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5 Tips for Finding the Best VA Mortgage Lenders

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Being eligible for a VA loan puts you way ahead in the hunt for the best mortgage. Here are five tips to help you find the best VA mortgage lender for you.

Veterans United

at Veterans United

Min. Credit Score

620

Min. Down Payment

0%

Pros

  • Also offers FHA, USDA and conventional loans.
  • Offers 24/7 customer service.
  • You can complete a loan application and pre-qualify online.
  • Registers a low volume of complaints filed with the Consumer Financial Protection Bureau.
  • Offers free credit score education and assistance.
  • Provides a client advocate team staffed by former senior enlisted leaders from each branch of the armed forces.

Cons

  • Doesn’t offer home equity loans or HELOCs.
  • Loans are available in all 50 states, but Veterans United has offices in only about half.
Read full review
National / Regional

National

Min. Down Payment

0%

Pros

  • Wide range of affordable mortgage products designed for military members.
  • Willing to look at nontraditional credit data, such as rent payments, as part of its credit evaluation for certain products.
  • Lower minimum loan amounts than many other lenders.
  • Online application for preapproval with quick decision.
  • $1,000 mortgage rate match program.
  • Operates nationwide.

Cons

  • Charges application and underwriting fees.
  • Origination charge on a typical conventional loan is 1% of the loan amount.
Read full review
Quicken Loans

at Quicken Loans

Min. Credit Score

620

Min. Down Payment

3%

Pros

  • Quicken Loans couples a fully online application with available mortgage advisors for those who want a human touch.
  • Instantly verifies employment and income for more than 60% of working Americans.
  • Offers custom fixed-rate loan terms that are between eight and 30 years.
  • Provides FHA-backed loans, USDA loans as well as products offered by Freddie Mac and Fannie Mae that require down payments as low as 3%.

Cons

  • Doesn't offer home equity loans or HELOCs.
  • If you’re a “look me in the eye” type of customer, you’re out of luck.
  • Doesn’t consider alternative credit data. It just looks at credit scores and debt-to-income ratios, the way most mortgage lenders always have.
Read full review
Min. Credit Score

620

Min. Down Payment

3%

Pros

  • Works with most borrowers as long as they have good credit scores and incomes.
  • Provides a user-friendly digital platform that’s thorough in covering all types of borrowing scenarios.
  • Has a 95% customer satisfaction rate, according to company data.

Cons

  • Charges some fees, such as a $1,290 lender fee which includes a $150 application fee.
  • Offers many products, which might confuse or overwhelm borrowers.
  • Several click-throughs required for personalized rates.
Read full review
New American Funding

at New American

Min. Credit Score

620

Min. Down Payment

3%

Pros

  • Uses manual underwriting to evaluate creditworthiness.
  • Offers full online mortgage application, rate quotes, document upload and loan tracking.
  • Home equity lending sets it apart from most non-bank lenders.

Cons

  • Services not available in all 50 states.
Read full review
Min. Credit Score

620

Min. Down Payment

3%

Pros

  • Offers an ITIN qualification path for undocumented immigrant borrowers.
  • Has a digital application process.
  • Offers several mortgage options for low- to moderate-income borrowers.
  • Has a full Spanish-language version of its website and bilingual loan officers.
  • Borrowers can qualify with income from self-employment and other nontraditional sources.

Cons

  • No mortgage rates published online.
  • Doesn't lend in all states.
  • No home equity loans or lines of credit.
Read full review

5 tips for finding the best VA mortgage lenders

Use these tips to help you find the best VA mortgage lender for you.

1. Know your financial numbers

With most mortgages, that would mean knowing your credit score. With VA loans, it’s more a matter of knowing how much you spend every month — and how much is left over.

To qualify for a loan, the VA looks at your overall ability to repay. However, if your total debt-to-income ratio is over 41%, you’ll likely have to provide proof that you can afford to repay the loan.

That’s when “residual income” comes into play — taking into account all of your monthly living expenses, as well as your estimated mortgage payment, and comparing that to your monthly income.

2. Shop more than one VA lender.

Lenders take the foundation of VA-backed loan standards and add requirements of their own. That includes important things like minimum credit scores, debt-to-income ratios, and interest rates. 

Although the VA doesn’t have a minimum credit score threshold, most lenders do. It’s common for lenders to consider VA loans from applicants with credit scores of 620 or better, but that minimum can vary by lender.

Debt-to-income ratios can be a moving target from one lender to another, too. Some lenders can be more forgiving on such credit standards; others not so much.

» MORE: Compare VA mortgage interest rates

3. Know the difference between the VA funding fee and lender fees.

The VA funding fee will be the same, regardless of the lender you choose. Lender fees are negotiable.

Within three days after applying for a mortgage, you will receive an official Loan Estimate. Since you’re shopping more than one lender, you can compare each lender’s Loan Estimate side by side.

On the second page of the Loan Estimate look for “Closing Cost Details.” Then, under “Loan Costs,” you’ll find Section A, “Origination Charges.” That’s where you’ll find each lender’s total fees. The VA Funding Fee will be in Section B, “Services You Cannot Shop For.”

4. Look for the APR.

Fees and closing costs are built into the annual percentage rate but not the loan’s “interest rate.”

The plain-and-simple interest rate that each lender is offering you is found on the front page of your Loan Estimate, under “Loan Terms.” This is the interest rate that your monthly payment is based on.

The annual percentage rate is found on the third and final page of the Loan Estimate, under “Comparisons.” This is your interest rate after fees are considered.

Here’s what that really means. Say Lender A offers you a 4.5% interest rate. Lender B offers you a 5% interest rate. You would think Lender A is making the better offer.

But when checking the annual percentage rate, Lender A’s loan has a 5.75% APR and Lender B has a 5.25% APR. Lender A is charging you more fees, and most likely discount points to lower your loan’s interest rate.

Now it’s a matter of considering how long you expect to live in the home and if it’s worth the additional fees to get the lower interest rate for a lower monthly payment.

Use NerdWallet’s Mortgage APR Calculator to help you see the difference between interest rate and annual percentage rate.

5. Find the right VA lender for your situation.

Some VA lenders specialize in borrowers with weaker credit while others have strong online capabilities.

We’ve researched the leading VA mortgage lenders and distilled them to the best in high-priority categories below. Also, see our complete list of the best VA mortgage lenders by category.

More from NerdWallet

Last updated on July 2, 2019

Methodology

NerdWallet's selection of mortgage lenders for inclusion here was made based on our evaluation of the products and services that lenders offer to consumers who are actively shopping for the best mortgage. The six key areas we evaluated include the loan types and loan products offered, online capabilities, online mortgage rate information, customer service and the number of complaints filed with the Consumer Financial Protection Bureau as a percentage of loans issued. We also awarded lenders up to one bonus star for a unique program or borrower focus that set them apart from other lenders. To ensure consistency, our ratings are reviewed by multiple people on the NerdWallet Mortgages team.

To recap our selections...

NerdWallet's 5 Tips for Finding the Best VA Mortgage Lenders

  • Veterans United: Best for overall mortgage lenders for VA loans
  • Navy Federal: Best for overall mortgage lenders for VA loans
  • Quicken Loans: Best for VA mortgage lenders with the best online experience
  • Guaranteed Rate: Best for VA mortgage lenders with the best online experience
  • New American Funding: Best for VA mortgage lenders for borrowers with weaker credit
  • Alterra: Best for VA mortgage lenders for borrowers with weaker credit