VA Loan rates work like any other type of mortgage interest rate. They are subject to fluctuations in certain indexes such as the LIBOR (London Interbank Offered Rate) along with trend changes in certain markets. No matter what happens with a VA mortgage interest rate, qualified borrowers receive the prime rate. This rate is the best possible rate a borrower can obtain, and it usually hovers around 3.5 to 4 percent per loan. These types of rates are unheard of with conventional loans.
How the Rates are Set
Many years ago it was the sole responsibility of the Department of Veterans Affairs to set the interest rates on their mortgage loan programs. Today, economic forces as described earlier determine the prime rate. No matter how the VA rates are set, they are far lower than conventional mortgages. In order to obtain the prime rate on a conventional loan, you must have flawless credit, a low debt-to-income ratio and plenty of money to put into the loan in the form of a down payment. That type of criterion does not exist with VA Loans, as the guidelines set forth by the VA are quite easy to meet. Either way, the lender who is offering the VA Loan will provide a weekly rate sheet that outlines the current prime rate and what you can expect to receive when your loan closes and funds.
Using MortgageDepot for Guidance
Our mortgage professionals will break down how loan rates are locked-in into simple terms. We provide professional guidance that gives you the comfort you need if you are unfamiliar with how VA Loans work. The smooth transition makes purchasing or refinancing your existing loan far easier than trying to work with lenders who are trying to sell conventional loans.
To find out more about the VA loan rates, you can contact us. We are a reputable mortgage broker in the New York area that is ready to help you with any of your mortgage needs.