What Determines VA Home Loan Rates
Learn more about VA mortgage rates in Minnesota
Are you thinking about applying for a VA home loan in Minnesota? While VA mortages are backed by the federal government and have plenty of advantages over a convential home loan, the interest rate of a VA home loan can still be based on various factors relating to your individual situation.
Like with any other loan, home or otherwise, a good credit score will be beneficial when applying for a VA home loan. And even though you’ll have an easier time qualifying for a VA loan, here are just a few factors that will undoubtedly influence your interest rate:
- Credit score
- Debt-to-income ratio
- Loan duration
- Current borrowing conditions
The Type of VA Loan Also Matters
VA Loans Can Be Fixed- or Adjustable-Rate Mortgages
Much like conventional home loans, VA home loans can also be fixed or adjustable-rate mortgages, which will also help determine your interest rate. With an adjustable rate VA home loan, the initial interest rate will usually be below the market rate, but the interest rate for the remainder of the life of the loan can and likely will fluctuate. On the other hand, like the name says, fixed-rate VA home loans will include a set interest rate, however, if the market interest rate drops below your set rate sometime during the life of the loan, refinancing can also be an option.
