Three tips on Earning a Great Low VA Loan Rate
Not every military homebuyer qualifies for the lowest interest rate on a VA loan. Regardless, the rates on this exclusive home loan option fare better than rates on conventional loans. To earn the best possible interest rate on your VA loan, there are a few things you can do to improve your chances. Check out these tips on what you can do to get a better interest rate.
Improve your credit.
If you don't know your credit score, then it's time to check it. AnnualCreditReport.com allows you to see reports from TransUnion, Equifax and Experian. After seeing your report, you can pay to see your credit scores. This will give you an idea of how to bolster your credit. Maybe you need to pay off some debt or maintain your good standing for awhile.
Timing matters.
You'll have to keep an eye on the housing market and the Federal Reserve to see where interest rates stand. VA loans boast competitive or lower interest rates than traditional home mortgages, but watching the market is a decent indication of what you can expect. Interest rates change within the life of the loan and whether it's adjustable-rate mortgage (ARM) or fixed-rate mortgage.
Make sure you have the money.
Although the VA has no requirement on borrowers' financial reserves, VA approved lenders like to see that military homebuyers will be able to make monthly payments in addition to other expenses. Either financial reserves or an income that will cover the payments should suffice. The easier it will be for you prove and make the payments, the better interest rate you'll earn.
Talk to a VA-approved lender. An expert on VA loan rates can help you follow through with the aforementioned tips. They'll be able to help you get pre-approved for a VA loan and find out whether you're eligible. Before performing a credit report, they'll be able to tell you about the process and what affects VA loan rates.