What are VA home mortgage interest? If the rates set by the VA or a joint mortgage. to raise prices.?

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My son apply for residential mortgages VA Mortgage Co. tree.The Now mortgages. The VA website is listed interest rate 6.000% of the load VA loan, but the mortgage interest rate is now 6.875. Mortgage Co. may charge a higher interest. The good faith estimate was made of 6.8, they said that it was only an estimate and that would be the highest they would be charged. You will soon be closed and settlement costs at closing have interest rate@6.875. they can claim a high rate of the VA on its website.

2 Comments
  1. Reply
    lonnie w
    January 25, 2011 at 7:46 pm

    The VA website might be from a different lender who does not lend where your son is buying. Or your son might now have 20% down and good credit. There are lots of reasons for the higher rate. As long as your son can afford don’t worry too much about the rate difference. VA loans only are for veterans but do not mean better interest rates or loans from the government. The perk is that there is no PMI monthly so he saves money. It sounds like a good deal.

  2. Reply
    dioncornel
    January 25, 2011 at 8:04 pm

    Yes, they can. The Veterans Administration does not actually make loans. They act as an insurance company. The money comes from the bank but the loan has an insurance policy in the form of the VA funding fee you pay to obtain the loan. This funding fee covers the insurance for the bank with the VA and insures that in the event of a default by your son, the bank will be able to get most of their money back. This insurance is what makes the loan a VA loan. Without it, the loan is considered a conventional loan and your mortgage company would then obtain the insurance through a private mortgage insurance company (PMI).

    Consequently, the rate charged by the institution is at their discretion. however it must be within reason or the VA may not allow them to continue making VA loans. 6.875 is somewhat high right now for a typical VA loan. I would question this with the lender. There may be a reason for this, but without reviewing your file, I have no idea on what that may be.

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