VA LOAN CAPTAIN BLOG & Learning Center

Don’t Wait Around for Rates

By: Grant Moon 03/07/14 10:38 am

Don’t Wait Around for Rates

There can be any variety of reasons why potential VA borrowers wait before applying for a mortgage or locking in an interest rate. It might very well be that the buyers just don’t quite feel ready. And that’s a very good reason because no one should feel pushed into buying a home. It is after all a very big commitment. Or, borrowers can wait until they get settled in their new jobs or new communities. Sometimes future buyers like to get a feel of an area before setting down more permanent roots with a home purchase. But if the reason for waiting is because you want to see what rates are going to do, that may not be your best option. Why is that?

Because you could be wrong, that’s why. And when you’re wrong with interest rates, it affects more than you might initially think. All too often, the emphasis both by VA lenders and potential borrowers is on the rate. And that’s understandable because how else can a VA lender advertise how competitive they are? But the rate is more than a number, it represents your monthly mortgage payment.

Your mortgage payment, which includes an amount for property taxes and insurance along with your other monthly obligations determines how much you can borrow. The rate and the term of the loan is used along with your loan amount to determine how much you can afford. If rates go up, your payment goes up along with it. And sometimes the rate can increase to the point that you can no longer afford the property you wanted to buy. By waiting unnecessarily, you’ll have to wait to see if rates ever go back down, borrow a less expensive house or come in with a down payment. If you’re on track to buy a home and in a situation to lock in your rate, take advantage of what’s available today. Waiting can cause more problems than not waiting.

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