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 2021.
To determine the best VA mortgage lenders, Bankrate evaluated lenders based on several criteria, including cost (competitive VA loan rates and low or no fees); experience (VA loan volume); and scope of VA loan offerings.
Best VA mortgage lenders
Navy Federal Credit Union
Navy Federal Credit Union serves over nine million military members and specializes not only in mortgages, but also banking services and other types of loans. The credit union is one of the top VA loan lenders, and among its offerings are VA loans for purchases; VA streamline refinancing (an Interest Rate Reduction Refinance Loan, or IRRRL); and Military Choice loans for borrowers who’ve exhausted their VA benefit, with no down payment or mortgage insurance requirement. In addition to VA loans, the credit union offers conventional loans.
Navy Federal Credit Union has very competitive VA loan rates compared to others, but it is only open to military members, veterans and their families. Membership has its privileges, including no charge for loan processing or underwriting, or to relock your rate; the ability to relock your rate up to two times if rates fall; and a rate-match guarantee that pays you $1,000 after closing if the credit union can’t equal a better rate quoted by a competitor.
Navy Federal Credit Union was also named one of Bankrate’s best mortgage lenders overall in 2021.
USAA Federal Savings Bank
USAA Federal Savings Bank is one of the most trusted names among military members and their loved ones, serving more than 13 million with VA loans and a robust suite of other banking, insurance, investment and loan products.
The bank is another top VA loan lender, with VA loans for purchases, VA jumbo loans up to $3 million and VA streamline refinancing (IRRRL) among the options available. It also offers some of the lowest VA loan rates, with the best rates typically reserved for those with a credit score of 740 or higher.
USAA’s benefits include a rapid online prequalification process, and, for IRRRL refinancers, the bank will cover your title cost, VA funding fee, appraisal fee and origination fee.
There are only 11 brick-and-mortar branches for in-person consultations, however, and, of course, VA loans through this lender are only available to eligible members.
Veterans United Home Loans
Veterans United Home Loans is one of the top five VA loan lenders, and for good reason: It offers VA loan products to military families and veterans in every state and enjoys an A+ rating from the Better Business Bureau. It’s no surprise that more than 1,000 Bankrate users rate this lender five out of five stars.
Veterans United Home Loans deals exclusively with VA loans, including VA loans for purchases; VA jumbo loans; VA cash-out and streamline refinancing (IRRRL); and VA energy-efficient mortgages (EEM), which allow borrowers to pay for energy-efficient home improvements when they buy a home or refinance. It also has some of the lowest VA loan rates.
Borrowers who don’t qualify for a VA loan through this lender can take advantage of the “Lighthouse Program,” a no-charge credit counseling service that helps them improve their finances and credit. In addition, borrowers who work with a Veterans United Realty partner agent may be able to save on closing costs or get an even lower rate.
Veterans United Home Loans requires a 660 minimum FICO score, however, which might be higher than some other VA lenders’ requirements. Additionally, it does not make its fees public, and it only has branches in 18 states (with many situated near or on military bases).
BNC National Bank
BNC National Bank is a bank with physical locations, but its mortgage division functions as a hybrid full-service online lender that offers financing throughout the country. The bank has earned strong allegiance from military members and veterans, with VA loans comprising a considerable portion of its business, according to a company representative.
The bank doesn’t charge origination fees on VA loans, and offers manual underwriting for borrowers with special circumstances. Plus, current customers looking to refinance can qualify for a no-cost appraisal.
BNC National Bank doesn’t advertise its VA loan rates or make public its lender fees, however, and if you need to step into a branch, they are only available in just a few states.
Movement Mortgage is more than a catchy alliterative name — it’s representative of a newer breed of combination brick-and-mortar and online lenders.
A top VA loan lender, Movement Mortgage lends in all states, offering VA loans for purchases with no origination fee, as well as VA cash-out and streamline refinancing (IRRRL). Notably, the cash-out program can come with 100-percent cash-out for certain borrowers.
However, the lender doesn’t make its VA loan rates public, so you’ll have to fill out a rate quote form to learn what rates are available and what you might qualify for.
In addition to VA loans, Movement Mortgage offers conventional loans, jumbo loans, FHA loans and USDA loans. Borrowers can obtain fast, free customized rate quotes, and apply for any type of mortgage easily online or by phone. Additionally, most documents can be e-signed in advance, shaving time off your closing.
Who is eligible for a VA loan?
VA loans are available only to borrowers who qualify. To be eligible, you must meet these requirements:
- Be on active military duty or a veteran who was honorably discharged and met 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 qualifications and rules 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 a 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. That means you don’t have to save up a sufficient sum for a down payment.
- You won’t have to pay for mortgage insurance, which a conventional loan requires 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 on how much you can borrow with a VA loan.
However, if you have 20 percent for a down payment, it might make more sense to get a conventional loan instead of a VA loan, since your down payment amount means you won’t have to pay private mortgage insurance (PMI) on the conventional loan, and with a VA loan, you’d be on the hook for the funding fee.
How to choose the best VA mortgage lender
Every borrower’s needs and circumstances are different, but it’s worth it to do your homework and shop around among different VA mortgage lenders. That means paying close attention to credit score requirements; lender fees; estimated time involved in applying, underwriting and closing; and the quality of customer service.
Note that some VA mortgage lenders have been caught 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, as well. 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.