November 15, 20235-minute read
Author: Andrew Dehan
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VA loans help military service members, veterans and their families buy homes. Often, they have more favorable terms than conventional mortgages, including no down payment and better interest rates. Are you considering a VA loan for your next home purchase? Keep reading to see the current VA mortgage rates, along with some additional information on how to qualify for this type of government-backed loan.
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What Are VA Mortgage Rates Today?
To view the most up-to-date 30-year fixed VA mortgage rate, please visit our mortgage rates page where you can view the purchase and refinance rates for VA loans.
VA Loan Overview
A VA loan is a type of non-conforming mortgage that’s guaranteed by the Department of Veterans Affairs and designed to help those with military service histories buy homes at better rates than conventional mortgages. The loans are issued by private lenders like local banks, credit unions and Rocket Mortgage®. Unlike conventional mortgages, not everyone is eligible to apply for a VA loan. Only qualified veterans, active-duty service members, current and former National Guard and Reserve members and their surviving spouses are eligible for a VA loan. If you’re interested in taking out a VA loan, you’ll first need to apply for a Certificate of Eligibility (COE) through the U.S. Department of Veteran Affairs. This will show your lender that you qualify based on your service history. You can apply for a COE online or by mail. Once you’ve obtained your COE and qualified for a VA loan, you’ll also need to ensure that the property you’re looking to buy can be purchased with a VA home loan. There are certain restrictions on the types of property you can purchase with a VA loan to ensure that current and former service members are living in homes that are safe and sanitary. Some of the requirements for VA loans include: Additionally, the home you purchase with a VA mortgage must be purchased as your primary residence. VA loans aren’t available for vacation homes or rental properties.Proving Eligibility
The Property Must Meet Minimum Requirements
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Who Sets VA Home Loan Interest Rates?
While the Department of Veterans Affairs regulates and guarantees VA loans, it doesn’t set VA mortgage rates. Instead, each VA loan lender sets its own rates. Because each lender sets its own rates, they’ll view your application in different ways. One may offer you a low interest rate while another may offer you a significantly higher rate. The best way to see a lender’s current rates is to seek mortgage preapproval from them. This will give you an idea of what interest rate you might be eligible for and can make it easier to compare different VA mortgage interest rates from different lenders.
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How Are VA Home Loan Rates Determined?
Mortgage rates can fluctuate often, and the rate that one borrower is eligible for may not be available to someone else. There are several external factors that affect mortgage rates, including the current state of the economy and actions taken by the Federal Reserve. There are also internal factors that affect a borrower’s interest rate. One of the most important factors is a borrower’s credit score. Generally, borrowers with credit scores above 740 are eligible for the best rates. Other personal factors that affect your mortgage rate include your debt-to-income ratio (DTI) and the size of your down payment. While VA loans don’t require a down payment, borrowers may qualify for a lower rate if they choose to put down some money upfront. Additionally, while VA loans usually require a DTI of 41% or less, borrowers with lower DTIs may be eligible for the best VA home loan rates. Finally, the loan term you choose will impact your VA loan. In general, 15-year loans tend to offer lower interest rates than 30-year loans.
VA Home Loan Vs. Conventional 30-Year Fixed Mortgage Rates
A conventional mortgage – the most common type of home loan – isn’t backed by a government agency and is open to everyone regardless of their military service history. Like VA loans, conventional mortgage requirements are set by the lender and can vary based on your credit score, down payment amount and debt-to-income ratio. However, most qualified current and former military service members are able to get a better interest rate on a VA loan than a 30-year fixed-rate mortgage. When you compare a VA loan to a conventional loan, you’ll see that VA home loan rates tend to be between 0.25% and 0.42% lower than conventional mortgages. The lower your interest rate is, the more money you’ll save over the life of the loan.
