Why Do VA Mortgage Rates Fluctuate

As a VA loan specialist, I spend a good portion of my day speaking to Veterans about interest rates for their VA loans. Sometimes, on the best days of my job, I am able to deliver the good news that the market has moved in their favor and the VA rate is now lower than I had previously offered. Sadly, today is not one of those days, and instead of sharing the great news, I am forced to share some bad news. Rates have increased.

In May of this past year, VA rates skyrocketed following the Memorial Day Holiday. Over a three-day period, the lowest available rate went from 4.5% to 5.25% on a VA loan. Many Veterans ask: What causes these wild swings? But the answer is not nearly as straightforward as the question.

One reason for the swings is because much like stocks, mortgage bonds are traded on the open market. The price of these bonds is what determines the rates on any given day. Also like stocks the prices, these mortgage bonds fluctuate in price from second to second. If the price is high the interest rates get lower.  If the price is deflated the interest rates rise. On a daily basis, bankers look at the return of their mortgage bonds to determine where their rates for the day will be.

But these prices are affected by any number of economic reports, as well. as simple mass hysteria when bad news hits the market. (think events like 9/11) Thus trying to outthink the market is anything but simple, and always unpredictable.

As VA mortgage professionals, we spend our days watching rates so that Veterans can spend their own time concerned with other things. Because of the constant watch that we keep, VA loan specialists are in a particularly good position to help Veterans get the lowest available rate on a VA mortgage.

Don’t waste the opportunity to get a rate below 5% on your VA loan. It may be the last opportunity we see to do so for a very long time. so call us today and work with a licensed Loan officer today!

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