VA Loans Explained – Live Rates & Why VA Wins

VA loans are the gold standard for eligible buyers—but many don’t realize just how powerful they are. In our livestream, we break down key benefits: $0 down, no mortgage insurance, flexible credit, and residual income guidelines.

We’ll share live rate comparisons vs. FHA loans to show why VA often wins on monthly payment, cash to close, and overall cost. VA-eligible buyers and those who work with them will see why VA financing is a real competitive advantage.

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The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA, and USDA Programs, as well as thousands of Non-QM mortgage loan program variations using alternative income documentation!

Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs in just a few clicks. The Mortgage Calculator technology also enables borrowers to instantly complete a full loan application and upload documents to our AI powered software to get qualified in just minutes!

Our team of licensed Mortgage Loan Originators can assist our customers with Conventional, FHA, VA and USDA mortgages as well as access thousands of mortgage programs using Alternative Income Documentation such as Bank Statement Mortgages...

Transcript

Let's go ahead and get into today's episode. And as always, if you have any questions, you drop them in the chat or check out our website. Any of our 200-plus licensed loan officers will be happy to send you a full itemized loan estimate for anything you see today.

As always, we first want to check out the rates in general. So the best tool we use is the ten-year treasury. It's going to track rates in general. It's a near option. We'll look at the five days, generally downward. And we always wanna put it into perspective on the last year, so we're still pretty much at one-year lows. Rates are looking pretty good.

So definitely a great time for our borrowers to be out there shopping. Even though we have a little bit of news throughout the day, it's definitely still a great time overall. Definitely lower overall in the ten-year tracks with us, since we love to offer all the different options. Now let's get into today's live rates. Updated our live rate page here, and we always start with a basic scenario.

So we always set up our quotes here with the standard single-family home purchase: $300,000 loan amount that corresponds to loan-to-value. We use a 760 estimated credit score and an estimated 40% debt-to-income ratio in all of our standard scenarios.

So for a primary home—what you think of when you think of a mortgage loan—typically comes in today, reaches those five-point. Final APR comes in 6.111 yesterday, which is great. And if for any reason our customer doesn't qualify for a conventional option, typically we wanna look at FHA. FHA allows more leniency on credit issues, slightly higher debt-to-income overall, but does require upfront and yearly mortgage insurance.

FHA comes in today at five-point. When you put all the fees in there, always consider the APR. Final APR coming in here at 6.032. So definitely could be a touch cheaper in this scenario. It's gonna be a touch cheaper.

Now our topic for today are VA loans. Definitely the best for VA-eligible borrowers: our active military, eligible VA borrowers, and surviving spouses—all should look into this program. So VA comes in as well at 5.25. But with the sure, it comes with VA, which we'll talk about a little bit today. The final APR comes in at 5.512. So we compare that to FHA: a better option here, much better for eligible vets.

And our final government option here, USDA—for USDA properties in eligible areas. Those are typically rural areas of the country. So if our borrowers are eligible, these are good options to look at. Rates today come in as low as 5.125. Final APR comes in 5.779.

So we'll compare that for conventional when our borrowers are eligible, and USDA is typically gonna be a little bit better option there. And where we love to shine at The Mortgage Calculator is to provide our out-of-the-box solutions. So our non-QM programs are definitely some of our favorites here.

Use non-QM options using alternative documents if borrowers don’t qualify for any of the standard programs because they may be self-employed and need to use alternative docs. That's where this comes in. We can use bank statements, 1099s, PNLs, etc., to purchase a primary home. We'll typically compare that to conventional. Rates very similar here, coming in at 6%, par 6.272.

So just a touch higher than conventional, which is typical. And we can use all docs for investment properties as well. So using bank statements, etc., to purchase an investment property. They come in as low as 6.125, par 6.448. And we'll compare that to our conventional investment property option. Rates can be as low as six-point; same rate, fee is a touch lower there, par 6.438.

And my personal favorite program: our DSCR. No income or employment needed. We simply use the rents from the rental property to determine DSCR ratio. If the rents cover the expenses, that's a ratio of 1 or higher, which is used for this example. And we have a three-year penalty on this option, which is pretty standard for these programs. Rates today come in at 5.999. Pretty amazing.

Five-year comes in at 6.222, beating our conventional option, which is pretty amazing. And we can add a five-year prepay to lower the rates and cost a little bit as well: comes in at 5.875 rate. Final APR 6.193. And, of course, there's always an option for no prepayment penalty, coming in at 6.125 rate. Final APR 6.448.

So just a general note: we also have our second mortgages, other DSCR options, commercial options, construction options—the different loan options we'd go over. But we're going to do a little bit of a deep dive into VA because there's definitely some tools there for eligible veterans and active service members.

