Loan Information, Consolidation, and Calculators

VA Loan Rates

Written By: admin - Feb• 12•13

VA Loan Rates

The VA loan was established by the government and is guaranteed by the U.S. Department of Veterans Affairs to offer mortgage loans to American veterans. The purpose was to provide mortgage finance to qualified veterans for purchasing their primary residence and the most important benefit is that no down payment or private mortgage insurance is required for a VA loan.

This loan however, requires a 3.15 percent funding fee but at the same time, the financing guidelines allows up to 103.15 percent financing. This essentially means that the funding fee of 3.15 percent can be financed together with the purchasing loan amount. Nevertheless, it must be noted that this funding fee is waived if the applicant is receiving disability allowance.

VA funding guidelines also permits the seller to pay for the closing costs up to 4 percent of the purchase price. In addition to all this, a maximum of $6,000 is also allowed for improvements to the home. VA loan rates are also very competitive, considering the fact that it is a much riskier loan than conventional or FHA loans that requires down payment.

Who Is Eligible For A VA Loan?

As stated earlier, VA loans are for people who have served, or are still serving in the U.S. army, Air Force, Marines, Navy and the Coast Guard. Veterans who served on active duty for at least 90 days and were not been discharged for dishonorable conduct are eligible. People who are actively serving in the U.S. military with at least 180 days of service are also eligible for a VA loan. Military spouses, reserves and selected members of the National Guard can also acquire VA loans.

Qualifications For A VA Loan

Even though one might be eligible for a VA loan, this does not necessarily mean that they qualify for a VA loan. To start the qualification process, one has to show proof of eligibility by obtaining a Certificate of Eligibility from the Department of Veterans Affairs. This certificate is forwarded to the issuing lender. Some lenders also have access to obtaining and verifying this eligibility online and do not require applicants to provide a physical paper. A Statement of Service or DD214 will also be required by the lender.

To further qualify, one has to have satisfactory credit score and be able to show proof of income to support monthly mortgage payments. The loan must only be used for the purchase of the applicant’s primary residence.

What Are The VA Loan Rates?

The Department of Veterans Affairs is not a direct lender but a guarantor of VA loans. Therefore they do not set interest rates for the loans. Interest rates are determined and set by each VA approved lender so the rates might differ across board with the different mortgage lenders. A recently conducted survey of VA lenders revealed that the rates for a 30 year fixed mortgage loan are around 3.625 percent. The national average VA loan rates are currently hovering between 3.25 and 3.58 percents.

VA loan rates, like everything else can also be affected with financial market fluctuations, and have the tendency to go up or down as the financial market dictates. On the whole VA loans

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