Their Service Entitles Them To Low-Cost Loans. But Veterans Often Pay More.
John. Four is a retired marine corps. Colonel he served for twenty seven years. Did you see the big fish jumped for is giving me a virtual tour of his harbourside house in a development in punto gorda florida. He's got a dock and a little powerboat and can you see the pool. Oh yeah oh. That's gorgeous yeah all right. Can you see the kayaks and the dock. Actually four is making me kind of jealous of his house at the start of the year interest rates were falling and he wanted to refinance with the. Va loan that has alone backed by the us. Department of veterans affairs vets and service members are supposed to be able to an extra low interest rate and better terms that way so you started calling around and he says the company loaned depot told him we can do. Va loan for you. But it's going to be at three seven five percent interest and they had a lot of fees in there but it was a lower rate than he had at the time so he says he was just about to do the deal with lump depot when he happened to see an ad for. Va loan to a company. Called own up. He went through them and he says he paid lower fees and got more than a full percentage point lower on the rate on his three hundred and thirty thousand dollar loan. That means about twenty five hundred dollars a year in lower payments. He he says when he went back and told loan depot about the better deal. They then offered him a much lower rate to as a veteran. You expect you're getting something from the government. I i was shocked that they didn't just tell me outright. What the best rate. What's a lot of veterans. Assume the same thing according to patrick boy adji. He's the ceo of own up. It's a new company that helps people find a good deal on home loans through a group of different lenders. He says veterans think. They're supposed to get a really good interest rate on a. Va loan so many. Don't shop around but says while these loans are backed by the va they're made by private companies and he says some will head people with much higher costs and basically a worse deal than they qualify for. And they're veterans the. Sit there and think to yourself that this person who served our country is now going to get taken advantage of. And they had no clue they had no idea so in his company did a study. They're releasing it today. They took the top twenty lenders for va loans and looked at the annual percentage rate that the companies charged borrowers on all the loans they made last year and so when we looked at the spread candidly. We were quite surprised that it was as wide as it. Was that the best lenders. And the worst lenders were so far apart from one another. The study found that navy. Federal credit union offered people. The lowest rates at the other higher cost end of the spectrum was a lender called new day. Usa it's a new day for veterans. Who want to refinance at me as a vet. The company is a sponsor of the army navy. Football game it runs. Tv ads with plenty of american flags. We wanna do whatever is best for the individual service person. The study found that of the top twenty. Va lenders new day charged. The highest interest rates more than a full percentage point higher the navy federal which over the life of three hundred thousand dollar thirty year loan is more than seventy thousand dollars. More in interest payments new day in a statement said that the study has a quote serious flaw. It said that's because the study lumps together different types of va loans. That are not the same but michael. Hoon is skeptical of that explanation. He's the president of the non-profit center for responsible lending. The information from this lender does not explain their borrowers are being charged so much more than other lenders are charging. Their va borrowers as far as loan depot. The company that john four. I talked to the study. Found that during two thousand nineteen. It's rates were about average. The company is also a recent financial supporter of npr biology. With own up says the big takeaway from his study for him is that people need to shop around and find the best rate that they can and negotiate for the best rate. Because if you don't it could be one of the most costly mistakes you make in your financial life that's good advice for. Va loans and other types of mortgages to chris arnold npr