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Our nation is indebted to those who have served in our armed forces, and VA mortgages are one of the rewards for their contributions. These home loans for military veterans and active duty service members have helped millions enjoy the benefits of home ownership by making it easier and more affordable to get a mortgage.

Today's VA Mortgage Rates

Product (Rate Program)RateAPR
Fixed30Year4.41%4.467%
Fixed20Year4.242%4.32%
Fixed15Year3.834%3.94%
Fixed10Year3.807%3.953%
ARM34.26%4.93%
ARM53.901%4.706%
ARM73.956%4.598%

 

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VA mortgages offer some major advantages over conventional home loans, including no down payment required on most loans. VA mortgage rates today are one of the best deals around, often lower than rates on conventional loans by a quarter percentage point or more. Credit requirements are flexible as well. So they're an attractive option for borrowers with a military background or connection.

VA mortgages are available to U.S. military veterans and to those currently serving who have completed certain service requirements.  Others with a U.S. military connection may be eligible as well, including surviving spouses of veterans who died of service-related causes and employees of selected government agencies.  Former service members with a dishonorable discharge are not eligible.

VA mortgages are offered by authorized lenders throughout the country and are guaranteed by the U.S. Department of Veterans Affairs (formerly Veterans Administration). It's this guarantee – in which the VA insures the lender against a possible loan default – that allows VA mortgages to be offered on such generous terms to veterans in appreciation for their service.

Here's a look at some of the key features:

 

100 percent financing

VA mortgages are one of the few ways you can buy a home with no down payment.  Generally speaking, the VA gives lenders a guarantee of 25 percent of the loan amount up to a certain limit.  This is known as the VA guaranty. For the lender, that's like having a 25 percent down payment, which is a substantial amount.  So you can finance 100 percent of the cost of your home.

Because the VA guaranty insures the loan, there's no need for VA borrowers to pay an annual fee for mortgage insurance, as is required with conventional and FHA loans with less than 20 percent down.  That can amount to an annual charge of one-half to one-percent of the loan amount or more, so that's a significant savings for VA borrowers.

VA mortgages have no upper limit, but there is a cap on how much you can finance without a down payment. In most of the country, that maximum is $453,100 (2018 limit), though you can go as high as $679,650 in counties with high real estate values and up to $721,050 in Hawaii.  These are sometimes referred to as the VA loan limits, though they aren't a limit in the strict sense. You can still get a VA mortgage in excess of those amounts, but you need to make a down payment of at least 25 percent of the amount over the cap.

 

Low VA mortgage rates

The same guarantee that allows you to get a VA mortgage with no down payment is also what allows VA mortgage rates to be lower than those on other types of home loans. Depending on your credit and the type of loan you're comparing it to, VA mortgage rates are often one-quarter to one-va mortgage rateshalf a percentage point lower than you'd be able to obtain on a conventional mortgage or FHA loan.

Current VA mortgage rates are listed at the top of the page. Note that these are averages, and may vary from lender to lender and depending on such factors as the discount points purchased by borrowers to get a lower rate. 

As with other types of loans, current VA mortgage rates fluctuate depending on market conditions. VA mortgage rates today may be different from VA mortgage rates next week or even tomorrow. This is why it's important, when shopping for a VA loan from various lenders, to get all your rate quotes the same day, preferably within a few hours of each other, so you can make an accurate comparison of the rates VA lenders are offering.

You can contact VA mortgage lenders directly to get personalized, no-obligation quotes by providing some information about the loan you are seeking and some general information about your credit score and finances. You can also get personalized quotes for current VA mortgage rates offered by multiple lenders in a single step by using a rate request form such as the one at the top of this page.

 

Flexible credit requirements

VA loans officially have no minimum credit score requirement. However, most individual VA lenders have their own credit requirements for loans they will approve.  A few will approve applications from borrowers with FICO credit scores as low as 580, but 620 is the more common minimum.

On the other hand, borrowers who have little or no established credit history – they've never had things like credit cards, auto loans, etc. or made little use of them – can sometimes qualify for a VA mortgage using what's called alternate credit history.  That uses records of things like payments for rent, utilities, cell phone service, internet services or other things billed regularly to show a record of reliably making payments on schedule.  However, you need to find a VA lender who is willing to the extra work needed to qualify a loan on this basis, which may be a challenge.

 

Where to apply for a VA mortgage?

VA mortgages are offered through VA-approved lenders around the county.  These are typically lenders who offer other loan products in addition to VA mortgages, though some may specialize in VA mortgages in particular.

Many lenders now offer online mortgage lending, so that you can apply and submit your application materials electronically. You don't have to come into the office – in fact, they may not even have an office in your state, though they have to be licensed to do business there.  The only thing you need to do in person is the loan closing, which for online lending is typically handled at the office of a title company or an attorney.

Online lending also makes it easy to shop around and compare loans, as you can request quotes electronically. You can contact individual lenders or use the form at the top of this page to get personalized VA mortgage quotes from multiple lenders at once.

 

    Published on November 13, 2015