Va Loan Rates

Honorably discharged veterans have a distinct advantage when they are looking for financing or refinancing a home. Their honorable service qualifies them for government backed VA loans that have excellent rates today. VA loan rates have always been advantageous for qualifying veterans, with rates as low or lower than the best conventional mortgages for persons with good credit.

Today, VA loan rates are very beneficial for veterans or their surviving spouses who have not remarried. The interest rates are well below 5%, at 4.25% with 1.32 points. This equals an APR rate of just 4.54% for veterans. The VA loans are guaranteed by the federal government, and are fixed rate loans that veterans can get into with a small down payment or no money down. In addition, there is no PMI (private mortgage insurance) requirement for veteran loans. With the VA loans, veterans can finance up to 100% of the home up to $417,000. For homes costing above that amount, the veterans must provide the balance in cash at closing.

To qualify for low VA mortgage rates, veterans must have been honorably discharged. Veterans of the National Guard who have served at least six years also are eligible, as are surviving spouses who never remarried. Not requiring PMI insurance lowers monthly payment amounts. Sellers are allowed to assume closing costs, but build those into the final sale price of the home. VA loans are only available for homes that are occupied by owners. Credit history checks should be considered for just the most recent 12 month period for veterans. Long lasting adverse credit record reports of things like bankruptcies or liens may impact the approval decision.

One drawback is the time it takes to process these loans, so realtors may not want to suggest them over other products, but there are ways the veteran can speed up the paperwork process by obtaining their certificate of eligibility in advance. Besides documentation, VA loans require close appraisal and inspection of homes. VA loans are offered through many local mortgage bankers and banks. Even though they may take a little longer to complete, the terms of a VA loan are so favorable the delays are worth it.

The same advantages apply to VA refinancing loans, which have no closing costs for veterans and are streamlined because veterans can skip some paperwork like income documentation and appraisals. A funding fee is rolled into the mortgage, and it is only 0 to 3.3% of the loan amount.

VA loans are not allowed to be used for certain loans like interest-only and home equity line of credit (HELOC) loans. Cash back at closing is also disallowed for new home mortgages. Cash-out refinance loans up to 90% are an option with refinancing. Veterans cannot get a HELOC loan, but they can obtain home equity loans up to 100% of the home’s value.

With conventional mortgage rates for persons with good credit reaching new lows of 4.625% to 5.05%, the VA loan rates for veterans of 4.25% (4.54% APR) are very beneficial for veterans. They are a special class of borrowers who can obtain government backed VA loans as one measure of appreciation for their valuable service to the United States.