Veterans, I hope you had a wonderful holiday recess and a happy new year!
I wanted to shed light regarding significant market changes that impact VA mortgages, specifically VA adjustable rate mortgages.
The Federal Reserve continued to move forward with rate hikes and closed the year with a fourth and final rate hike this passing December, which significantly impacts veterans who currently have a VA ARM or VA Hybrid ARM.
Last December's rate hike by the Federal reserve marked the fourth adjustment made by the central bank within a 12 month timeline, which made 2017 a very different year in this regard.
What's more, the 1 year US Treasury index, which is the benchmark rate for all VA ARM loans, absolutely skyrocketed and now sits at 1.83%. Only six months prior, the 1 year index sat at 1.20%, which marks an increase of over 50% in a short period of time.
What this translates to is a full point adjustment on all VA ARM loans on the next anniversary date of your VA rate adjustment. The significance here is that this rate increase is no longer speculation; rather, this spike represents a full point spike on VA ARM loans based on factual data that any VA mortgage loan holder can simply calculate.
To add some further historical insight on VA ARM loans, if a Veteran obtained a VA ARM loan in 2013, the US 1 year treasury was .55%. I cannot overstate the impact of this as the treasury bond is what determines if your VA loan adjusts higher or lower.
On the flip side, VA fixed rates cap VA mortgage payments at 3.25% fixed, depending on the criteria on your VA loan scenario. If you stick with a VA ARM loan, however, further VA ARM rate fluctuations will translate into an average spike of nearly $200.00 monthly by the second VA ARM adjustment for most Veterans. To make matters worse, even at this point, most VA ARM loans have 3 additional adjustments built into their VA mortgage before the maximum allowable rate is reached.
We refuse to let our veterans lose their financial stability due to rising market conditions and increasing VA ARM rates. With that said, I recommend setting aside some time in which we can discuss this further as to find the most suitable program that will benefit both and your family.
I can be reached at 855-VA-LOAN-0 (855-825-6260). Interested in a VA loan with a fixed rate? See which VA rate you qualify for.
Big salute to all Veterans who served!
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