Why VA Rates are Different from Lender to Lender

Transcript

Today at Texas Home Loans, we’re gonna talk about why VA rates are different than conventional rates. There’s a lot of folklore out there. There’s a lot of theories, but what, as a veteran, you need to know what goes into your rate calculation, and once you know that, you can determine whether you’re getting a good deal or not.

There is. A misconception that veteran loans are actually from the va. It’s not from va. It’s insurance placed on a regular conventional Fanny and Freddy loan. And what that insurance does is ensures the lender to default So, The lender is guaranteed. You’ve heard this name. It’s a guaranteed loan, and it’s kind of used in a way to think you’re guaranteed the loan.

You’re not guaranteed to get the loan, nor are you guaranteed against default. The lender is guaranteed. If you default up to a certain percentage of the loan, typically it’s a 30% margin. Because of that insurance, that loan is more valuable because then it’s not a risk to the lender. As a result, you get a lower.

Or at least you should, but most of the time you don’t. And we’re gonna go into in my other videos, which are why the rates are lower or should be lower with VA compared to conventional, and also why this also applies to fha. Hopefully that’s helpful and we’ll go from there.