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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.

All VA loans are not the same. Yes, the mortgage program is administered by the Department of Veterans Affairs, but the actual terms of loans are filtered through local lenders. And every lender has unique business expenses, profit targets and business goals.

How to look for a VA mortgage lender If you’re an active or retired member of the military, being eligible for a VA loan puts you way ahead in the hunt for the best mortgage. But choosing the right VA mortgage lender is essential.

Here are five tips to help you accomplish just that. Read more about each tip after the lender list.

  1. Know your financial numbers. Your credit score, monthly spending and debt-to-income ratio all affect your rate and chances of approval.

  2. Shop more than one lender. Comparing mortgage rates and qualification requirements will help you get the best deal.

  3. Understand the fees. The VA funding fee is always the same, while other fees may be negotiable.

  4. Look at the APR. Unlike the basic interest rate, the annual percentage rate represents the true cost of your loan.

  5. Find the right lender for your situation. Each VA lender offers different mortgage options, services and specialties.

NerdWallet has researched some of the best available VA mortgage lenders to help you quickly find a VA loan for your needs.

Summary of 5 Tips for Finding the Best VA Mortgage Lenders

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at Veterans United

Veterans United: NMLS#1907

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Min. Credit Score

660

Min. Down Payment

0%

at Veterans United


Why we like it

Good for: veterans, active-duty service members and eligible Reservists looking for VA or non-VA loans.

Pros

  • Offers 24/7 customer service over the phone.

  • Has online application and pre-qualification.

  • Offers a free credit counseling service.

  • Employs advisors from each branch of the armed forces.

Cons

  • Doesn’t offer home equity loans or HELOCs.

  • Veterans United has physical branch offices in only 18 states.

  • Information on FHA, USDA and conventional loans is harder to find on their website.

  • Charges higher rates and fees than some other lenders.

Read Full Review

Navy Federal: NMLS#399807

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National / Regional

National

Min. Down Payment

0%


Why we like it

Good for: Military members and their families looking for low-down-payment mortgages.

Pros

  • Offers a wide range of affordable mortgage products designed for military members.

  • Has an online application for preapproval.

  • Offers low rates compared with most lenders.

Cons

  • Website does not provide customized mortgage rates based on credit score or other factors before you apply.

  • Credit union membership is limited to veterans and current military members, their families, and certain federal employees, retirees and contractors.

Read Full Review
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at Quicken Loans

Quicken Loans: NMLS#3030

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Min. Credit Score

620

Min. Down Payment

3%

at Quicken Loans


Why we like it

Ideal choice for convenience and quick-response customer service. Quicken Loans provides just about all the services your neighborhood lender does — with online convenience.

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

  • Quicken Loans 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

Guaranteed Rate: NMLS#2611

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Min. Credit Score

620

Min. Down Payment

3%


Why we like it

Good for borrowers seeking conventional or government-backed loans, and a totally online experience.

Pros

  • Offers the ability to securely upload and digitally sign loan documents.

  • Displays detailed sample rates for many of its loan products.

Cons

  • Doesn't offer home equity loans or lines of credit.

Read Full Review
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at New American

New American Funding: NMLS#6606

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Min. Credit Score

700

Min. Down Payment

3%

National / Regional

National

at New American


Why we like it

Ideal for borrowers who need to be evaluated on the basis of nontraditional credit. New American Funding offers FHA and VA loans, works with down payment assistance programs, and helps borrowers whose credit histories don't fit the mold of traditional banking.

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

Alterra: NMLS#133739

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Min. Credit Score

620

Min. Down Payment

3%


Why we like it

Ideal for Latino and other minority borrowers, millennials, foreign nationals, as well as those seeking a full array of purchase and refinance loans, including jumbo mortgages.

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.

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 star ratings for mortgage lenders are awarded based on our evaluation of the products and services each lender offers to consumers who are actively shopping for the best mortgage. The five key areas we evaluated include the variety of loan types and products offered, online conveniences, online mortgage rate information, and the rate spread and origination fee lenders reported in the latest available Home Mortgage Disclosure Act data. 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