VA loans feature lower interest rates and flexible credit requirements when compared to conventional loans. Here are Money’s main takeaways on how to get the best VA loan rate:
A VA loan may come with lower interest rates, flexible credit requirements, and may allow you to take out a loan without a deposit. Saving money on VA home loans is more about experience than any sort of hack or top tip, so here is a smattering of advice from people who have some VA loan experience.
No Time Like The Present
The first piece of advice is that you should get started right away. It is a long process, so getting started right away gives you a larger window of opportunity. Plus, you can get started without a Certificate of Eligibility (COE). Your credit score matters, but it isn't everything, and during the months you are working towards finding and buying a house, you can work towards improving your credit rating.
Save Some Money to Invest
Having savings is going to smooth the process out quite a bit. In truth, being able to budget is a pretty good start because you will need to budget for your payments after your VA loan. There are tools you can find here to help you figure out your payments and your budget. It may also help you figure out the sort of fees you are going to pay later, which is another reason to save some money.
Shop for a VA Lender and get Pre-Approved
You need to find a lender, you need to find a real estate agent that’s VA-savvy, and you need to find a property that is VA-approved. Your aim is to close the deal when you are almost ready to move in. How does all of this save you money? The more people who are savvy about the situation, including yourself, the less likely it is that silly money-losing mistakes will occur. With that in mind, do talk to other people who have taken VA loans. Even people who have done it a few times and think they are experts will have a few “Whoops” stories from their earlier days when they lost money because of silly mistakes.
Better Credit Rating
Yes, your credit rating still matters. Some people with moderate to “Not so great” credit ratings are able to get VA loans, but their rates are not that great. You should try working on your debt to income ratio, and you should minimize your debts as much as you can. Plus, let’s say you had a few credit checks recently and you perhaps missed a payment or two. Your credit rating will be in the toilet, but within six months it is almost as if it didn't happen. That is another reason why you should start right away because you can fix up your credit score and get a better VA loan rate in as little as half a year.
Offering a Down Payment
If you are able to play with a few of those loan-quote tools, have a fiddle around with a few of the functions to see if you can wiggle a lower rate or a better deal. Play around with down payments to see if it makes a massive difference to your VA loan. For all you know, if you throw in a few thousand, you may get a much better deal. Sell a car, get a loan from a family member, try to find a way of getting extra cash without getting into further debt (i.e. don't try to pay your down payment with a credit card).
Special Programs for Certain People
You could save a little money with the use of state programs. They often offer exclusive rate discounts to eligible military members, veterans and surviving spouses. They may also offer closing cost assistance too. Don’t forget that you can shop around. The VA loans on offer are issued by private lending companies. They are competitive, so it pays to shop around for a better deal.
