VA Loan Rates

FHA loans require a down payment, and you must pay monthly mortgage insurance.  Unlike Conventional loans, no matter how much you put down—even if it’s 20%--you still pay monthly mortgage insurance.  There’s reasons someone might do this, but if you’re eligible for the VA Loan, there’s no reason.  VA Loans are better.

How Do VA Rates Compare?

CLICK HERE for today’s California VA Loan Rates

It’s the big question.

Remember, for the best rates, Conventional loans require a 20% down payment for the best rate, and a FICO score of 740+;  FHA loans require a 3.5% down payment and a FICO score of 720+.  VA loans require 0 down payment.

On the date compared, here’s how the rates stacked up with 0 points and excellent credit*

	Rate	Down Payment	Monthly MI
Conventional	3.625%	20%	No
FHA	3.250%	3.5%	Yes
VA	3.250%	0%	No

*comparison only; not current rates; based on purchase loans; refinance rates can be different

Shopping for VA Mortgage Rates:

Shopping for the lowest VA Mortgage Rates can be challenging, and maybe just a little confusing.  The reality is that the rates that a loan company advertises are really only good for that date and time that’s quoted.  The challenge with getting the advertised rates is two-fold:

1.  Loan Rates* (for VA Loans, Conventional Loans & FHA Loans) are determined in the mortgage bond markets (similar to the stock market) and are based on what bond buyers’ are willing to pay for a particular mortgage bond at that point in time.  Some days, the bond price stays fairly stable and prices/rates stay the same.  Other days, the prices may change multiple times in a day, creating a real problem in trying to compare rates.

Imagine you got a quote from one VA Lender on Monday; another on Tuesday; a third on Wednesday.  The markets would have moved between those days and the pricing would be different between the Lenders.  In fact, if you got a quote from the same California VA Lender on three separate days, the rate could be different each day.  Sure makes comparing a challenge.

2.  The “Perfect Borrower”.  Advertised rates are based on the perfect borrower fitting into the perfect “box”:  Those with super-excellent credit with down payments, purchasing a single-family home (no duplexes/condos, etc).  So, if your situation has you with anything that falls outside the “perfect box”, your rate would most likely be different than advertised.

 No matter how you slice it, though—and we have clients that use all of the loans we’ve discussed here—the VA Loan usually works out the best for California Veterans.  Because we have expertise in loan types in addition to the VA Loan, we can run comparisons for you.  The bottom line being, you should feel comfortable with the loan you get for your home.  If we run the options, and you qualify for, and want, a different loan program, it’s your choice.  At the end of the day, you deserve to be happy with your loan.  And the California VA Loan is a fantastic option.

If you want to discuss your options, or have more questions, just contact us by one of the means on the website.  We really want to help.

*The interest rate on the bond moves opposite from the bond price, meaning when bond prices increase, interest rates decrease, and vice-versa.  And Bond prices—in general—move opposite that of the stock market, so generally, when the stock market increases, so do rates; the stock market decreases, so do rates.  When it comes to locking/choosing a rate, you want to cheer for the stock market to be declining…opposite of what you might think.

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*https://www.apmortgage.com/disclosures