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VA Hybrid ARM (Adjustable Rate Mortgage)
The VA Hybrid ARM product provides for an initial fixed interest rate for a period of three or
five years, and then adjusts annually after the initial fixed period.
The 3/1 and 5/1 VA Hybrid ARM products allow a 1% annual interest rate adjustment after the initial
fixed interest rate period, and a 5% interest rate cap over the life of the loan. Interest rate
adjustments must occur on an annual basis, except for the first adjustment which may occur no sooner
than 36 months from the date of the borrower's first mortgage payment on the 3/1 ARM or 60 months
from the date of the borrower's first payment on the 5/1 ARM. The loan term is 30 years for either
of these loans.
INDEX AND MARGINS
The index is the weekly average yield on U.S. Treasury Securities adjusted to a constant maturity of
one year. Also known as the 1-Year Constant Maturity Index. VA ARM loans have either a 2.00%
margin or a 2.25% margin.
LIFE CAP
Initial Note rate plus 5%
ADJUSTMENT CAP
One percent (1%) annually after the initial fixed rate period of 3 or 5 years.
FIRST ADJUSTMENT DATES
Government loans only adjust 4 times per year (January 1, April 1, July 1, and October 1).
The loan's first adjustment will occur with the corresponding adjustment period that follows the initial
fixed period. For example, if the initial period ends in February, the rate will adjust in April
and then annually thereafter until maturity.
3/1 VA Hybrid ARM: the first rate adjustment will occur between the 36th and the 42nd payment due date.
5/1 VA Hybrid ARM: the first rate adjustment will occur between the 60th and the 66th payment due date.
QUALIFYING RATE
Initial Note Rate
FREQUENTLY ASKED QUESTION # 12 [ -more VA Loan questions- ]
- - - - - -
Q: Are You Eligible for a VA Home Loan Guaranty - How do I get proof of eligibility?
A: It's easy to use an online program called ACE--the Automated Certificate of Eligibility--to get started in the VA loan guaranty process, yet can only have this done by a VA approved lender. Unfortunately, the automated system won't work for everyone. Some people don't have enough information in the ACE database, and are required to fill out a VA Form 22-1880, a Request for Certificate of Eligibility. If this applies to you, simply fill out the form and mail it to your regional Eligibility Center along with supporting paperwork including a copy of the DD214 discharge paperwork. Don't send originals of the DD214, a photocopy will do. The certificate of eligibility process can be tricky for veterans who were separated from the military with a discharge other than honorable. In this case the VA must investigate the discharge to insure it was not classified as dishonorable. People who fall into this category should seek help from their local VA office, especially if you need to file an appeal to the results of your request of eligibility.
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VA Loan Rates
for 5/12/2008
30 year fixed
-----------------
0.000 points
6.000%
6.110% APR
15 year fixed
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0.000 points
6.000%
6.190% APR
Life Insurance for Military Members
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