The following VA loan analysis is essential for all veterans, active soldier, and all of the special military wives out there (we love you the most!) with adjustable rates on their VA mortgage!
The Department of Veterans Affairs made a few significant changes to the VA Home Mortgage Loan Program, so listen up!
If you are the type of person who likes to have total control over every aspect of their finances—especially your VA Home Mortgage Loan—then we want to talk to you about risk versus reward, and what makes the most financial sense for you and your family when it comes to your VA home mortgage.
For example, if you currently have a VA adjustable rate mortgage, you probably decided a long time ago you’re somewhat comfortable risking the possibility of future rate hikes on your VA loan.
We don’t blame you. There used to be a huge difference between adjustable rates and fixed rates, especially among some of the best VA lenders, so the short-term savings used to be nice for a while. We get that.
But, now, the difference between a VA ARM rate versus a VA fixed rate has nearly disappeared on all VA home mortgage loans, especially when fixed rates recently dropped to brand new historical lows at 2.75% following the so-called “Brexit” event!
In case that last fact was not clear to you, let me simply it for you and what it means for your VA mortgage loan: adjustable rates no longer save you money, soldier.
Think about this a little deeper now, especially in terms of risk versus reward involving your VA mortgage loan payments.
The absence of savings on a VA ARM loan translates into the absence of a reward, and this is the irony of modern day VA ARM program and their VA Hybrid counterparts.
In laymen’s terms, here is the magic question: why would any sane person accept the risks associated with a VA adjustable rate mortgage when there is no longer even a reward to show for it?
But wait—If the savings no longer exist between VA ARM loan options relative to VA mortgage loans with a fixed rate, doesn’t that mean the risk also disappears with it?
No. Plain and simple. Allow me to break it down for you:
Zero reward means 100% risk.
100% risk + 0% reward =
100% financial insanity!
If your current VA lender sold you this, you better bet they are banking on VA home mortgage loan rates to increase across the board before you realize this, and that’s why they probably won’t call you to discuss fixed rate options until a competitor reaches out to your first!
Think about it—even if you’re one of the lucky ones who ended up with a 1.75% ARM on your VA loan when the opportunity was there, it’s important to remember you’ll eventually end up at 2.75% with just your first adjustment on your VA mortgage!
Don’t forget – your payment will ALWAYS be based off of the starting loan amount on your VA mortgage!
Most importantly, the madness does not end there. Veterans with 1.75% rate on their VA home loans may eventually see their VA ARM rate to a maximum of 6.75%! Have you seen what your payment would look like at 6.75%?
FREQUENTLY ASKED QUESTION: But wait, can’t my VA ARM loan also go down if the economy gets worse? It says it in my VA loan contract!
Listen, soldier, if your 1.75% ARM drops to 0.75%, pack your bags and move to a different country because we all know what happened last time big banks stopped making money 2007.
You bailed them out. And they thanked you with a recession.
So if you’re betting, hoping, praying for your VA ARM rate to drop to 0.75%, you’re also betting against your country, its economy, and another big bank bailout at the expense of your children finances and their children’s finances.
That’s a negative way of looking at it, but facts are stubborn things. Regain total control over your VA mortgage by switching to a VA fixed rate today.
Your first VA loan payment will be identical to your last, along with every other payment in between. We’ll even let you skip your first two VA mortgage payments after you close. Want a refund of all the money in your escrow account? We can even help you with that!
Young or old, short term or long term, your VA home mortgage loan is probably the biggest expense you will ever have in your entire life.
The key is to not let the biggest expense in your entire life turn into the biggest gamble of your life, especially since there is no reward to show for it! We can’t stress this enough!
And, most importantly, at least begin considering the process of switching the rate on your VA mortgage from a VA ARM to a VA fixed rate mortgage.
We salute all those who served, and all those who continue to serve! Thank you so much for your service!
And one last big salute to all military spouses! While many may not thank you or even realize your sacrifice at home, we want to tell you we get it and we thank you for it.
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