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Does anyone know why a Va mortgage or refinace interest rate is higher than the FHA or regular mortgages out there?

We have a VA mortgage, and want to refinance, but the VA Streamline rate is at 5.375 % and the FHA loans are going fo 4.78%--why the difference? I've got a mortgage girl watching the VA rates and she said it was low and will come down, but why the difference?

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Teachermom01

Asked by Teachermom01 at 8:13 PM on May. 7, 2009 in Politics & Current Events

Level 1 (0 Credits)
Answers (6)
  • I have a VA mortgage, our interest rate is 6.25%, we have to wait until July to do our streamlined re-fi because you have to own the home for a year first. I have no idea why there is a difference but 5.37 is better than 6.25 so I'm happy.
    mlregalado

    Answer by mlregalado at 8:20 PM on May. 7, 2009

  • hm, our VA is 5.6, if we wanted to refi it would be 4.5, but we just don't care to right now
    heathersarge

    Answer by heathersarge at 11:22 PM on May. 7, 2009

  • Do you have to go with VA? If you can qualify for conventional, do so and get the lower rate, but conventional may have stricter requirements than the VA and there is a funding fee with VA and FHA loans that you don't have with conventional loans. Have the mortgage co. run all scenarios you qualify for and see which you can benefit the most with, I hope it works out well for you... :)
    agentwanda

    Answer by agentwanda at 3:20 AM on May. 8, 2009

  • We can get 4.5 with points.....I'm trying to not pay points, and get the lowest rate.
    Teachermom01

    Answer by Teachermom01 at 6:39 AM on May. 8, 2009

  • Our VA refi was 4.625....
    Anonymous

    Answer by Anonymous at 10:53 AM on May. 8, 2009

  • i'm above poster. Ours was 4.625. I'm not sure about points. I know that our total cost was $3500 and we rolled that into our loan balance so we paid nothing out of pocket. Our Payment is dropping $200, and considering we plan on being in this house at least 5-10 years, i figure even if points were in that $3500, we still come out better with that interest rate. Our old one was 6.5. With things being so low right now, you really just have to run the numbers to see how long it would take you to recoup the cost of paying the points vs. how long you plan on being there. If you were gonna move in a year or 2 and not be there long enough to save enough on your payment to recoup the closing cost and points then don't refi.
    Anonymous

    Answer by Anonymous at 10:58 AM on May. 8, 2009

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