VA Loan Rates

A: Thanks for your letter. Most VA loan rates are not advertised the same way conventional loan rates are advertised. Many lenders that offer conventional loans may also offer VA loans.

To find a good lender with expertise in VA loans, I’d start with the VA regional loan centers (http://www.homeloans.va.gov/rlcweb.htm). Each of the regional loan centers in Atlanta, Cleveland, Denver, Honolulu, Houston, Manchester, NH, Phoenix, Roanoke, St. Paul, St. Petersburg, and Winston/Salem has a website as well as a bricks and mortar office, and is set up to help veterans, active duty personnel, Reserve members and National Guard personnel with purchasing, financing and retaining a home.

The regional loan centers are equipped with people who can help veterans who are behind in the mortgage payments for an existing VA loan. You can call the Loan Administration department for information on bidding on property, short sales, VA discharges, deeds for old installment contracts or the status of a claim.

The loan production department handles questions on eligibility, loan processing, credit, guarantees and assumptions, according to the website. The appraisal department can answer questions on what kinds of properties will be approved for a VA loan.

When shopping around for a good lender, it helps to start with a couple of reputable lenders in your area. You should also check in with a local bank or savings and loan (S&L) institution in your area, particularly if they are active residential lenders who work often with VA loans. You should also contact a mortgage broker in your area along with a national mortgage lender.

Ask each of the lenders to quote you the VA rate and then ask them to tell you what fees they charge in connection with the loan. While VA loans have higher fees than conventional loans, you want to make sure the lender you approach does not add on any additional fees to the loan transaction. If they do add additional fees, then you want to be able to compare the various lenders on equal footing.

If the lender is a good lender for conventional loans and they have experience with VA loans, you should be okay. The key is to make sure that that lender has done enough VA loans to get the deal done. But just because you find a lender that only does VA loans does not mean that the lender will be a good lender.

As far as your equity line is concerned, you should be able to obtain a VA loan to refinance both your loans. Unfortunately, whether the lender will be able to "streamline" your application may depend on your particular circumstances.

While VA loans have not been affected the same way the rest of the mortgage market has been impacted by the current credit crunch, my general impression is that your application for a VA loan will require full documentation.

You may be able to get a "streamlined" loan but I don't know if your circumstances or even the general real estate market in your area would affect your ability to obtain a VA loan with limited documentation, particularly when you are paying off the equity line you have and increasing the amount you want to borrow.

Your best bet is to sit down with a lender with extensive experience with VA loans and go over these issues with him or her.

NOTE: Ilyce R. Glink's latest ebooks are "Credit Scoring Secrets" and "How to Find a Great Real Estate Agent," which are available at her new, all-video website, www.expertrealestatetips.net. If you have questions, you can call her radio show toll-free (800-972-8255) any Sunday, from 11a-1p EST. You can also write to Real Estate Matters Syndicate, PO Box 366, Glencoe, IL 60022 or contact her through her website, www.thinkglink.com ©2008 by Ilyce R. Glink. Distributed by Tribune Media Services.