August 6th, 2011 12:08 PM by Joan Rusco
Minnesota and North Dakota Veterans, here we sit again. VA loan interest rates are at record lows. Should you be refinancing? Yes and probably not. Huh? Well, here’s the rub. If you could refinance from a mortgage loan carrying a rate of 5% or better you probably should, especially if you’re already in a VA loan.
The first week of August, 2011 the average for a 30-year fixed-rate mortgage was 4.54% according to the consumer information site Bankrate.com. (Incidentally, we were locking our VA loans below that rate this week). To put this in perspective just 6 months ago the average rate was almost 5 ¼%! On the surface it looks like a great time to refinance. But scratch that surface just a bit and you may be disappointed.
There isn’t a week that goes by that we don’t have a Minnesota or North Dakota veteran contact us about refinancing. On too many occasions the news we have for them is not good. Here’s what we’re finding; they have good credit, good income and no equity.
Many Minnesota and North Dakota veterans that come back to VALoansMN.com want to refinance the mortgage loan they used to purchase a home in recent years. Most are doing so with no down payment. It’s a beautiful feature reserved for VA loan clients. The downside is that the housing market has continued its slide. Prices are lower than they were just a year or two ago. In many cases these veterans owe more than their homes are worth. Don’t panic! This value is all paper value. What does it matter if your home is worth less than your mortgage amount if you have no plans to sell? If you are comfortable in your home, if you enjoy driving into your driveway and looking at your home, if it provides your family your housing needs then just sit tight and wait it out. This downturn won’t last forever.
We wish every one of our clients at VALoansMN.com could take advantage of today’s low rates but it just isn’t possible. We know that our clients were happy with what they got when they got it. Don’t be distracted by a rate lower than what you have now. Keep in mind there will likely come a time when your current mortgage loan rate will be well below what’s available in the market place and you’ll feel like the winner you are!