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Are Low, Low VA Loan Rates Real?

Monday Jun 19, 2017
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At Indigo Mortgage, we frequently have veterans contact us and ask about the emails and post cards they receive that advertise VA loans with interest rates below 3%. They want to know if these low, low interest rates are really legitimate? The short answer is no. Here’s why.

Any rate below 3% on a VA mortgage is most likely going to be an adjustable rate mortgage (ARM), although that may be buried in such fine print that you can't find it. Deceptive lenders fail to disclose to the borrower that these unbelievably low rates are for 3/1 or 5/1 ARM’s, meaning that the loan begins with a fixed rate for just 3 or 5 years. Following that introductory period, then the interest rate might adjust each year after that. Over time, what sounded like a good deal at the beginning may turn out to be a very, very high interest rate in comparison. At Indigo Mortgage, we encourage veterans to ask every question you can think of; we do not typically advocate an adjustable rate mortgage, and certainly not if that’s not what is in the borrower's best interest. In many instances, we've seen veterans end up paying thousands of dollars in discount points to buy their interest rate down below 3%

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We have found that many of the online or national lenders who claim expertise in VA lending are deceitful and do not care about their borrowers, they just want to make fast money even if that means exploiting the veteran. In fact, in recent years, the Consumer Financial Protection Bureau has fined several of these companies for presenting themselves as VA endorsed lenders, when the VA had never given that endorsement.

Veterans would be better served by working with a trusted and experienced VA mortgage lender like Indigo Mortgage. We are always happy to educate borrowers and help you assess your loan options. Always ask your lender in writing for assurance as to whether the rates they’re quoting are fixed or adjustable, as well as what the origination and discounts point charges are for any rate.

As always, shop around for the best VA loan, and contact Indigo Mortgage for help!

Indigo Mortgage is a locally owned and operated company, serving homebuyers in Colorado and New Mexico. For questions about selecting a mortgage lender, contact Indigo Mortgage in Colorado Springs at (303) 571-5700. Indigo Mortgage in Colorado proudly focuses on VA Loans. They are licensed by the Nationwide Mortgage Licensing System (NMLS #188348), and can provide loans anywhere in Colorado and New Mexico.

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