What Determines My Rate?
Va loan interest rates are influenced by a variety of factors, including:
Loan Duration ( 15- or 30-year)
Current Market Conditions
Due to the risk involved in issuing a loan, a good credit score almost always means a lower rate. However, even if you have imperfect credit, you may still have an easier time qualifying for a low rate die to the VA Guaranty.
VA Interest Rate vs APR
It is important to understand the difference between your interest rate and Annual Percentage Rate (APR). The interest rate on your VA loan is the cost you pay each year to borrow the money and does not reflect fees and charges you may incur to get the loan.
The APR on a VA loan is a broader reflection of borrowing costs, including the interest rate and other potential costs and fees associated with getting the loan.
APR can take into consideration the following items:
- Interest rate
- Origination fees and costs
- Closing agent fees
- Discount points
- Other fees dependent on the specific transaction
Your APR is likely to be higher than your base VA loan interest rate. APR is a tool that can help you compare mortgage offers. But understand that lenders can calculate it differently.