I’ve been looking into the VA IRRRL for the last three weeks. I really want a rate of 5.125% or lower (I’d love 4.99%), but lenders keep telling me I have to pay to get that rate.
I saw online that the VA IRRRL interest rate is 4.99% with an APR of 5.295%. Why do I have to pay to get that rate? I’ve been Googling for days and need someone to explain it in simple terms. Thanks in advance.
I can imagine that loan officers are eager to work with you.
I really don’t want to engage in answering the questions…
I’m fairly certain that the few questions I’ve asked in less than a month are worth the $700k loan they receive. What’s strange is how many people take on that debt without asking any questions. I’m always open to sharing information with others.
Rates differ due to various factors, including credit score, income, loan-to-value ratio, debt-to-income ratio, and location. They are not a one-size-fits-all solution.
As the loan officer, I want to clarify that the cost of the 4.99% rate is incorporated into the overall pricing, which is why the APR is 5.295%. Essentially, they are charging you almost 3 discount points (3%) for that rate.
This is a common practice in mortgage advertising. They promote the lowest rate on the initial sheet to attract consumer interest. However, they are legally required to disclose the APR and loan terms in any rate advertisement, which is often buried in the fine print.
My interest rate is 4.99%, and the APR is 5.019%. Am I doing really well with this? I locked it in from a previous rate of 6.22%.
As a mortgage loan originator, I can’t stress enough the importance of reading the fine print online. Lenders are required to disclose the terms that lead to a particular interest rate, which often apply only to A+ borrowers. This typically includes factors like 15-year terms and a low loan balance relative to equity, among others.
It states that the 30-year mortgage is linked to the 10-year Treasury yield, which has decreased. Why would this be relevant for a 15-year mortgage? I’m just trying to grasp the concept.
My credit score is over 800, and I only have a student loan. The loan-to-value ratio is high because we bought the house last year, but we’ve been paying an extra $100 toward the principal with each payment.
I also saw that the wholesale mortgage rate is 4.99%. What effect does that have?
Whenever you come across an advertised rate, keep in mind that it applies to a 15-year mortgage. Rates for 30-year mortgages will always be higher, regardless of the loan type.
The APR truly represents the rate you would actually pay. If that weren’t the case, the APR would align with the interest rate.
Whether you’re a first-time user of a VA loan or have used it before, the difference between the APY and APR represents your “VA funding fee,” unless you have a disability rating. Some may refer to it as a cost for the interest rate, but I see it as a way to support the VA lending program for other veterans.
I have a rating and am not required to pay a funding fee.
You can purchase any rate you desire as long as it is available.
Pricing fluctuates daily. The cost for a 4.99% rate was lower yesterday and even cheaper the day before that, as rates have been rising. There isn’t a national wholesale rate; such a standard doesn’t exist. Finding a 4.99% rate today would be challenging and likely requires points.