Compare Mortgage Rates on VA Loans
If you or your spouse served in the military, that service probably comes with a serious perk: access to VA loans, or loans backed by the U.S. Department of Veterans Affairs (VA). This kind of loan comes with major benefits like the ability to put $0 down.
If you're eligible for a VA loan, it's definitely worth exploring. Compare mortgage rates on VA loans against your other options before you lock anything in, though.
What is a VA loan?
Because the VA insures these loans, they come with relatively low levels of risk for the lenders. That translates into benefits for you.
Specifically, you can get a VA loan without making a down payment. And unlike other government-backed loans (namely, FHA loans), you won't have to pay for mortgage insurance.
You don't get this kind of mortgage directly from the VA. Instead, you work with a lender that offers VA loans. Using rate tables that specifically showcase VA-approved lenders helps you get a feel for your choices as far as lending partners go. We also have a guide to help.
The pros and cons of a VA loan
While VA loans have a lot of advantages, they might not be your best choice — or a choice for you at all. These mortgages are only for primary residences, so you can't tap one for a vacation home or investment property.
Before you decide to get a VA loan, consider the advantages and disadvantages:
Pros of a VA loan
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You can get this kind of mortgage without putting any money down. You'll still need to pay closing costs, but that can make homeownership much more attainable. (The less you put down, the bigger your funding fee will be — more on that below.)
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Unlike conventional mortgages with less than 20% down and FHA loans, VA loans don't require the borrower to pay mortgage insurance.
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The VA's backing lowers risk for lenders, and they might offer you a lower interest rate or accept a lower credit score because of that.
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The VA limits the closing costs that lenders can charge you, and it prevents them from attaching a prepayment penalty to your loan.
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The VA doesn't set a cap on how much eligible people can borrow, unlike FHA loans, which have loan maximums.
Cons of a VA loan
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VA loans come with a one-time funding fee. It ranges from 1.25–3.3% of your loan amount. The bigger your down payment, the smaller that fee gets. (Some people with a service-related disability and some surviving spouses can get that fee waived.)
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Not all lenders offer VA loans, so you won't have as many options as if you chose a conventional (i.e., not government-backed) mortgage.
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There's a fairly widespread misconception that VA loans take longer to close. That might encourage a home seller to take another offer, especially if you're trying to buy in a hot market.
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The VA requires the house you're buying to meet minimum property requirements. That can take some fixer-uppers off the table.
How to compare Today's VA IRRRL Rates mortgage rates
If you only take one piece of advice when you’re getting a mortgage, let it be this: compare rates from at least three different lenders. Doing so can save you thousands of dollars over the life of your loan.
To make it easier for you to put the work in here, follow these steps:
Step 1: Understand your borrower profile
First, you want to get a handle on how mortgage lenders are going to see you. If you look like you’re going to be able to repay your home loan fairly easily, they’ll offer you more favorable conditions. If you look high-risk, you’re going to pay more for your mortgage. Specifically, you’ll be charged a higher interest rate.
So, what makes a borrower low- or high-risk? To decide what kind of loan to offer to you (if any), lenders look at a lot of factors. The biggest ones here include:
- Your monthly income — you don’t want an overly large chunk to have to go toward paying your monthly mortgage bill, which lenders measure with your debt-to-income (DTI) ratio
- Your credit score, which essentially tells them how good you’ve been with managing money in the past
- Your loan-to-value (LTV) ratio (higher is riskier) — the price of the house and your down payment size both come into play here
If you’re not in good shape in any of these areas, putting in some work before you buy (e.g., working on your credit score, lowering your DTI ratio) can help you get a lower interest rate.
Step 2: Use rate tables to see what’s on offer today
There are lots of resources online that show you rate offers from leading lenders. Use a mortgage rate table to get a feel for what kind of interest rates are available from financial institutions that provide home loans in your area.
Ideally, that rate table lets you input personal information, like your credit score and the price of the house you want to buy. This way, the rates you get shown should align with what you’re actually eligible to get. A lot of lenders advertise low starting rates, but only the “best” borrowers will be approved for them once they apply.
Step 3: Get preapproved with three lenders
Once you’ve picked out a few lenders that look good to you, go through their preapproval process. That will mean filling out some paperwork, but it’s the best way to figure out what you can really qualify for in terms of loan size and interest rate.
Have financial documents — like your bank statement and pay stubs — handy to make it easier to complete your preapproval applications.
Step 4: Compare preapprovals
When you get preapproved, the lender should give you documentation about your potential mortgage. Ideally, this gives you a feel for the total amount you’re borrowing, the repayment term, the interest rate, fees, and closing costs.
Line up your quotes from each lender and go through them, paying special attention to the annual percentage rate (APR). This tells you how much you’ll pay each year for the loan including not just interest, but also fees. By looking at APRs, you get a clear idea of what you’ll truly pay if you choose that specific mortgage. This helps you identify the best option for yourself and your financial goals.
If you’re ready to start comparing Today's VA IRRRL Rates rates, use our rate table to get started. We have fields up top where you can input key details like your credit score range and zip code so we can best tailor the mortgage rate offers to you.