How to get a super-low VA loan rate

The ultra-cheap VA loans are being offered by United Wholesale Mortgage, or UWM, one of the nation's largest mortgage lenders and the same company that's providing conventional 30-year mortgages at rates as low as 2.5%.

Rates through UWM's new VA loan program range from 2.25% to 2.375% and are available to both buy homes and refinance existing mortgages.

The loans "will support veteran borrowers in one of the strongest purchase seasons on record due to pent up demand created by COVID-19," UWM says in a news release.

Demand for mortgages is up sharply from a year ago because the spring selling season got off to a late start as buyers waited for states to ease their coronavirus restrictions. Borrowers also have been motivated by the lowest mortgage rates in history — a side effect of the financial market turmoil caused by the virus.

Since UWM is a mortgage wholesaler, its VA loans are not offered directly by the company but through independent mortgage brokers who work with the lender.

UWM says its goal is "to make the dream of home ownership easy, affordable and accessible to all Americans, especially veterans who have sacrificed so much."

Who can get a VA loan?

VA home loans are available to:

  • Service members and veterans who put in at least 90 consecutive days of active service during wartime.
  • Service members and vets who put in at least 181 straight days during peacetime.
  • Americans who put in six years of service in the National Guard or Reserves.
  • Spouses of service members who were killed in the line of duty or who died from a service-related disability.

Borrowers must get an official "certificate of eligibility," either through a lender or by applying for a certificate online or through the mail.

You can get a VA loan even if you've been through bankruptcy or foreclosure, and you can qualify with a credit score as low as the 600s. (Haven't seen your credit score in a while? You can easily check it for free.)

You never have to make a down payment or pay private mortgage insurance with a VA loan, but most borrowers are required to pay a "funding fee" of up to 3.6% of the loan amount, to help cover the VA's expenses.

Scoring a microscopically low mortgage rate should take some of the sting out of the funding fee.

Remember, VA loans come from private lenders, not the Department of Veterans Affairs itself. Experts recommend that you gather mortgage quotes from several lenders to find the lowest VA loan rate available to you.

About the Author

Doug Whiteman

Doug Whiteman

Editor-in-Chief

Doug Whiteman is the editor-in-chief of MoneyWise. He has been quoted by The Wall Street Journal, USA Today and CNBC.com and has been interviewed on Fox Business, CBS Radio and the syndicated TV show "First Business."

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