We specialize in VA loans and it is likely you can qualify is a VA Streamline Refinance (no appraisal, no income qualifying and in some cases no credit score). The "Veteran Benefits Improvement Act was adopted and the changes that are going to benefit you right now this is a great option and provides significant saving for Veterans.
The Veterans Administraion develops home loan programs to assist the Veteran and to help them to make it easier for them to afford their home with beneficial safe home loan programs.
The majority of homeowners change their mortgage every 5 to 7 years- save the extra money and go with the 5/1. According to the Mortgage Banker Association that has tracked Mortgage statistics for over 75 years 95% of Mortgage loans are paid off (refinanced or property sold) in 5 to 7 years so why pay for the more expensive 30 fixed interest rate when you won’t have the loan for 30 years so why pay the higher 30 year interest rate.
The reason the banks will give the veteran a lower than Market interest rates and very stable loan programs is in exchange for the security of the VA Guaranteeing the bank and backing the loan.
This loan is Fixed for 5 years and can be redone and or re-fixed again for and addtional 3, 5 or 30 years at any time.
Some facts about the VA hybrid loan are:
The Department of Veteran's Affairs desinged the VA hybrid loan and would not allow the veteran to have this loan if it was dangerous to the financial wellbeing of the Veteran.
It would make absolutely no sense for the Department of Veterans Affairs to encourage banks, lenders and mortgage loan officers to offer this VA hybrid loan if it was going to cause failure or loss of money to the VA. The VA guarantees your loan will be paid back to the bank or the VA themselves have to step in and cover a large portion of the losses to the bank. The VA wants you to use this loan because the loan will benefit you and thus benefit the VA.
The VA hybrid rate can go down below 2%.
Many people think that the VA hybrid loan will only go up. This is not true at all. As a mater of fact after watching them for 25 years it is more likely to stay the same but when rates go down, so does the VA hybrid rate. We have many military clients that have seen their hybrid rate drop into the 1- 2% range.
Below is directly from the VA site:
VA 5/1 Hybrid
The VA Hybrid product provides for an initial fixed interest rate for a period of three or five years, and then adjusts annually after the initial fixed period. The 5/1 VA Hybrid ARM products allow a 1% annual interest rate adjustment after the initial fixed interest rate period, and a 5% interest rate cap over the life of the loan. Interest rate adjustments must occur on an annual basis, except for the first adjustment which may occur no sooner than 60 months or 5 years from the date of the borrower's first payment on the 5/1. The loan term is 30 years for these loans and the saving can be substantial .
INDEX AND MARGINS
The index is the weekly average yield on U.S. Treasury Securities adjusted to a constant maturity of one year. Also known as the 1-Year Constant Maturity Index. VA ARM loans have either a 1.75% margin or a 2.25% margin.
Initial Note rate plus 5%
One percent (1%) annually after the initial fixed rate period of 5 years
Questions 1-800-450-2018 or firstname.lastname@example.org
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