you don’t qualify for the lowest VA loan rates, there are a few things you can do to get a better interest rate in the future, including:

  • Spend time improving your credit score
  • Keep an eye on the market for your best home pricing opportunity
  • Make sure you have money in the bank for a down payment
  • Find a VA-approved lender to guide you through the process

How Do I Lock In My VA Interest Rate?

Whether you prefer to know the interest rates before you start your home search, mid-way through, or once you’ve found the home you’d like to purchase, HomeBridge can help you figure out what the interest rate will look like. In most cases, we’ll have a better comprehension of your loan rate once you have a pre-approval¹. That will confirm your eligibility and give you a general idea of your qualifying rate, but we can help answer your questions at any point along the way. If you meet the eligibility requirements and are ready to find the best VA loan rates, don’t hesitate to contact a HomeBridge Mortgage Loan Originator to learn more. There’s absolutely no obligation, and you’ll be one step closer to owning the home you’ve always dreamed of.

*100% financing up to county loan limits may be available for purchase loans or 1-unit cash-out refinances.  Cash-out not available in Texas.  Minimum FICO score requirements apply.

**Most VA loans will require a funding fee.

***To be eligible for a VA streamline refinance you must currently have a VA loan.  An Automated Valuation Method (“AVM”) is used to determine market value if the new loan amount is less than 125% Loan-to-value (“LTV”) as per the AVM.  However, if the new loan amount exceeds 125% LTV, a full appraisal must be ordered.

****By refinancing your existing loan, your total finance charges may be higher over the life of the loan.

¹The HomeBridge pre-approval is conditional and subject to the following conditions: Verification of all information provided by the customer; satisfactory appraisal of the subject property; satisfactory title search; fully executed sales contract; and underwriter review and approval of the complete loan file. This list is not exhaustive and other items may be required. The conditional pre-approval is not a commitment to lend or for a specific rate.

 

LR 2016-642C