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If you’re a member of the military, a veteran or an eligible spouse, the government has made it easy for you to obtain a low-cost mortgage in the form of a VA loan. There are many mortgage lenders that offer VA loans, which come with some key advantages, including no down payment and no mortgage insurance requirement. Bankrate has evaluated dozens of mortgage lenders to determine the best lenders for VA loans. Here is our guide to the best VA mortgage lenders in 2022.
To determine the best VA mortgage lenders, Bankrate evaluated lenders based on several criteria, including availability; borrower experience; cost (competitive VA loan rates and low or no fees); and scope of VA loan offerings.
Best VA mortgage lenders
Veterans United Home Loans
|Loan products||Purchase and refinance; VA, conventional, jumbo, FHA, USDA|
|Credit requirements||620 for conventional loans and VA loans|
|Highlight||Veterans United Home Loans offers free credit consulting through its Lighthouse Program to servicemembers with past credit challenges.|
|Loan products||Purchase and refinance; VA, conventional, jumbo, FHA, investment property, flex-term|
|Credit requirements||620 for conventional loans; 680 for jumbo loans; 580 for FHA loans and VA loans|
|Highlight||Rocket Mortgage was rated highest in customer satisfaction for mortgage origination by J.D. Power from 2014 to 2020.|
Navy Federal Credit Union
|Loan products||Purchase and refinance; VA, Military Choice, Homebuyers Choice, conventional, jumbo, investment property|
|Credit requirements||620 for conventional loans and VA loans|
|Highlight||Homebuyers can get up to $9,000 cash back when working with a real estate agent in the Navy Federal RealtyPlus network.|
New American Funding
|Loan products||Purchase and refinance; VA, conventional, jumbo, FHA, USDA, investment property, flex-term, non-QM, reverse mortgages|
|Credit requirements||620 for conventional loans|
|Highlight||New American Funding offers a large suite of loan products, including options for credit-challenged and self-employed borrowers.|
|Loan products||Purchase and refinance; VA, conventional, jumbo, FHA, USDA, HELOC, home equity loan, investment property|
|Credit requirements||620 for conventional loans; 580 for FHA loans and VA loans|
|Highlight||Borrowers can earn a $500 match to go towards a home purchase using Lower’s mobile app.|
VA loan FAQ
Who is eligible for a VA loan?
VA loans are available only to borrowers who meet these criteria:
- Be an active duty servicemember or veteran who was honorably discharged and meets minimum service requirements;
- Have served 90 consecutive active days, at minimum, during wartime or at least 181 consecutive active days during peacetime, or served for six years or longer in the National Guard or Selected Reserve; or
- Be a surviving spouse
To qualify for a VA loan, you must also:
- Secure a VA Certificate of Eligibility (COE)
- Meet your lender’s minimum credit score requirement, generally 620
- Meet your lender’s debt-to-income (DTI) ratio requirement, generally no more than 41 percent (unless there are “compensating factors” that the lender can use to qualify you)
- Demonstrate proof of income
The following requirements also apply:
- You’ll be charged an upfront VA funding fee, which you can roll into your loan or ask the home seller to pay for. This fee ranges from 1.4 percent to 3.6 percent of the amount of the loan.
- You must move into the home within 60 days of closing the loan, although there’s some flexibility with that time frame.
- The loan must be for your primary residence only (no investment properties, second homes or vacation homes).
Is a VA loan better than a conventional loan?
There at least two significant advantages of opting for a VA loan over a conventional loan, even if you qualify for both:
- Unlike a conventional loan, you are not required to put money down with a VA loan.
- You won’t have to pay for mortgage insurance. With a conventional loan, you’ll have to pay for this coverage if you put less than 20 percent down.
Together, these perks can fast-track your dreams of purchasing a home and save you thousands over the life of your loan.
There is also another benefit to a VA loan over a conventional loan: It could be easier to refinance down the line. That’s because of a program called the VA Interest Rate Reduction Refinance Loan (IRRRL), or VA streamline refinance, which allows you to refinance without a credit check, and usually without an appraisal.
In addition, there are generally no loan limits with VA loans.
However, if you have 20 percent for a down payment, it could be more sensible to get a conventional loan instead of a VA loan. You won’t have to pay for mortgage insurance on the conventional loan, and you’ll avoid the VA funding fee.
What are VA loan interest rates?
For a home purchase, the average APR for a 30-year fixed VA loan is currently
How to choose the best VA mortgage lender
Every borrower’s needs and circumstances are different, so explore different VA mortgage lenders. Be mindful of each lender’s credit score requirements, fees, application processing times and quality of customer service.
Note that some VA mortgage lenders have been caught engaging in less-than-reputable practices, particularly making misleading claims about low rates and closing costs. Be sure to do thorough research and review testimonials and ratings from the Better Business Bureau or the Consumer Financial Protection Bureau before committing to a lender or loan offer.
Here are more tips to help you find the best VA mortgage lender.
How to apply for a VA loan
You can apply for a VA loan through a VA mortgage lender, often online or by phone. If your lender has branch locations, you might be able to apply in-person. Keep in mind that not every bank or lending institution offers VA loans, but many of them do. If you need help, you can contact a VA Regional Loan Center for guidance.
Here are more tips to help you apply for a VA loan.
Summary: Best VA mortgage lenders
With additional reporting by Allison Martin