Off, we wanna make sure we pull up a property. So I pulled up a property here for sale in the area—a brand new property here—for $509,000. And the target property here, so in this case, we're going to put in the purchase at the recommended settings. I'm gonna compare FHA to VA so we can obviously see that that's going to be a great option for our borrower.

And then I'll show three different options for VA for this property here. So if we're gonna purchase this with FHA, this first option we're typically going to do a 3.5% down. That's the most common option from our borrowers for an FHA option. And what I did here is I set the credit at 620, a little bit, so we can see, just like we did the first FHA. FHA is gonna be better at lower credit, but we're gonna see in this example FHA is going to be the better option.

But with 620 credit, there's still just a flat rate of 0.55 on the MI for FHA loan, and that's $65 a month in this scenario. So here we have some great FHA rate options as well: 5.5% rate for 2.211 discount points you cost, and our rate here that's almost par 6.125, right around par there. The important thing is to look at the monthly payment and the final loan amount because there is an upfront MIP that is financed into the loan. So our final loan is actually gonna be a little higher. Need to consider there is a 1-point funding fee along with the monthly mortgage insurance as well.

Now when we compare that to VA, we have a few different tweaks we can do here, which is definitely a great advantage for our VA borrowers. So our VA borrowers, first off, the most widely known fact is probably that we can do 0% down payment, 100% LTV financing to purchase a primary home for VA borrowers. So 0% down. And, talk about that—we don't get to go into detail when we're doing the live show—our fee. So, in this case, we're typically, our most common request is to do the 0% down option. That's our most common request for a purchase.

And for VA benefits, if we're putting under 5% down, it's gonna be a funding fee of 2.15, which is what I use in this example. Subsequent use is going to be 3.3. And if you have a service-related disability as well, there’s definitely eligibility there. We can pull that from the COE exemption if it exists.

And let's get into the rates here. VA obviously has very good rates. Lowest rate option here: 5.5% with no down payment, which is pretty amazing. That's 2.291 discount points of cost. So obviously, we'll need to cover some cost there. Our par rate option 6.25 is the best option here. I would say right at par, almost 0.25 towards us a little bit of a lender credit here. And remember, this is to actually purchase with 0% down. Of course, there needs to be some closing cost coverage.

Let's look at the final loan amount because we're going to finance that 2.15 here. So this is the final loan amount for 0% down, and there is no monthly mortgage insurance for VA.

So let's get into our other VA options. Our IRRRL—interest rate reduction refinance loan here. Veterans that already have a VA loan and just need to reduce the rate. No cash-out is eligible. So there's no cash-out loan, but we can turn the rate. The great thing about VA is we can go 100% and even exceed 100% in some cases. IRRRLs have a funding fee of only 0.5%. Rates are very similar to what you saw before: 5.5% for a cost of 2.29. Our lowest cost option here, 2.5% rate, costing just a touch over par at 0.166.

Another cool feature of VA, the last one we wanna go over, is our 100% cash-out. We can go up to 100% LTV to get cash out of our primary home. So borrowers who have built up some equity may want to not only lower their rate but also get cash out. VA is very unique where they allow up to 100% LTV.

Now not all lenders and programs allow it, but we do have options that do, which is what I pulled up today. Remember, cash-out loans have a funding fee of 2.15% for the first use. Typically, subsequent use for most borrowers is 3.3% in this example.

And you see here, our lowest rate option: 6% rate, cost 0.671 discount points. And our lowest cost option here today: 7% rate, cost 0.671. Pretty amazing to get up to 100% LTV. The thing to also consider here is when you start with a loan amount under 100% LTV, keep it under 100%. So you see here, I actually have a 100% LTV loan amount, so we can finish right under 100% LTV when we add in the funded financed.

So that's another great advantage to borrowers who are disabled in some way and have that exemption—they can get a little bit more because they won’t have that financed into the loan. Great options there for our VA-eligible borrowers. We definitely love to help our vets, active service members, and surviving spouses—all always eligible as well with these programs. And as you see there, going to be better than FHA. No big mortgage insurance—you just need to consider that funding fee there. But typically always gonna be the best option.

So thanks everyone for joining us. Let me see if we have any questions in the chat here. Good morning. Hello. Just a couple people saying hi. Thanks for tuning in. Thank you. Thank you.

If you have any questions, feel free to drop them in the chat or go to our website. Any of our loan officers would be happy to help you out. We have over 200, and we're happy to quote VA and give you a full itemized loan estimate or any other loan programs that we have available.

So thanks everybody for joining us. We'll be back later with another episode of Daily Rates Live. Have a great day.