Stability Coming as Housing Marketing Moderates

VA mortgage interest rates, along with their conventional counterparts, have settled a bit after a weeks-long roller coaster. The average interest rate on a 30-year fixed rate mortgage fell to 4.31 percent last week, down from a 4.51 percent average just two weeks earlier, according to Freddie Mac.

Mortgage rates seem to be stabilizing. It's impossible to say whether that trend will continue. But even if rates begin to climb back up, this is still a great time to buy a home for veterans and service members considering using their hard-earned VA home loan benefits. When we step back and take a look at interest rate trends over a longer span of time, current and future military homebuyers get a better sense of where they fit in the grand scheme of home financing.

Let's just say that it's still a great time on that time line, too.

Recent History of VA Mortgage Rates

First, a little background on VA mortgage rates in general. They're competitive with conventional rates, and often times they're slightly better. That's a big-time benefit for veterans, who will generally need about a 740 credit score to start talking about conventional loans. Right now some VA lenders are looking for at least a 620 to move forward.

VA interest rates are tied to the bond market, and they can change multiple times a day. That's why it's so important to stay in contact with your loan expert as you roll through the purchase or refinance process. You can read more on VA interest rates and the best time to lock yours.

Big picture, though, take a look at where average interest rates were over the last 30 years:

• July 1980: 12.19 percent
• July 1990: 10.14 percent
• July 2000: 8.15
• July 2010: 4.56

That's a buyer-friendly progression if there ever was one. Inflation, income growth and other factors aren't included in here, but it's still a pretty clear snapshot of how interest rates have trended over the last three decades.

Here's some numbers to provide context for how this might affect finances. Let's say you're purchasing a $200,000 home with a 30-year fixed-rate mortgage at 12.19 percent. The monthly principle and interest payment is about $1,775. Drop the rate to 4.56 and the payment is about $1,020, a difference of $755 per month.

That kind of long-range context helps put things in perspective.

Getting Started

When we talk about interest rates, we typically talk about averages. The reality is you're probably going to be quoted a different rate, and that percentage depends on a host of factors unique to you.

But it's unlikely to be 12 percent. Or 10 percent. People who bought homes decades ago still shake their heads looking at today's rates. Focusing on the present, the reality is it's still a great time to buy a home.

If you've been thinking about using your VA home loan benefits or you're not sure if you even have them, you can talk with a Veterans United VA Loan Expert at 855-870-8845. You typically can't lock your rate until you're under contract on a home, but a VA loan expert can talk with you in more detail about rates then and there and what might be possible as a result of your service and sacrifice.