Whether you’re an active military member, a member of the reserves, or a military Veteran living in Dallas, a VA loan can be a great option for pursuing your dream of homeownership. Once you’ve determined that you’re ready to purchase a home, the next step is to start shopping around for a mortgage. Below, we’ve shared some advice for how to get a good rate on a VA loan in Dallas.
Who Determines the Rate for a VA Home Loan?
Even though they’re insured by the federal government, rates for Veteran home loans are not determined by the VA. VA loan rates are determined by banks and mortgage companies. While rates for VA loans are usually lower than conventional mortgages, they still fluctuate on a case-by-case basis.
Tips for Getting the Best Rate for your VA Loan in Dallas
Your mortgage interest rate is important because it impacts not only your monthly payment, but also how much you’ll spend over the lifetime of your loan. Here are some tips that can help you get a good rate for your VA loan in Dallas:
Compare loan options.
Did you know that interest rates vary based on loan terms? Most lenders offer VA loans with repayment periods of 10, 15, or 30 years. Shorter-term loans have higher monthly payments, but usually also have lower interest rates. Interest rates also vary based on whether the loan is a fixed-rate or adjustable-rate loan. It’s important to know your options so that you can make a good comparison.
Improve your debt to income ratio.
Your interest rate will also be impacted by your debt-to-income ratio. This is the ratio between your total debt and gross income. The VA recommends a DTI of no more than 41% including your mortgage. However, lenders determine their own requirements for DTI. Some lenders will accept a borrower with a higher DTI in exchange for a higher loan interest rate.
To improve your debt to income ratio, you should work on paying off your debts and/or, if possible, increasing your income.
Consider making a down payment even if it’s not required.
VA loans do not require a down payment. But, in some cases, it may be beneficial to put money down anyway. Some lenders will offer a lower interest rate to borrowers who are willing to make a down payment.
Look into state programs for Veterans.
In addition to federal assistance, you should also look into state funded programs for Veterans. Some state programs offer assistance for closing costs, down payments, and lower interest rates.
Compare offers from different lenders.
Before making a final decision, you should make sure that you shop around and compare options from different lenders. You never know what’s out there until you look!
Mortgage Solutions Financial is proud to offer competitive home financing options for VA borrowers. Call today to begin the application process for a VA loan in Dallas!