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10/8/2009 11:14:30 AM
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pacific20
Posts 1
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Is it true that most lenders working with Federal VA loans take another .5 to 1 percent off the conventional 30 year fixed rate because it's a Federal VA loan? Meaning, if the current rate was 5%, a customer going Federal VA could get a rate of 4.5 to 4%?
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10/9/2009 10:48:26 AM
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MortgageMarvel
Posts 38
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It’s certainly possible that some lenders offer a lower rate on a VA loan than on a conventional fixed rate, but our experience is that VA rates are typically equal to or slightly above (0.125-0.250% higher rate) conventional rates. The highest value that VA brings to the market is that it is one of the few remaining programs that provides for 100% financing. If you are putting little to no money down, a VA loan may be a great option. If you’re putting enough money down to get conventional financing (5% in most cases), then you’ll want to factor the difference between the cost of mortgage insurance (required if the loan-to-value ratio is over 80.0%) and the VA funding fee into your assessment of the cost of the loan. If the VA and conventional rates are the same, the conventional program may well be cheaper, particularly as the loan-to-value ratio gets lower.
Unfortunately, MortgageMarvel.com does not provide pricing on VA loans, but many of the participating lenders offer VA loans. I would suggest you shop for conventional pricing on Mortgage Marvel. You can then use the “%” icon to conduct your same rate search on any participating lender’s site and click on the button to change the search variables. If they offer VA loans online, VA will be presented as an option under the Financing Type. If you change the Financing Type to VA and conduct another search, you can see that lender’s pricing and fees for VA loans. The VA Funding Fee is typically presented on the Total Cost pop-up.
Thanks for using Mortgage Marvel and for your inquiry!
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