Hi, all–
I just posted this in another veteran's forum…but this is probably the better one to post in. Im currently searching for my first home and I am excited to finally use my VA home loan. I retained a mortgage broker that my real estate agent recommended. I found a house that I like and I had this broker run numbers for me. I asked that she give me all scenarios including how much money I could put down towards an interest rate buy down. She responded and said that the VA only allows the interest rate to be bought down 2 points from the highest interest rate available.
So, for example, she told me that my interest rate without a buy down is 7.25. She said that the highest interest rate available was 8.25…so I could only buy my interest rate down to 6.25–no matter how much cash I wanted to put down on a buy down….yet, when I googled this, everything said that the va doesnt restrict how far you can buy down your rate with cash. I did read that there is maybe a cap on rolling a buy down into the loan….
Anyway, I went to see my local bank and they said that they werent super well versed in va restrictions, but that they arent aware of any restrictions…told me that i could buy my rate down to 5 or in the 4s, or whatever i felt comfortable with for that matter….I just want to see if there are any va home loan experts that can help clarify this. Thank you so much for your time!!
va home loan- interest rate buy down
byu/gremmy1235 inMilitaryFinance
Posted by gremmy1235
3 Comments
Are you expecting to stay in that home long term and dont anticipate refinancing down the road? It takes years to break even on rate buy down.
If you have the $ for a buy down/down payment dont assume VA will work put better. Unless you are exempt from the funding fee, VA loan fees can make i more expensive.
Most lenders don’t even allow you to go above 4 points (1%). I highly doubt anyone is allowing you to get into the 4s. If they are – get that in writing now.
7.25% for VA today with no buy down is robbery. The highest price lender you will ever find other than a new build preferred lender is a realtor recommended lender. They are relying on the realtor “selling” them and don’t have to give the best rates.
VA rates today are low 6’s with no buy down. Do your own due diligence and shop multiple lenders.