VA Home Loan Interest Rates in 2024
Mortgage interest rates for VA home loan fluctuate based on market conditions, just like other types of home loans. So far in 2024, VA loan rates have held pretty steady in the high 5% to low 6% range on average. However, experts anticipate rates could continue rising in 2024 based on actions by the Federal Reserve to control inflation.
The good news is VA loans offer fixed-rate mortgages, so once you lock in a rate it stays the same for the life of the loan. This protects borrowers against future rate volatility. And VA loans typically have slightly lower rates than conventional loans thanks to their guarantee which reduces risk for lenders. So while 2024 rates may rise, VA loans will likely retain good competitive pricing.
VA Loan Benefits: Why Choose This Option?
The VA home loan program offers a range of attractive benefits that make it an appealing choice for eligible borrowers. Here are some of the key advantages:
No Down Payment Required: Unlike conventional mortgages, VA loans do not require a down payment, enabling borrowers to finance 100% of the home's purchase price. This can be particularly advantageous for those with limited savings or facing challenges with large upfront costs.
No Private Mortgage Insurance (PMI): Conventional loans typically require borrowers to pay for private mortgage insurance if their down payment is less than 20%. VA loans, however, eliminate the need for PMI, resulting in significant cost savings over the life of the loan.
Competitive Interest Rates: As mentioned earlier, VA loan interest rates are often lower than conventional mortgage rates, making homeownership more affordable for service members and veterans.
Begin the Process
To fully utilize your VA home loan entitlement, start by getting pre-approved. This establishes what loan amount, interest rate, and payment to expect upfront. Then shop loan estimates from multiple lenders to ensure finding the best rate. Complete any pre-approvals well before actively house hunting to avoid disappointment.
Gather required financial documentation for underwriting like tax returns, bank statements and pay stubs. Also, request your Certificate of Eligibility by submitting form DD-214 to a lender or the VA. This certificate confirms your eligibility and available entitlement amount.
Once pre-approved, browse listings either independently or with a VA-approved real estate agent. Since VA loans don't require down payments or PMI, having that pre-approval expands budget power tremendously. If possible finance the funding fee into the loan to avoid an upfront cost.
When an accepted offer occurs, the lender submits the VA home loan guaranty request and finalizes underwriting. With automatic processing, loans generally close much faster than standard loans.
Maintain the Property
VA lending requires homeowners to commit to using the property as a primary residence as long as any VA debt remains. This protects the integrity of the program. However, occasional short-term rentals or deployments do not cause issues as long as maintain residency intent.
Defaulting does place the borrower's VA eligibility at risk for future loans and could trigger legal action by the VA. Keeping payments current avoids these problems and maintains access to further affordable lending entitlement if transferring or upgrading homes later in life.
Refinancing Options
Once a few years with strong payments pass, consider refinancing the VA loan to future lower rates if available. With no prepayment penalties, borrowers enjoy maximum flexibility. Refinancing may fold the funding fee into a new loan to free up cash flow too. Subsequent Interest Rate Reduction Refinancing Loans don't require a funding fee.
So in summary, eligible veterans can tap exceptional long-term benefits and tremendous purchasing power through the VA home loan program. With prudent shopping and adherence to simple obligations, VA lending keeps the American dream within reach.
