July 1st, 2016 7:19 AM by Joan Rusco
What’s happening with VA mortgage rates here in Minnesota or in Wisconsin and the Dakotas reminds us of what we see in a summer weather forecast. VA mortgage rates are definitely in a “low pressure zone”. Given last months vote by Brits to exit the European Union we watched the bond market. As we at VALoansMN have written on these pages before if you want to see what’s happening with VA mortgage rates watch the bond market. The U.S. bond market has been on fire. By that we mean prices have been going up. Investors who own bonds have seen prices increase and when prices increase it’s because the rates are declining. Rates always decrease when prices increase. We at VALoansMN watch the 10-year bond because that instrument is a major player in mortgage rates. Soon after the British vote to leave the yield on the 10 year treasury dropped to it’s lowest level since the summer of 2012. They climbed back up a little but as of this writing the yield on the ten year treasury is down almost three quarters of a point! That’s why there is very little pressure for VA loan rates to increase. In fact, there’s more downward pressure than a likelihood of an increase.So what rate are you likely to get on your VA mortgage? The short answer is a very, very low rate. Of course there are lots of factors that influence your mortgage rate. There’s your credit score, your history of borrowing and about 3 dozen other factors. There is no one rate for all veterans seeking to buy or refinance a home. But generally speaking, this summer rates remain extremely low. These low rates give you a lot of buying power when you go into the real estate market. Let us pre-approve you for a VA loan so when you and your realtor find that new family home you go to the bargaining table (actually your realtor will likely be the one at the table) with a lot of power.So bring on those summer low pressure systems that tend to float in and out of our area and just know that right now there is very low pressure on VA mortgage rates to make a move upward. It remains a great time to buy a house or refinance your existing mortgage. Remember you need no money down when using your VA mortgage benefit!