Is there a max rate% on VA loans?

Anonymous — Fri, 21 Aug 2015 12:41:00 GMT

I am using a decently high rated mortgage banker/broker (the fund and sell their own loans) called OmniFund. My mid score is not 620 yet. There are some things I did this month that don't insure I'll be there next month either but I think I have a good chance. So this broker can potentially get us closed even though my score is low. We went into contract 2 weeks ago before getting officially pre approved with a new build home (it's an inventory home so it's due to be done end of Sept). It took almost a week for us to get the official pre approval and escrow to be opened (because of my score it has to be manually underwritten). The main driver to my low score is recent lates within the last 6 months for 4 student loan lines that I didn't realize came out of forebearance and I had to put back in forebearance. I'm trying to GW those. But even if those stick, my mid score is EXP at 593 and I paid down two substantial installment lines. EXP is the only credit bureau where payin down installment lines makes an impact on your score. Either way the first week of September that score will definitely boost. If it hits 620 that becomes my mid score, if it hits higher than that TU becomes my mid score at 622 and I meet the min requirements. If not it will still boost somewhat either way.

The reason I ask all this is because yesterday my LO said he's sending us the loan disclosure docs. With a 620 I was quoted by 2 other lenders AND my current LO a VA rate of 3.875. That's more than comfortable for us. But as of today I sit with a 593 and my LO told me yesterday he submitted the docs to processing with a rate of 4.5% to cover it but he doesn't think it will come out that high. 4.5% makes a huge difference in the monthly payments - ~$100. Honestly I would lose this deal before agreeing to a final % of 4.5% unless it meant we couldn't close on something this year. No matter what, I will definitely have him pull credit again at the beginning of September when my activity for this month posts to the credit bureaus and those installment loans show a low UTIL. If by some miracle my SL decides to grant me the GW adjustment, I will have no late pays on my record for a year which will greatly impact my score. I guess what I'm asking is does the VA have a max rate% (I think right now it's like 4.125%) that they will allow? I'm not sure if I should sign the loan disclosures but request another rate if my score comes back favorable in a few weeks?

Btw I did research on both this broker (company and him personally) and both he and the company have a lot of favorable reviews on both Zillow and Yelp. I know for sure I won't go into the loan accepting a 4.5% interest rate but maybe this is all normal for someone with a bad score and unless it improves its the only way we can get into a house. I'm not sure what my next move should be.

Re: Is there a max rate% on VA loans?

Anonymous — Fri, 21 Aug 2015 13:09:36 GMT

I should also note that we aren't and haven't locked a rate. And we won't with these disclosures either.

Re: Is there a max rate% on VA loans?

Anonymous — Sat, 22 Aug 2015 14:48:52 GMT

I do not believe that there is a max rate for VA loans its all credit based. I had some similar issues with a student loan that I co-signed for my daughter, who decided she was not going to pay once she graduated college. I thought it was going to be the end all for my upcoming dream home purchase using my va loan. There were 2 lates on my credit reports and all of my credit bureaus dropped below the 600 range. I checked around with SEVERAL mortgage brokers (Mod Cut-It is against forum rules to post that info). He was able to get me a great rate even after the lates that were charged.

Re: Is there a max rate% on VA loans?

Anonymous — Sat, 22 Aug 2015 13:17:35 GMT

Sidneyhertz do you mind pm'ing me his info? I just got the GFE from my lender and I'm not comfortable with the rates and high fees. If like to shop a little just to make sure I don't sign a bad deal. I will let this house go and wait a month when my scores will be higher rather than get screwed with a bad deal.

topic Re: Is there a max rate% on VA loans? in Mortgage Loans

Is there a max rate% on VA loans?

Re: Is there a max rate% on VA loans?

Re: Is there a max rate% on VA loans?

Re: Is there a max rate% on VA loans?