Episode 61, Segment 1: Are Texas Vet Loans the Best Option?
The short answer: It simply depends on your situation. Sometimes, a Texas Vet loan is better than a VA loan, but John thinks that VA loans may actually be a better option most of the time. Find out which program works better for you by listening to the podcast!
The Texas Vet program can be a great opportunity for some vets!
It's a Texas Veterans Landboard loan, meaning there are certain requirements for applying but if you're a veteran and you live in Texas, you probably qualify. You can go to any lender and get a VA loan or you can choose a Texas Vet loan. It's still a VA loan, but the Land Board will offer certain below-market interest rates to help veterans, especially if you are disabled, which will give you an even lower rate.
However, you are usually charged two discount points for applying for the Texas Vet loan. So while you may be getting a lower interest rate, you're paying about $6,000 to get that rate. If you spent that same $6,000 on a VA loan and use that to buy the rate down (AKA, pay the discount points to lower the rate), the rate is actually generally lower than the Texas Vet rate. At Supreme Lending, we can use that same money and use a VA loan to get you a lower rate instead!
Texas Vet rates also are not always the lowest rates, but they are always changing. If you're interested in what they look like this week, you can view them right here. As of last Friday, May 6th, the rate is 3.875% for a Texas Vet loan.
"It's not a bad rate, but you have to pay two discount points to get that," John says. "If you payed us two discount points, we could estimate an interest rate of 3.5-3.75% interest with a regular VA loan!"
One area where Texas Vet loans are a good choice: "If you are a disabled veteran, you can get a loan as low as 3.39%," John says.
VA loans allow a zero down payment and have no monthly mortgage insurance with great interest rates. If you're a veteran using the Texas Vet program and don't want to put any money down at closing, you'll have to pay more money for closing costs. Often, you end up paying more in closing costs if you go with the Texas Vet loan when you could actually save a few thousand dollars in those closing costs if you use a VA loan.
It can be difficult to choose which loan program is best for you. If you'd like John Schutze or Andrew Thurston to take a look at your situation and help you decide how to get the most of your money, contact John or Andrew or give us a call at (512) 524-8310 to learn more.