Can The VA Get Me The Best Mortgage Interest Rate?

By Ann White

In 1944 President Roosevelt signed into law the GI Bill. Among other provisions was a reduction in requirements for veterans to own a home. In providing VA-eligible borrowers with home ownership opportunities, banks and lenders alike are provided with a new population segment of Americans that can get the best mortgage interest rate available.

VA mortgage benefits

Among the several VA mortgage benefits are no down payment, less income requirement, no monthly mortgage insurance, no prepayment penalty, and ability to get the best mortgage interest rate in the industry.

On average for a $200,000 home, the reduced interest rate alone saves hardworking veterans over $200 per payment. Plus, VA best mortgage interest rate benefits save over $10,000 on closing costs.

How much lower are the VA mortgage interest rates?

Banks establish interest rates based on the probability the loan will go into default. Due to the VA loan being backed by the federal government, banks recognize less risk associated with these mortgages. Hence, banks offer VA mortgages at a lesser fraction of a half percent and even up to a full percentage point.
If the current best rate available to the general public is 4.15%, then a VA mortgage could be obtained at 3.15%. Over the length of the loan, this single percentage point will save the homeowner thousands of dollars.

Original Principle Balance (OPB)

Veterans of the US military are welcomed home in several honorable ways. Not the least of which is their eligibility to receive mortgages in high cost areas. VA mortgages allow an original principle balance of up to $729,000. The OPB is extraordinarily beneficial to personnel who otherwise may not qualify the best mortgage interest rate.

Related posts:

1. How Do Interest Rates For VA Loans Compare To Rates For FHA Loans?
2. What Is A Mortgage Interest Rate?
3. Will The VA Assist Me In Getting The Best Mortgage Interest Rate?
4. Should I Get My Mortgage Through The VA If I Am A Veteran?
5. Why Is The APR Different From The Interest Rate On My Home Mortgage?