A VA mortgage is the best mortgage out there today and Ellie Mae can prove it. From its huge trove of mortgage data, the mortgage software company observes that VA mortgage rates have been beating rates for comparable mortgages via FHA, Freddie Mac, and Fannie Mae for the 31st straight month now. VA loans have reported rates 150 basis points down compared to conventional mortgages.
Available to all American military servicemen, VA mortgages not only offer lower mortgage interest rates; they are also among the easiest to qualify for. Military exclusivity aside, VA loans do not require their applicants to put a down payment. And even with this exception, they are not required to pay a private mortgage insurance as well, compared to FHA, Fannie Mae, and Freddie Mac mortgages. Furthermore, eligible borrowers receive additional benefits such as basic allowance for housing and no pre-payment penalties.
Ellie Mae Vs Freddie Mac
Looking closely at the comparison between Ellie Mae and Freddie Mac’s data, however, will reveal a conflict in reported rates. This difference can be accounted for the:
- Types of mortgages included in the data. Ellie Mae only takes into account actual mortgage rates that reached closing and not the bank’s quoted rates as used by Freddie Mac.
- Discount point inclusions. Freddie Mac’s surveyed banks report rates with discount points while Ellie Mae’s rates report those with actual paid discount points which account for a small portion of the borrower population.
- Types of borrowers surveyed. Freddie Mac only surveys prime borrowers while Ellie Mae’s data extend to borrowers of all types.
VA loans offer full financing. That means there is no out-of-pocket requirement as closing costs can be rolled into the loan. And, if you plan to refinance, a VA loan automatically gives you priority to the VA Streamline Refinance Program, otherwise known as the Interest Rate Reduction Refinance Loan under the same VA umbrella, which gives you access to even lower mortgage rates.