VA DROPS INTEREST RATE ON HOME LOANS, ENCOURAGES VETERANS TO REFINANCE
VA DROPS INTEREST RATE ON HOME LOANS,
ENCOURAGES VETERANS TO REFINANCE
WASHINGTON, Aug. 11 /PRNewswire/ -- The Department of Veterans Affairs (VA) is reducing its maximum home loan interest rate from 8 to 7.5 percent, effective Aug. 12. This is the lowest rate the VA has been in 19 years, and the second time in less than two months that the rate has been lowered.
In announcing the reduction, VA Secretary Edward J. Derwinski said, "The drop in the rate will mean more veterans will qualify for home loans, which will have the practical effect of stimulating the economy and boosting the housing industry. It also means that many veterans can take advantage of the lower rate and refinance their existing loans at a great savings."
One year ago, the interest rate on VA-guaranteed home loans was 9.5 percent. The decline to 7.5 percent means that the monthly payment on a typical VA loan of $86,000 has decreased by $121.26 -- from $723.26 to $602.00.
Also effective Aug. 12, VA will decrease by one-half percentage point the maximum rates for graduated payment mortgages to 7.75 percent, home improvement loans to 9 percent, manufactured home loans to 10 percent, manufactured home lot-only loans to 9.5 percent and manufactured home and lot loans to 9.5 percent.
The lower rate also is good news for veterans interested in refinancing their existing mortgage loans. Recently, more than 33,000 veterans have refinanced their loans to take advantage of lower interest rates, and there are still more than 1.5 million veterans with VA-guaranteed loans with interest rates of 9.5 percent or higher. If those veterans took advantage of current rates, they could realize significant savings. Veterans are encouraged to contact a private lending agency for more information on VA refinancing loans.
/CONTACT: U.S. Department of Veterans Affairs, Office of Public Affairs, 202-535-8300/ CO: U.S. Department of Veterans Affairs ST: District of Columbia IN: SU: ECO
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