Choosing a lender for your VA mortgage is often based on mortgage rates which can be very competitive. However, the VA lender you choose should be based on more than just mortgage rates. This presentation shows how to determine the best VA mortgage for you.

1. VA MORTGAGE
RATES
5 IMPORTANT TIPS YOU SHOULD KNOW

2. Overview
VA loans are backed by the Federal
Government which gives lenders the option to
offer low mortgage rates that are very
competitive. Due to this, VA mortgage rates are
usually lower than the rates offered for
conventional mortgages.
When choosing a VA mortgage rate, consider
these 5 important tips:

3. 1.
VA mortgage rates are partially determined by
your credit score, debt to income ratio (DTI)
and term of loan. Having a good credit score
and low DTI will typically produce a better rate.
However, due to the VA guaranty, you may still
qualify for a low rate even if your credit is not
perfect.

4. 2.
VA mortgage rates offered by lenders can be
different and depend on many factors including
the volume of loans they do and their overhead
costs. Saving thousands of dollars is common
by shopping and comparing lenders.

5. 3.
The lowest VA mortgage rate offered may not
be the best option for saving you money. A
lender may offer a low mortgage, but charge
higher lender fees. For example, a lender who
offers a rate of 3.75% and charges $2,500 in
lender fees may not be the cheaper mortgage
than a lender who offers a rate of 3.875% with
no lender fees.

6. 4.
When comparing VA mortgage rates, you
cannot simply rely on the APR (Annual
Percentage Rate). The APR usually includes
closing costs and other charges that are part of
the mortgage and it is calculated using the term
of the loan. Therefore, the APR may appear to
be lower even if the cost of the loan is higher.

7. continued...
Instead, every charge and fee should be looked
at and compared in order to determine the
better deal. Most importantly, lender related
fees should be carefully compared as these are
the fees that often vary and are controlled by
the lender. Lender fees can be labeled as
Origination Fee, Discount Points, Broker Fee,

8. continued...
Application Fee, Underwriting Fee and
Processing Fee. Appraisal Fees, Title
Company Fees, State and/or County Mortgage
Taxes, and Escrow Set-up “Pre-paids” typically
will be the same or very close to the same at
closing since these are set by third parties
and/or are regulated.

9. 5.
Calculating the break even point is also
important when comparing VA mortgage rates,
especially when refinancing. The breakeven
point is determined by taking the costs (fees) of
the mortgage divided by the savings each
month which will equal the amount of months it
will take to pay off these fees. After that period,

10. continued...
then there is true savings. If you plan on
owning the home past the break even point,
generally the lower interest rate is the most
efficient option.

11. CONCLUSION
Too often, VA borrowers will choose the lowest
VA mortgage rate offered without considering
what it really takes to receive a good mortgage.
Taking the time to consider and compare all of
the individual fees and costs in addition to the
quoted VA mortgage rate will real to you what
the mortgage is actually costing you.

12. CONTACT
Feel free at any time to contact me for more
information about a VA loan and comparing VA
mortgage rates and fees to help determine the
better VA loan for you.
Brian Thomas
Veteran Home Financing