VA Fixed Rates or VA Adjustable Rates: Analyzing which rate type is better for you
You probably have heard from many people calling you from the VA Department at several different banks to see if the adjustable rate you got a few years ago is still current. At the time you got the adjustable rate, it probably saved you quite a bit of money because the Federal Reserve kept rates artificially low. However, since then, the feds have hiked rates 10 times shortly after many Veterans refinanced, which means it's time to reevaluate whether or not it still makes financial sense to keep the adjustable rate.
The big question you have to ask yourself is if you plan to stay in your home for the short term or for the long term. The reason why it's important to ask that question is because, after just two adjustments--meaning when your rate adjusts just twice on the adjustable rate--your payment could increase by $200 per month on a $200,000.00 VA loan. With your third adjustment, you could see your monthly payment increase by $300 per month and--keep in mind--even at this point, there's still room for two future potential adjustments.
So if you plan on being in your home for the long term, you probably don't feel very good about this numbers, especially because your rate can adjust up to 5 percentage points higher than your original rate.
These lenders often have tools called e-files, which is based on a type of technology that is pretty popular in the tax industry, and an e-file is basically a digital loan package that tells you definitively what you qualify for on a fixed rate (down to the penny).
It also makes refinancing fast, easy, and convenient because you can literally lock in with the click of a mouse. If you've never heard of an e-file and are fairly computer savvy, all you have to do is confirm your zip code at the top of the page, answer a few questions, and a digital VA loan package can be sent to you right away via email. Give it a shot below.