Tuesday, June 19, 2012

Are VA Loan Rates the Same as Conventional Rates

By Shauna Zamarripa

Home loan interest rates are determined by the rate charged on mortgage-backed bonds or securities. This sets the current market rate for the mortgage industry, and serves as the baseline for setting both VA and conventional home loan rates.

The market rates for conventional loans and VA loans are always the same. However, VA loan rates are not credit-score driven, whereas conventional loan rates are. On a conventional loan, the better a borrower's credit score, the better the rate. Conversely on a VA loan, the market rate is typically the standard.

When comparing VA and conventional home loan interest rates, buyers should also find out about buying interest rates down. Both conventional and VA buyers can buy a market rate down with additional upfront capitol, reducing their payment.

VA loan products are not available to all consumers. Only veterans who are active duty, retired or honorably discharged service members are eligible for VA loans. Consumers who are not a member of these categories must seek out conventional or FHA loan products when shopping for a home loan.


http://www.lenderva.com

No comments:

Post a Comment