What are VA Mortgage Rates? Veterans Affairs (VA) loans are mortgages backed by the US Department of Veterans Affairs for people who have served or are retired in the military and their spouses.
There are several benefits to a VA loan over other types of mortgages, such as lower interest rates, more credit and down payment options, and the absence of the need for private mortgage insurance.
Here’s what you need to know about the current VA mortgage rate trends if you want to use the benefits of a VA loan.
Rate trends for VA loans right now
As the Federal Reserve raised its benchmark interest rate over and over to bring down inflation, mortgage rates rose at the fastest rate in thirty years in 2022. Even though rates are going up quickly, VA loans usually have lower interest rates than regular loans. There were a lot of VA loans with rates in the high 7% range in October.
Current mortgage and refinance rates
| Product | Interest ra0te | APR |
|---|---|---|
| 30-year fixed-rate | 7.73% | 7.75% |
| 30-year fixed-rate FHA | 6.66% | 7.57% |
| 30-year fixed-rate VA | 6.74% | 6.85% |
| 30-year fixed-rate jumbo | 7.79% | 7.81% |
| 20-year fixed-rate | 7.60% | 7.63% |
| 15-year fixed-rate | 7.02% | 7.06% |
| 15-year fixed-rate jumbo | 7.09% | 7.11% |
| 5/1 ARM | 6.85% | 8.01% |
| 5/1 ARM jumbo | 6.76% | 7.91% |
| 7/1 ARM | 7.15% | 8.09% |
| 7/1 ARM jumbo | 7.03% | 7.94% |
| 10/1 ARM | 7.62% | 8.09% |
The Federal Reserve may be done raising interest rates, but that doesn’t mean that mortgage rates will go down right away, according to experts. Even though rates are likely to stay low for a while, inflation is still too high. Because of this, mortgage rates are likely to stay high until at least 2024.
What are VA Mortgage Rates?
The US Department of Veterans Affairs backs VA loans, which are mortgage loans. They are only available to people who have served in the military and are buying their first home. While the VA is not the lender, it does protect the loan in case the borrower doesn’t pay it back.
VA loans don’t need a down payment, but you may have to pay a VA funding fee. This fee can be anywhere from 1.4% to 3.6% of the loan, depending on how much you put down and whether you’ve had a VA loan before. That fee can be added to the loan amount, which will save you money in the short term but cost you more in the long run. However, some people will not have to pay the VA funding fee. This page lets you check to see if you’re exempt.
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Who is able to get a VA loan?
You must ask the VA for your Certificate of Eligibility (COE) through the administration’s eBenefits portal in order to find out if you are eligible for a VA loan. The following are the general requirements that a borrower should meet in order to be eligible:.
People who are currently in the military and have been for at least 90 days
People who served for at least 90 days straight in peacetime or 181 days straight during wartime. You might still be able to get a VA loan with fewer days if you were put on disability leave because of your service.
People who were in the National Guard and served for 90 days on active duty or six years and then got an honorable discharge
Those whose husbands or wives are missing in action, prisoners of war, or who died in service or from a disability related to service
You can look at the VA home loan eligibility list to see if you’re sure you qualify.
A VA mortgage is easier to get than a regular loan, as with other government-backed loans (as long as you meet the requirements for military service). Different lenders have different credit score requirements, but the VA doesn’t have a set minimum credit score.
30-year fixed loan vs. VA loan
A VA loan isn’t the only way to pay for a house, even if you are a veteran or active-duty service member who meets the requirements. You can also look at loan types like conventional and FHA, which have different rules and fees. Most of the time, VA-backed loans have lower interest rates and less strict credit requirements. Here is a list of the different kinds of mortgages:
Find out how to get a VA loan.
1. Get your certificate of eligibility (COE). You can get your COE through the VA’s eBenefits portal before you can officially apply for a VA loan. Call 877-827-3702 to talk to a federal home loan specialist if you have any questions. The call center is open from 8 a.m. to 6 p.m. ET, Monday through Friday.
2. Know how much you can borrow. Some people can borrow more than the VA loan limits. There is no loan limit for people who are buying their first home or who have paid off a previous VA loan and sold the home. However, there is a limit based on the county where you want to buy if you have had a VA loan before or are still paying one off.
Third, get preapproved. A letter from your lender stating that you are preapproved will show sellers that you are a qualified buyer and can help you get ready to make an offer on a home. You might be able to get help from a real estate agent with this.
4. Look at more than one lender. Each lender is different, and some companies offer VA borrowers special deals. Look at more than just interest rates. For example, you could find deals on appraisal and lender fees.
5. Get the house appraised. The VA’s appraisal standards are a bit stricter than those for a regular loan, so you might not be able to buy a house that needs work. It will need to meet a certain set of property requirements.
Pay the closing costs and sign the loan documents. Once the lender has officially approved your loan application, you’ll need to close on the loan.
What factors affect the rates for VA loans?
A VA loan interest rate is based on a number of the same things that affect all home loans. These include your credit score, the size of your down payment, and the amount of debt you have compared to your income, to name a few. The economy as a whole, including inflation and the Federal Reserve’s recent rate hikes, also has an impact on VA loan rates.
Each lender looks at your finances in a different way. You can get the best loan by looking at what different lenders are offering.
How do I get the best rate on a VA loan?
Like with any other home loan, it’s important to compare mortgage rates from different lenders to get the best deal. You have a better chance of finding a lower rate if you talk to more lenders. Freddie Mac says that people who want to buy a house can save thousands of dollars over the life of their loan by getting several quotes.
Pros
When you get a VA loan, you don’t have to put any money down. This is different from most other types of home loans that require a down payment.
You don’t need as good of credit to get a VA loan. Most conventional loans require a credit score of 620, but some lenders will accept scores lower than that.
Loans with VA loans usually have lower interest rates and APRs than loans with other types of debt.
There is no need for mortgage insurance: For VA loans, you don’t need private mortgage insurance, no matter how much of a down payment you make. On the other hand, you have to pay PMI on conventional loans until you have 20% equity in the home.
Cons
VA loans have strict requirements. If you are not an active duty service member, a retired service member, or the spouse of a service member, you probably won’t be able to get one.
VA funding fee: This type of loan has a one-time funding fee that other loans don’t have.
Most of the time, you can only use a VA loan to buy a primary residence. You can’t use it to buy a second home or an investment property.
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