You’ve decided that using your VA home loan benefit is a good thing. You want a competitive loan program with no money down with low closing costs as well. That said, you’ve just described a VA loan. But once you make that decision, you also want to get the best rate available. How can you reach that goal?
First, interest rates aren’t set by the VA; they’re set by each individual VA mortgage lender. And that’s a good thing. It’s important for VA lenders to compete with one another for their business and the more competition there is for your business, the lower rates can be. But it can be a confusing process, shopping for mortgage rates. How can you find a good deal and what are some tips when getting mortgage quotes?
Decide and Don’t Budge
Before you start your rate shopping journey you must first decide on the loan program you want quoted. There are multiple VA loan options from hybrid ARMs to 30, 25, 20, 15 and 10 year options. Each with separate rate and point combinations. It’s impossible to get a lender’s best rate if you’re comparing a 30 year loan with a 5/1 hybrid.
After you select your loan type, get quotes from a lender with the same amount or points. Or even no points at all. Whichever you choose, make sure lenders are quoting the same product.
Lenders offer rate guarantees called locks. The longer the lock, the more expensive a rate can be. When getting quotes, ask for the same lock period.
Get a quote on lender fees that you’re allowed to pay such as origination fees, credit, appraisal and other allowable charges.
Get your rate quotes with a phone call. Rates on the internet or the newspaper are outdated. You need real time information.
Now put all that together. Pick up the phone and at the same time of day, make your phone calls. Your question is, “Give me your best 30 year fixed rate with no points good for a 30 day period on a loan amount of $250,000 and my credit is excellent.” You’ve just leveled the playing field. Now you can truly compare apples to apples.