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Show L- ' VA's home loan interest j rate lowered to 8 percent The Department of Veterans Affairs (VA) reduced is maximum home loan interest rate from 8.5 percent to 8 percent, effective Dec. 20. This is the lowest the VA rate has been in 14 years. In announcing the rate change, VA Secretary Edward J. Derwinski said, "The drop in the rate will have the practical effect of stimulating the economy and boosting the housing industry by allowing more veterans vet-erans to qualify for home loans." The decline in the interest rate from 10 percent since November of last year means that the monthly payment on a typical VA loan of $84,500 has decreased by $121.51 -from $741 .56 to $620.05 . The lower rate also will result in an increase in the number of refinancing loans sought by veterans wishing to lower their monthly mortgage payments by taking advantage of the new lower rate. The last rate change occurred Sept. 18, 1991, when the VA rate was lowered to 9 to 8.5 percent. The last time the VA loan rate dropped to 8 percent was Oct. 18, 1976, and it remained at 8 percent until May 31, 1977. Also effective Dec. 20, VA decreased by one-half percentage point the maximum rates for graduated payment mortgages to 8.25 percent, home improvement improve-ment loans to 9.5 percent, manufactured home loans to 10.5 percent, manufactured home lot-only loans to 10 percent, and manufactured home and lot loans to 10 percent. In fiscal year 1991, VA has guaranteed more than 181,000 home loans amounting to a total of more than $15.4 billion. VA home loans may be used by qualified veterans, service members and surviving spouses to purchase, improve, or refinance a house or condominium, and to purchase or refinance a manufactured home. |