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Let’s cut right to the chase concerning Minnesota VA loan rates; VA mortgage rates are lower now than they were one year ago! That’s right, even though we’ve seen some Minnesota VA home loan rate rises in recent months they are still lower than last year. Mortgage rates for our veterans are about a quarter point lower now than they were at this time in 2010. Frankly, our predictions of rate increases may have been premature.

The Minnesota housing market remains very fragile. The number of foreclosures is still extremely high here in Minnesota. According to California based Realty Trac the number of foreclosure filings in Minnesota in January was almost 2,600. This includes default notices, scheduled auctions and bank repossessions. That is a bit fewer than one year ago but the decline may be deceiving. The head of Realty Trac says it may not be a recovery in the housing market but a sign that lenders are bogged down by the number of foreclosures month after month. So what does this mean for VA loan rates?

As long as the housing market remains in such a slow state the demand for VA mortgage loans is lower. When demand remains low, prices (rates) can remain low. The experts are saying they don’t see interest rates rising anytime soon. Some say it may be the end of 2012, others say it could happen this year.

If you are considering refinancing your VA loan, refinancing from a conventional loan to a VA loan (this is a very, very smart idea by the way!), or purchasing a home with a VA loan we recommend you do it sooner rather than later. In previous blogs posted here I relate the story of refinancing my own home loan when rates dropped to 10% because it was such a good deal! Keep that in perspective. We’re now in the 5% range. Remember, these are 100% financing with a VA mortgage loan. No monthly mortgage insurance premiums that plague conventional lending.

While we write about Minnesota VA loans because that’s where our family based business is headquartered this information on VA mortgage rates applies nationwide. VALoansMN.com focuses on Minnesota because we have become this state’s number one VA lender.