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. This type of loan has some universal requirements, but mortgage lenders set their own rates, so it pays to comparison-shop to get the best deal.

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

Why get a VA loan?

VA mortgages are more popular than ever, thanks to low down-payment requirements and less-stringent eligibility criteria than conventional loans. Some of the benefits of a VA loan include:

  • There is no down payment requirement.
  • There are no limits on how much you can finance.
  • There is no mortgage insurance requirement.

Here are all of the VA loan eligibility requirements and rules as of 2022.

What to look for in a VA mortgage lender

Many banks, credit unions and online lenders offer VA loans, so to narrow down your choices, consider which come highly recommended from either family, friends or online testimonials, which ones have experience in VA loans and which ones offer competitive rates.

5 steps to finding 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 mortgage lenders can set their own standards, so you’ll need to meet these 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

Get recommendations from family, friends and colleagues, especially those who have gotten a VA loan in the past. Social media can be a handy way to get a short list of lenders quickly.

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

You can also research online for high-rated VA mortgage lenders and peruse third-party reviews and testimonials. Check out Bankrate’s best VA mortgage lender picks, too.

Once you’ve asked around, done your homework and have your list, you can see how each measure up to the next two yardsticks: experience and cost. From there, you can whittle down your list until you find the lender that meets your needs and preferences.

Step 3: Seek out VA lenders with experience

VA lenders need to understand specific requirements as well as be able to guide borrowers in choosing the best mortgage for their financial situation. Experience can be an invaluable asset on both fronts. The more borrowers a lender works with and the more scenarios the lender encounters, the better equipped it is to have answers for a variety of problems.

Find out how long the VA lender has been licensed and how many mortgages they issue per year. If you have special circumstances or want a certain interest rate, ask the lender how they can help. Usually, a lender with experience can offer a few solutions.

Don’t be distracted by a big brand — behind those household names are just individual people. Although a certain bank has been in business for 50 years, the person helping you with your loan might have a little or a lot of experience. Some borrowers, especially those who have had multiple mortgages, might not rely on a lender’s experience to help them through the process, so lack of experience isn’t necessarily unsuitable for everyone.

Step 4: Comparison-shop to find the best VA loan rate

Mortgage rates and costs vary by VA lender, so it’s important to do your research before you lock in a rate. In fact, a 2018 Freddie Mac report revealed that borrowers who comparison shopped for mortgages saved money versus those who didn’t — about $1,435 on a $250,000 loan when they got one extra rate quote, and up to about $3,900 with five quotes.

Be sure to get the APR, or annual percentage rate, not just the interest rate. The APR is the total cost of the loan, including all the lender fees, and is typically a better basis for comparison than just the mortgage rate.

Step 5: Close on your VA loan

Once you’ve been preapproved for VA financing and have had an offer on a home accepted, stay in communication with your lender as you move toward closing. At least three business days prior to the closing date, your lender is required to provide you a closing disclosure with a finalized list of closing costs, which might include:

  • Origination fee
  • VA funding fee
  • Any discount points
  • Credit check fee
  • Title search and title insurance costs
  • Recording fee

Bottom line

VA loans offer unique perks, including the option for no down payment, but not every VA lender is created equal. Ask for recommendations, do your own research and consider your preferences to find the VA lender that best fits your needs.