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6 Tips to get the best VA mortgage rate

6 Tips to get the best VA mortgage rate
Written by Publishing Team

Who has the lowest VA mortgage rates?

VA loans usually have very low rates compared to other types of mortgages. So do you still need to shop for the lowest VA mortgage rates? definitely!

According to a federal regulator, comparison shopping for your mortgage can save you several thousand dollars. Nowadays, getting quotes from multiple lenders can be quick and easy.

If you want to find the lowest VA mortgage rate and save on a home loan, here’s what to do.

Start shopping for VA mortgage rates (January 20, 2022)

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Average prices for your price

It is true that VA mortgage rates are lower than most other types of loans on average. But average rates are only useful for “average” borrowers – and it may not be you.

For example, your credit score may be higher or lower than most. Or you could owe more or less than average in current debt. Or maybe you want to make a down payment, even if you don’t have to.

Each of these things (and others) can affect your loan options and your mortgage rate. And you will find the best mortgage deal for you with a lender who is comfortable working with a borrower like you.

6 Tips for finding the lowest VA mortgage rates

1. Shop

As we have already said, shopping among the lenders can be the best way for you to get to the lowest possible mortgage rates. But how many lenders should you deal with?

Freddy Mac (a huge name in the mortgage industry) did some research to find out. She stated:

“Our research indicates that borrowers can save an average of $1,500 over the life of the loan by taking one additional quote and an average of about $3,000 for five quotes.” – Freddy Mac

These were averages for conventional loans. And when it comes to government-backed mortgages, there may be a smaller difference between the two lenders. But still, getting quotes from just three to five lenders can save you a significant amount of money over the life of your loan.

Not sure how mortgage rates (aka loan estimates) compare? Learn everything you need to know at: How to Shop for Mortgage Rates and Compare Prices

2. Don’t automatically commit to a familiar lender

You may refinance an existing VA loan or borrow again to purchase a different home. And you may be very happy with your current lender. But that doesn’t mean you should skip comparison shopping, for two reasons:

  1. Your money has changed – Let’s say things have been easier since you bought your home and your credit score is now higher. Or times were tough and they broke down. A different degree (or any other factor that makes up your borrower profile) may mean that your current lender is no longer the best fit for you
  2. Your lender may change Most lenders go through phases of more or less competition. Sometimes, the mortgage market has changed. or its business model. Lots of things can mean that the lender that was the best last time is no longer

Of course, you should still request a quote from your current lender. But stick with it only if it offers the best deal compared to other quotes.

Start shopping for VA mortgage rates (January 20, 2022)

3. Beware Recommendations

You may have a friend with a VA loan who thinks the lender is best. By all means, ask the lender for a quote. But ask plenty of others, too.

Like we said above, your personal finances have a huge impact on your mortgage rate. These may be very different from someone who recommends a lender to you. So the company that offered the best deal might not be your best bet.

4. Negotiation

Quotation is only an estimate. It is not carved in stone.

You can always contact the lenders to try to reduce the rate or costs of the loan. And feel free to make the lenders compete with each other: “I would like to go with your company but with the lender x Send me a loan estimate at a lower rate. Please do you want to match it? “

Or maybe the rates are similar but the cost of the loan is higher. You may be able to get your preferred lender to lower their fees.

According to John Mayer, a mortgage loan expert and MLO licensee, closing costs are “the best thing to negotiate, while rates can be more difficult.”

Again, negotiate the best deal using other lenders’ quotes as leverage. And continue to use this leverage until you are sure that you will not be able to make more savings.

6. Get in your financial shape

You are likely to get a better deal than otherwise if you work on your money in the months before applying for a mortgage or refinance. You can make yourself a more attractive borrower and earn a lower rate by:

  1. Boost your credit score – Read How to raise your credit score quickly
  2. Reduce your current debt Do everything you can to reduce debt burdens, especially credit or store credits. And don’t take on any new debt or credit cards before closing your home loan
  3. Increase your savings Lenders are like borrowers with emergency funds
  4. Stick to your current job Changing a job before closing can affect your eligibility and jeopardize your mortgage approval

You are unlikely to be able to do all of those at the same time. But sometimes it’s surprising how small improvements can lower the mortgage rate you have to pay.

What to look for in a VA lender

Obviously, the first thing you’ll look for is the best overall deal. This means a lower mortgage rate and lower closing costs.

How you balance these will depend on your circumstances.

If you’re short on cash, you may be willing to pay a slightly higher mortgage rate and keep closing costs low. But, if you have a lot of money, you may not bother with closing costs and can focus on the long-term savings that a lower rate should generate.

Don’t realize that some lenders are more stringent than others when it comes to lending standards. We’ve found that VA mortgage lenders require credit scores as low as 550 and as high as 640. So, if your score is an issue, exclude lenders with high credit limits.

But it’s not just about dollars and cents. Because you also want an efficient and trustworthy lender.

After all, there is no point in getting a low rate if you end up losing your dream home because the lender has been too slow and incompetent to deliver your loan on time.

So check out the lenders on your shortlist to see the average scores their clients give them on online consumer review sites. You can search for them on the Better Business Bureau website to find their BBB rating. Finally, do another search in the Consumer Financial Protection Bureau (CFPB) consumer complaints database.

One warning. Don’t read too much into individual complaints. Every organization has huge numbers of clients which inevitably alienate some. So focus on the numerical outlook rather than the occasional bad experiences.

VA Mortgage Rates FAQ

What lender has the lowest VA mortgage rates?

It depends on your state that the Department of Veterans Affairs does not regulate mortgage rates; Instead, they are set up by individual lenders. Each has its own rate determination equation. So you can just find the cheapest lender for you by shopping and getting multiple quotes.

Are VA interest rates lower than conventional?

Yes. For years, Ellie Mae (now ICE Mortgage Technology) has released a monthly Origination Insight showing that VA loans have consistently and significantly lower rates than traditional mortgage loans and FHA loans. This is one of the reasons why VA loans are the best choice for veterans and eligible service members.

Are there closing costs on a VA loan?

Yes. VA closing costs include lender fees, appraisal fees, discount points, processing fees, and various fees for third-party services. There is also a one-time VA financing fee that technically accrues at closing, but most borrowers put it down to the loan amount so they don’t have to pay up front.

How do I shop for VA mortgage rates?

All you have to do is request quotes from several lenders. You can find lenders with low advertised rates online, ask friends for recommendations, and ask your bank, credit union, and/or current mortgage lender (if you have one). The more you get, the better your chance of finding the lowest price. It won’t take long. And the hours you spend can be the most profitable of your life.

Are you ready to start applying for a VA loan?

Experts recommend hitting a minimum of five bids to find the best deal. And if you can get more, that only improves your odds.

You can start here.

Check the new price (Jan 20, 2022)

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