Choosing the right VA lender is incredibly important. Not only does it impact your VA home loan experience but it also influences your costs.
Are you trying to decide between VA home loan lenders? Here’s how to choose the best one.
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How to find the best VA mortgage lender
Who is the best VA home loan lender? There’s no clear-cut answer to that one. All lenders offer different rates, fees, and levels of service, and their qualifying standards can vary, too. To find the best one for your unique scenario, you’ll need to:
#1. Prepare for your mortgage application
Before you can begin applying for VA loans, you need to set the stage first. This means saving up for your down payment (if any), getting your credit and budget in order, and avoiding big financial changes in the months before applying for a mortgage (jobs, income, new credit cards, etc.).
You should also begin gathering up all the documentation you’ll need for your loan. This includes your Certificate of Eligibility (COE), your bank statements, and your tax returns.
#2. Set your budget
Your next step is to prep your budget. Before you can begin the loan process, you need to have a good idea of what you can spend each month on your mortgage payment. Keep in mind your mortgage will also include things like homeowners insurance, property taxes, and HOA dues, if necessary.
You can use our VA loan calculator to get a good idea of what you might be able to comfortably spend on a house.
#3. Familiarize yourself with your mortgage options
You already know you want a VA loan, but there are actually several types of VA mortgages to choose from. It’s helpful to know what type of mortgage you want before you start shopping.
For example, if you’re a Native American veteran and are buying on certain federal lands, you’d use the VA’s NADL program. If you’re refinancing, you could opt for a VA cash-out refinance or VA Streamline Refinance (also sometimes known as an Interest Rate Reduction Refinance Loan (IRRRL)).
The VA has a full breakdown of these loan options on its website.
Determining which VA mortgage program you want to use will help narrow down your choice of VA lenders since not all companies offer the full suite of VA loans.
#4. Compare rates and terms from at least 3-5 lenders
Next, it’s time to get quotes from at least three VA home mortgage lenders. This requires providing a little basic information — your income, credit score, and other details — but they usually take only a day or two to receive.
Once you have estimates from each lender, compare them line by line. How do the closing costs and fees measure up? What about the interest rate? You should also factor in the level of service and responsiveness you’ve received thus far.
#5. Get pre-approved
When you’ve chosen the best VA home loan lender for you, it’s time to get pre-approved for your loan. This essentially means the lender has evaluated your financial details and thinks you’re a good candidate for a loan.
To get your pre-approval, you’ll fill out a short application with the lender. Once they’ve gone over it, you’ll get a pre-approval letter stating how much you can borrow and at what interest rate. You’ll include this in any offers you make to show you’re serious about the home.
#6. Read the fine print
Finally, make sure you understand your loan’s fine print. You should have a good grasp on all your loan’s terms before you sign, including:
- What is your closing date?
- Does your rate lock extend through the expected closing date?
- How much money do you need to bring to closing?
- What will your monthly payment be and how will you pay it?
If you have any questions or are unsure about something, ask your loan officer before heading to the closing table.
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Why you should shop around for a mortgage lender
Shopping around for your veteran mortgage lender is incredibly important, especially if you want to minimize your costs as a buyer. According to Freddie Mac, getting quotes from just five lenders can save you as much as $3,000 over the life of the loan.
Some of these savings come from fees and other closing costs. Much of it comes from interest rate discrepancies.
Here’s an example: Say you were quoted a 3% rate on a 30-year, $200,000 loan with Lender A and a 3.25% rate on that same loan with Lender B. It doesn’t seem like much, but Lender A would actually save you $27 per month and a whopping $10,000 in interest over the next three decades.
How to compare mortgage loan offers
To compare your loan offers, you’ll want to look at the loan estimate — a three-page document given to you by the lender. These forms break down all the costs, fees and other financial details of your loan. These loan estimates are standardized, so comparing them line by line is quite simple.
You’ll want to pay particular attention to the loan amount, the interest rate, the estimated monthly payment, and your estimated closing costs. The “Comparisons” section on page 3 can be helpful, too. It shows what your balance will be in five years and can be a good way to compare loan option costs.
Questions to ask your mortgage lender
Before you decide which VA loan lender to go with, make sure you ask them some questions.
You’ll want to know things like:
- How long do you expect the process to take? Some lenders take longer to process loans than others, so be sure and get an estimate before moving forward. You’ll need to know an estimated closing date when making offers and negotiating with sellers. (It will likely play a role in which offer they choose, too).
- Who will be my main point of contact throughout the process? You’re going to have a lot of questions along the way, and you need a go-to person. You’ll also want to ask how you can get in touch with this person. Are they available via phone, email, or text? And during what hours?
- Which parts of the process will be online and which will be in-person? Most lenders will let you do everything remotely and online these days, but it still helps to ask. How will the logistics of your loan work? Where will you sign the closing papers? Get all the details.
