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Lender offered me 5.25% on a VA 0% down in eastern WA. But I hear current rate is below 5. What is r

What is real current rate on VA loan?
  • September 02 2009 - Nevada-Lidgerwood
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Answers (5)

The VA rate depends on several factors.  Credit score, loan amount, and the state come into play for investors on their pricing.  Also, there's been a tremendous amount of volatility in the market so rates move pretty quickly. The biggest thing you need to look at are points as well.  You can get that rate down buying points but that's not usually a good deal but it is something to consider.  I just pulled up rates this morning and zero points on a VA closing in 30 day for WV is 5.125%. 

Josh Klenda
VA Loan Expert
  • September 04 2009
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drt299 - the counter-offer on the home is really something completely separate from whether you should be paying points to buy down the interest rate.

Do you have a real estate agent representing you or did you go straight the agent who is selling the home?

IF you have enough cash to buy down the rate it is simply a mathematical equation - take the upfront cost of the points to get the lower rate (let's just say $1,500 for an example) and then divide that by the monthly savings you will  realize by having the lower rate.  If that monthly savings is only $5 then it would take you 25 years to "earn" back that investment.  If you were saving $50 per month then it would be less than 2 years to break even.

All this assumes you have the $1,500 extra cash to buy down the rate.

So, you really need to find out how much upfront money it will take to get the lower rate and then calculate the monthly savings. Your lender should be able to provide this.

Mike
  • September 03 2009
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 A house I'm looking at is Spokane was last counter-offered at 150k. I guess it may variy by lendor but what's the rundown on buying points?
I've had a few people tell me I should get below 5% before signing the deal..  (I'm a first time buyer)
  • September 03 2009
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drt299 - Gregorio is correct.  To reiterate his comment - there is no "real" VA rate. Each lender and loan officer can offer whatever their policies or profit margin dictates.  Obtaining a rate under 5% would probably cost you some extra money but may be worth it in the long run.

I published a 4 part series in our local newspaper on how lenders determine the rate you (the consumer) pay. You can see the articles at Spokane Homes Blog.

If you have any other specific VA loan questions or how your specific scenario may impact the rate you pay I'd be happy to answer it.
  • September 03 2009
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There is no "real" rate, it can differ based on many factors. 5.25% may be a good rate depending on what the loan amount, credit score and fees are. 5% could be a terrible rate based on the same factors. Provide more information to get a better analysis. 
  • September 02 2009
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