Many veterans think going directly to the source to refinance their VA home loan will guarantee they will receive the lowest interest rate on the market. This is not always the case. Lenders are willing to give broker loan companies wholesale or cheaper pricing because of a number of loans the lender closes. Companies like Chase can afford to give a broker closing hundreds of loans a lower interest rate than they can give one person walking into the bank looking to lower their rate. This provides a great opportunity for veteran homeowners to take advantage of lower interest rates than they can get directly from the lender. To further emphasize the point, let’s compare Chase giving discounted rates to brokers to buying an item at Walmart.
Walmart purchases thousands and thousands of dollars of product from companies all over the world. If someone enters a Walmart store today to buy a box of Lucky Charms for $3 would be cheaper than going directly to General Mills and purchasing that box of Lucky Charms. Why? Because Walmart buys thousands to millions of dollars of product from General Mills so they offer major discounted prices to Walmart. If you decided to go buy one box of Lucky Charms through General Mills the cost of the box of cereal and the time it would take you to get that box of cereal would make purchasing the item through Walmart an obvious choice.
The same concepts apply to refinancing your VA home loan. If a veteran walked into Chase Bank today to refinance his home loan, there is a good chance the interest rate they offer would be higher than going with a broker approved by Chase. Why? Brokers closing hundreds to thousands of loans are given discounted pricing giving the consumer a better interest rate.
The owner of LowVARates.com, Eric Kandell, has been in the VA mortgage industry since 1997 and understands brokers can offer wholesale rates.
“When we show some of the representatives at various banks the wholesale rates we are able to receive, most of the time they tell us they are unable to compete with those rates,” Kandell said.
Chase and other banks still have the capability to refinance your home loan through one of their branches or offices. As a consumer if you refinanced through one of Chase’s offices that would be considered dealing with a “retail channel.” A retail location would basically be the Chase Bank in your local town. If you were to call Chase Bank today you would have access to their “retail rates”. However, if you contact a Chase broker you would have access to their “wholesale rates”.
Giving brokers the discounted or “wholesale” rate, makes perfect sense for both the broker and the bank, just like it makes sense for General Mills to offer Lucky Charms at a discounted rate to Walmart. Chase understands that brokers, like LowVARates.com, can close thousands of loans nationwide and make them more money than trying to ONLY sell loans directly through them.
Veterans and military families with high-interest rates should make sure to check their options to ensure they are making the best financial decision for their families. With rates at historic lows, many veterans can be lowering their monthly payments hundreds of dollars per month and save thousands of dollars over the life of the loan.
Make sure to check VA streamline rates through Chase Bank, LowVARates.com and other brokers to see which can offer you the best streamline for your situation.