Fed loses control of interest rates
On February 19, 2009 the United States Government signed into law the $787 Billion Economic Recovery Plan in an attempt to stabilize our faltering economy and more specifically our housing market. One of the main focuses of this new law was to drive interest rates lower, even to levels that had never been seen before in our history of tracking mortgage rates. The Federal Government’s plan was working until just recently. About two weeks ago the Government seems to have lost control of the interest rate markets and yields and rates on mortgages and treasuries have been rising faster than ever before. Time will tell what tricks the Fed may be able to come up with next in an attempt to drive rates lower. However, I want all eligible veterans to be very aware of a brand new loan product available to veterans that will allow you to have a fixed rate and payment for a minimum of 5 years and that rate is currently around 3.5%!
Eligible veteran home owners can still get rates as low as 3.5%
As part of the Veterans Benefits Improvement Act of 2008, the President signed into law the VA Hybrid Arm. This loan brought much needed relief to a struggling housing market, however very few lenders are proficient enough in VA home loans to really understand why the President okayed this loan for veterans. Because of our extreme media pundits these days, most average home owners, when they hear the words adjustable, variable, or arm, immediately put their guards up and shut down their minds. This is a sad truth, because the VA hybrid loan is nothing like the arm loans talked about in the media, nor should it be feared, but should be embraced by veterans, just as it has been by our governing officials!
Why is a VA Arm Safe and Conventional Arms are not?
|VA ARM||CONVENTIONAL ARM|
|Backed by the VA/Govt||Not backed by anyone|
|Cannot rise for 1st 5 years||could rise in one year in some cases|
|Can only change 1 time a year max||Can change up to 2 times a year|
|Has a 5% max increase||Can go up over 5%|
|Can refinance out of at anytime||May have a pre-pay penalty keeping you in the loan|
As you can see, there is a lot of safety and security in the VA hybrid arm that does not exist on other adjustable type loans. Here is a press release on this topic. Pay close attention to the part about Low VA Rates offering free refinance options!
I work with loan officers that have been offering this loan (VA Hybrid) to veterans that were waiting to refinance and then were caught off guard when rates skyrocketed. If you want to call Flagship’s hybrid loan specialists feel free to call them at 888-657-2848. Good Luck!
Here is a great video to help you learn more.
Video #1 about the VA Hybrid Loan