How to find the best VA lender: A step-by-step guide

For eligible military members, veterans and their spouses, a VA loan is a low-cost financing option that can make it easier to buy a home or refinance a mortgage.

Many lenders offer VA loans, and some even specialize in them. Here’s how to find the best VA mortgage lender for you.

What to look for in a VA mortgage lender

Many banks, credit unions and online lenders offer VA loans. So what distinguishes them?

To find the best VA mortgage lender for you, consider these factors:

• Experience: There are VA lenders and then there are expert VA lenders, as the names of two leaders in the field — Navy Federal Credit Union and Veterans United Home Loans — imply. Find out how long the lender has been issuing VA loans, how many VA loans it originates per year and the percentage of its business that’s dedicated to them. VA loans are complicated, so ideally, your lender will have deep expertise.
• Support: All mortgages require lots of paperwork, but VA loans require some unique documentation, mainly dealing with the borrower’s eligibility and military status. Find out if a lender will help you obtain your Certificate of Eligibility (COE), the right DD-214 form and other specialized docs.
• Fees: All VA loans come with standard VA funding fees. At a minimum, the lender should be up-to-date on the current fee structure and how it applies to your loan. Beyond that, you should know the fees the lender itself charges: loan origination fees, discount points, and others. Does the lender clearly distinguish which fees are theirs and which are the VA’s?
• General features: Don’t forget to consider factors you’d consider with any lender: convenience, responsiveness, account services and, of course, interest rates.

4 steps to find the best VA mortgage lender

Step 1: Confirm you qualify for a VA loan

To obtain a VA loan, you must have a Certificate of Eligibility (COE) based on your or your spouse’s military service, and you must be buying a primary residence, not an investment property or second home.

While the U.S. Department of Veterans Affairs (VA) doesn’t impose minimum credit score requirements, VA lenders can and do, so you’ll need to meet these standards to qualify. These typically include a credit score of at least 620 and a debt-to-income (DTI) ratio of 41 percent or less.

Step 2: Crowdsource VA lender recommendations

You can use social media to create a shortlist of lenders, but if you know other servicepeople who’ve gotten a VA loan, especially if it was recent, their recommendations should carry the most weight.

Ask your referrers what their experience was like. Was it a smooth process? Was the lender able to answer their questions and guide them through the paperwork? If they don’t mind disclosing, the cost of the loan is also useful information. If more than a few people recommend the same lender, odds are it’s a worthy lead.

Once you have a list of lenders, see how each measures up to the next two yardsticks: experience and cost.

Step 3: Comparison-shop to find the best VA loan rate and terms

Remember that, while the VA sets certain mortgage criteria and fees, mortgage rates and costs can and do vary by VA lender. So, as with any loan, it’s important to comparison shop. In fact, a 2023 Freddie Mac report revealed that borrowers who comparison-shopped for mortgages saved money versus those who didn’t — at least $600-$1,200 annually.

Be sure to get the APR, or annual percentage rate, in addition to the interest rate, from each lender. The APR reflects the total cost of the loan, including all the lender fees — so it’s typically a better basis for comparison than just the interest rate. You should also review each lender’s closing costs — typically 1 to 6 percent of your loan amount — and the terms on each loan, to ensure you’re making fair comparisons.

Step 4: Verify your lender’s VA loan expertise

Once you’ve narrowed down your shortlist based on rates, you’ll want to make sure your lender and loan officer can support you when it comes to VA loans specifically. Find out:

• How many of the loans your company issues are VA loans? How many VA loans have you personally closed recently?
• What training do you receive in working with VA loans?
• How long do your VA loans typically take to close?

You can also check your impressions against reviews of the lender or lenders you’re considering.

Benefits of getting a VA loan

VA loans are more popular than ever, thanks to their benefits, which include:

• No down payment requirement
• No loan limit imposed by the VA
• No mortgage insurance
• Lower interest rates than conventional loans

FAQ

• Which lender is the best for VA loans?

  There are many great VA loan lenders. Veterans United Home Loans is a top pick for its availability in all 50 states and fast closing times. Other trusted names include Cardinal Financial, LowRates.com and Navy Federal Credit Union.

• How do VA loan rates compare to conventional loan rates?

  Lenders tend to charge lower rates for VA loans than they do on conventional loans. This helps eligible borrowers achieve lower monthly payments and save money over their mortgage terms.

• Which lenders have the lowest VA mortgage rates?

  Lenders can set their own interest rates and other loan details when offering VA loans, and they’ll compete to draw in customers. That means that the lender with the lowest available rate changes regularly.

• What factors affect your VA loan approval?

  Even if you meet the basic eligibility requirements with regard to military service, you still have to qualify for a VA loan based on your financial profile. This will also determine the interest rate you’re offered. Factors that influence your approval odds include: your credit score, debt-to-income ratio, the price of the home you hope to buy and your income.