VA mortgage rates are typically lower than FHA or conventional mortgage rates. This is one of the benefits of the VA home loan program. If you’re a veteran of the US military or an active-duty servicemember, you could qualify for a home loan guaranteed by the Department of Veterans Affairs (VA). Veterans home loans are normally the best financial option for military families looking to own their own homes.
VA Home Loan Interest Rates Today
VA loan rates were enjoying a low period until recent political developments in the United States. Currently VA mortgage rates are on the rise, but they are still lower than those associated with FHA or conventional home loans. An assortment of lenders and VA loan companies report VA interest rates ranging from 2 to 5 percent. The rate you’ll be approved for depends on your credit score and credit history. The latter includes items like your payment history, whether or not you’ve foreclosed on a home or declared bankruptcy, how many lines of credit you have opened, how much debt you’ve accrued on each of those lines, and how speedily you pay back that debt.
Despite market fluctuations and current unpredictable times, our loan officers here at Low VA Rates have a sincere investment in the well being of our nation’s veterans and will work with you to get you the lowest rates possible given your financial situation.
VA Home Loan Benefits
VA loans are different from FHA or conventional loans: their rates are usually lower, and they come with added benefits exclusive to military veterans. Some of these benefits include:
No Down Payment or Prepayment Penalties
The Department of Veterans Affairs guarantees a large portion of the VA loan. This gives the lender the security they’d normally get from a down payment and allows the borrower to qualify for 100 percent financing, meaning they close on their loan without putting any money down. Compare this to most conventional mortgages which require a 5 percent minimum down payment.
Additionally, VA loans come without any prepayment penalties. This means that you can refinance or sell the home at any point in the loan life, even the early years, without being penalized.
VA loans usually come together quickly. You’ll need a certificate of eligibility that will secure your VA entitlement, and you’ll have to provide proof of service, but other than that, the paperwork requirements of VA loans compared to FHA or conventional loans are slim.
The VA has its own minimum property requirements. They want to make sure all homes are well suited and safe for any prospective veteran dwellers. This does make the VA appraisal process more detailed than the appraisal process of conventional loans. However, with the added security, you can be that much more comfortable with your house selection.
Assumptions and Reuse
You don’t have to be a first-time buyer to qualify for a VA loan; your VA eligibility is lifelong, so long as you’re able to provide your Certificate of Eligibility. Additionally, all VA loans are assumable, as opposed to conventional loans which are not and usually come with paid-in-full requirements. So this makes selling a VA-bought home much easier.
No Private Mortgage Insurance Required
Conventional loan lenders require anyone paying 20 percent or less down to also buy private mortgage insurance. But since the VA guarantees the loan, borrowers can’t be charged for PMI unless they want the extra security.
Limited Closing Costs
In addition to closing cost limitations put in place by the VA, some closing costs, such as the VA funding fee, can be financed into your loan so you pay less at closing. Additionally, sellers are allowed to pay closing costs on a VA loan if they so desire.
620 is a standard minimum credit score requirement for conventional mortgages, but VA loan lenders are more flexible when it comes to an applicant’s credit score. Our loan officers at Low VA Rates are particularly focused on your individual situation, and we would never disqualify an applicant based on their credit score alone.
When considering the kind of VA loan to take out, you should get to know each option as best as you can. Our loan officers can explain to you in further detail, and with better financial context, what each loan will mean for you as a borrower. But here’s an overview of the different types of VA home loans:
Fixed-Rate and Adjustable-Rate Loans
VA loans with fixed mortgage rates are normally available for 15 and 30 years. Adjustable-rate loans (ARMs) are also offered by the VA. The VA also offers a Hybrid loan, which is a combination of the fixed and the adjustable rate mortgage. This loan has an initial fixed period that then transitions into an adjustable rate period. While conventional and FHA loans also offer these types of loans, the VA, in order to prevent abuse of the borrower, has regulations in place that limit rate adjustments. For instance, rates cannot rise more than 1 percent every year after borrowers emerge from their fixed-rate phase.
VA Mortgage Rates & Refinancing
VA refinancing is the most efficient on the market and generally offers the lowest rates. The Interest Rate Reduction Refinance Loan (IRRRL) is our specialty here at Low VA Rates and a favorite refinance option among veteran homeowners. It’s also known as the VA streamline refinance, meaning it re-uses all former paperwork and doesn’t require your home to be reappraised. The VA designed the IRRRL to benefit the borrower rather than the lender, meaning the loan can only be approved if it actually does lower the borrower’s interest rate. The IRRRL can also be completed with 100 percent financing. To qualify for the IRRRL, you must be current on your original mortgage. No cash-out is allowed during a streamline refinance. However, there is a VA cash-out refinance option that will allow you to put aside some extra money for medical bills or schooling. To learn more about VA refinancing options and the benefits that come with them, visit this page.
Fluctuating mortgage rates and turbulent political times should not give any veterans cause to fear. It’s still very likely that a VA home loan is the best option for you and your family. Set up an appointment with one of our loan officers at 855-223-0705, or visit our website to learn more about current VA loan rates and how we can help you get the most affordable mortgage.