As a VA loan specialist, I spend a good portion of my day speaking to Veterans about interest rates for their VA loans. Sometimes I am able to deliver good news that the market has moved in their favor and the VA rate is now lower than I had previously offered. Sadly, I am forced to share bad news that rates have increased.
In May of this past year VA rates skyrocketed following the Memorial Day Holiday. Over a three day period the lowest available rate went from 4.5% to 5.25% on a VA loan. Many Veterans ask: What causes these wild swings? The answer is not nearly as straight forward as the question.
Much like stocks, mortgage bonds are traded on the open market. The price of these bonds is what determines the rates on any given day. Also like stocks the prices, these mortgage bonds fluctuate in price from second to second. If the price is high the interest rates get lower. If the price is deflated the interest rates rise. On a daily basis bankers look at the return of their mortgage bonds to determine where their rates for the day will be. but these prices are affected by any number of economic reports, as well as simple mass hysteria when bad news hits the market. (think 9/11) thus trying to outthink the market is anything but simple.
As VA mortgage professionals we spend our days watching rates, so that Veterans can spend time concerned with other things. Because of the constant watch that we keep, VA loan specialists are in a particularly good position to help Veterans get the lowest available rate on a VA mortgage.
Don’t waste the opportunity to get a rate below 5% on your VA loan. It may be the last opportunity we see to do so for a very long time.