Pros And Cons Of VA Home Loans
VA home loans come with serious advantages to eligible borrowers, but they’re not without their downsides. Here’s what you need to know so you can choose the right type of home loan for your needs:Pros
Cons
FAQs About VA Mortgage Rates
Now let’s go over some of the most frequently asked questions about VA mortgage rates. VA mortgage rates are usually between 0.25% and 0.42% lower than conventional loan rates, which is why eligible borrowers are typically able to obtain a better rate with a VA loan than a 30-year fixed-rate mortgage. A VA Streamline refinance is a simple refinance loan that allows VA loan borrowers to replace their home loans with a new one, often with a lower interest rate or more favorable terms. These loans are called “Streamline refinance” loans because they’re faster and require less paperwork than a traditional refinance loan. Yes, mortgage lenders set their own rates for VA loans. After receiving mortgage preapproval from various lenders, you can view the interest rates from each lender and compare them to find the best VA mortgage rate. While VA loans often come with favorable interest rates, the best rates are ultimately available to borrowers with good credit scores. One of the best ways to increase your chances of a low rate is to build up your credit before applying.Are VA mortgage rates better than conventional loan rates?
Can I lower my interest rate by refinancing my VA loan?
Does my lender set my VA mortgage rate?
How can I get the best VA loan interest rates?
The Bottom Line: VA Loans Come With Lower Mortgage Rates
VA loans offer a simple and affordable solution to help military service members, veterans and their spouses buy homes. They come with plenty of perks, including no down payment and lower mortgage rates than conventional mortgages. If you’re eligible for a VA loan, get preapproved today to see your rate.
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I Want To Buy A House I Want To Refinance
As an expert in real estate financing, particularly in the context of VA loans for military service members and veterans, I can confidently break down the concepts presented in the provided article by Andrew Dehan.
VA Mortgage Rates Today: The article discusses the current VA mortgage rates and emphasizes the favorable terms that VA loans offer compared to conventional mortgages. It mentions the absence of a down payment requirement and better interest rates.
VA Loan Overview: The article introduces VA loans as a type of non-conforming mortgage guaranteed by the Department of Veterans Affairs. It is designed to assist individuals with military service histories in purchasing homes at better rates than conventional mortgages. The loans are issued by private lenders, including local banks, credit unions, and specifically mentioned, Rocket Mortgage®.
Proving Eligibility: To qualify for a VA loan, the article highlights the need to apply for a Certificate of Eligibility (COE) through the U.S. Department of Veterans Affairs. This certificate demonstrates eligibility based on the individual's service history.
Property Requirements: The article outlines specific property requirements for VA loans, ensuring that homes purchased are safe and sanitary for current and former service members. Requirements include safe mechanical systems, proper heating, a well-maintained roof, dry basem*nts and crawl spaces, absence of termite infestations, addressing lead-based paint, and ensuring the property is free of mold and severe structural defects. Additionally, the purchased home must be the primary residence.
Setting VA Home Loan Interest Rates: The article clarifies that while the Department of Veterans Affairs regulates and guarantees VA loans, it does not set the interest rates. Individual lenders set their own rates, leading to variations in how applications are assessed. It suggests seeking mortgage preapproval to compare different VA mortgage interest rates from various lenders.
Factors Affecting VA Home Loan Rates: External and internal factors affecting mortgage rates are discussed. External factors include the state of the economy and actions taken by the Federal Reserve. Internal factors include credit score, debt-to-income ratio (DTI), and the size of the down payment. While VA loans do not require a down payment, putting money upfront may qualify borrowers for lower rates. The article also notes that the chosen loan term (15-year vs. 30-year) impacts the interest rate.
VA Home Loan vs. Conventional Mortgage Rates: A comparison is drawn between VA home loan rates and conventional 30-year fixed mortgage rates. VA home loan rates are stated to be between 0.25% and 0.42% lower than conventional mortgages, making them more attractive for eligible borrowers.
Pros and Cons of VA Home Loans: The article presents the advantages and disadvantages of VA home loans. Pros include low interest rates, easy-to-meet requirements, no down payment, no required primary mortgage insurance, ability to refinance, and accommodating DTI requirements. Cons involve strict eligibility criteria, limitations on property use (only for primary residences), closing costs, the VA funding fee, and potential challenges in finding lenders offering VA loans.
FAQs About VA Mortgage Rates: Common questions are addressed, including whether VA mortgage rates are better than conventional loan rates, the possibility of lowering interest rates through VA Streamline refinancing, and the influence of lenders on VA mortgage rates. Building a good credit score is recommended to secure the best rates.
The Bottom Line: VA Loans Come With Lower Mortgage Rates: The conclusion emphasizes that VA loans provide an affordable solution for military service members, veterans, and their spouses to buy homes with perks such as no down payment and lower mortgage rates compared to conventional mortgages. The article encourages eligible individuals to get preapproved for a VA loan.