You might also ask how often the lender does VA loans. These mortgages can be more complicated than other types of loans, so you want one who’s experienced and well-versed in the process.
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Benefits of a VA loan
VA loans come with countless benefits, but the biggest perk is that they require no down payment.
Because these mortgages are guaranteed by the U.S. Department of Veterans Affairs, lenders can afford to pass substantial benefits along to VA borrowers.
Unlike other mortgage programs, which ask for anywhere from 3% to 20% down, VA loans require no down payment at all. This can offer significant savings right off the bat. (A low-cost FHA loan requires at least $7,000 down on a $200,000 house, for example, while a VA loan requires $0 down).
Some of the VA loan benefits include:
- Competitively low interest rates
- No credit score requirements
- Limits on closing costs
- Loans are assumable, meaning future buyers can take over the loan (and the favorable rate and terms it comes with)
- No private mortgage insurance (PMI)
- No loan limits
- Can be used multiple times
VA loan mortgage rates 2023
When compared to other loan types — conventional loans and FHA loans, for example — VA home loans offer consistently lower rates than loans for the average consumer.
| VA | Conventional | FHA | |
| December 2021 | 2.99% | 3.38% | 3.39% |
| November 2021 | 2.95% | 3.32% | 3.32% |
| October 2021 | 2.88% | 3.22% | 3.22% |
| September 2021 | 2.85% | 3.17% | 3.20% |
| August 2021 | 2.88% | 3.19% | 3.23% |
| July 2021 | 2.94% | 3.27% | 3.27% |
Source: Ellie Mae Origination Insight Report, June 2021
A lower interest rate translates to a lower monthly mortgage payment and substantial savings over the life of your loan.
VA Home Loan Lender FAQ
Do all lenders provide VA loans?
No. Only approved lenders can offer VA loans, so you’ll need to be choosy about which mortgage company you work with. That said, most major lenders are authorized to originate VA loans.
Who is the best lender to get a VA loan from?
That really depends on your financial situation, where you’re buying, your budget, and the level of service you want. A great place to start is our best VA home loan lenders guide.
Who is eligible for a VA home loan?
VA loans are only for active-duty military members, veterans, and their families (including surviving spouses), so there are strict service requirements you’ll need to meet to qualify.
The VA doesn’t set specific financial standards for its loans, though private lenders — the companies who actually issue the loans — do. These vary from one lender to the next, but in most cases, borrowers need at least a 620 credit score and a debt-to-income ratio of 41% or less.
If you fall short of these requirements, you still might qualify. Just make sure to shop around for your lender, work on improving your credit, and consider making a down payment.
What is the VA funding fee?
To get a VA home loan, you’ll need to pay the VA funding fee. This is a one-time cost at closing which helps the VA maintain the VA home loan program and continue to offer valuable home loan products to military homebuyers. The VA funding fee can be financed into your total loan amount and paid down over time.
The amount of the VA funding fee depends on your loan type, the nature of your military service, the number of times you’ve used your VA loan benefit and the amount of your down payment.
What is the minimum credit score for a VA loan?
The VA doesn’t have a minimum credit score for these mortgages, but individual lenders do. These minimums vary and are usually around 620 or 640.
What is a VA direct loan?
This is a loan issued directly by the VA (meaning the VA is the lender). They’re only available for Native American veterans buying or refinancing in certain areas of the country.
What is the max loan amount for a VA loan?
There are no maximum loan amounts for VA mortgages. While there is a cap on how much you can borrow without making a down payment, the loan program technically has no limits.
What is the lowest VA mortgage rate ever?
The lowest VA rates have typically been in the low 2% range. You’ll get lower rates on shorter loan terms (so, 15-year loans typically have lower rates than 30-year ones). Higher credit scores will also help you qualify for lower interest rates.
Can I use a VA loan to buy a second home?
You cannot use the VA loan for a second home or investment property. The VA home loan program is intended to help military service members become homeowners and is specifically meant for the purchase of a primary residence.
Do different lenders offer different rates on VA home loans?
Yes. All mortgage lenders offer slightly different rates and fees. Your rate will also depend on your creditworthiness and the size of your down payment (if any).
Which lenders offer VA home loans for people with bad credit?
There aren’t any bad credit VA home loan lenders per se, but every VA lender sets its own credit score minimums. This is why it’s so important to shop around — especially if you have a low credit score. Generally speaking, most lenders require a score of at least 620 or 640. If your score is below this, you can often make up for it with a larger down payment or by having more in cash reserves.
How do I decide which lender to use?
You’ll want to compare the loan estimates, factor in the service and responsiveness you’re receiving, and look at online reviews and ratings. Not all lenders are created equal, nor will they come with comparable pricing.
VA home loan lenders: The bottom line
Because the Department of Veterans Affairs guarantees VA loans, lenders can offer substantial benefits to veterans, active-duty service members and their families. The VA home loan program includes some of the best mortgage products on the market.
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Source: militaryvaloan.com