VA loans offer significant benefits to qualified buyers, not the least of which is the 0% down payment option for servicemembers with full entitlement.
But to get a VA loan, you need to apply with a VA-approved mortgage lender.
And not all VA home loan lenders are created equal.
If you’re a VA-loan eligible veteran, active-duty servicemember, or surviving spouse, you’ll want to be choosy about who you work with. Selecting a lender with deep experience in VA loans — and working with the military community— makes all the difference for a smooth and successful homebuying experience.
What's in this Article?
How do I find VA home loan lenders?
The first step toward applying for a VA mortgage is to find a lender that’s approved by the U.S. Department of Veterans Affairs (VA).
A few ways to start your search for a VA lender:
- Check out the Scotsman Guide’s ranking of top VA lenders
- Do a Google search for “VA-approved mortgage lender”
- Call up local banks, lenders, and credit unions and ask if they offer VA mortgages
You can also ask your fellow veterans and active-duty servicemembers what lender they used when buying a home.
Be sure to ask about their experience. Were they happy with the service they received? Did they feel supported? Did they get all their questions answered? Ask them to be as candid as possible.
What questions should I ask about the company?
Buying a home is a huge financial and personal decision, so working with a lender that’s trustworthy and service-oriented is vital. Ultimately, you want a lender that inspires confidence, is dedicated to your success, and has a track record of closing loans on time.
When considering a potential VA lender, ask them things like:
1) Do your loan officers receive any special training in working with veterans? Are there underwriters that specialize in VA loans?
VA loans have some special nuances compared to other mortgage programs. You want to be sure the lender’s team is knowledgeable in VA mortgages specifically — not just mortgages in general.
2) Is the company active with veterans in a charitable or community capacity?
If a lender volunteers or contributes to military or veteran causes, it’s typically a good sign that they’re familiar with the unique needs of the military community.
3) How long does it typically take you to close a VA loan?
The best VA home loan lenders have a track record of closing VA loans efficiently and on time.
4) Does the company prioritize purchase transactions over refinances?
Low rates can mean that lenders get overwhelmed with business. Refis can really gum up the works for lenders, leading to longer closing times for home purchases. The best lending companies put purchase transactions to the front of the line as a matter of company policy.
5) Does the company have a good reputation in your market?
Real estate agents know where you are getting financing based on your preapproval letter. If you’re using a company no one has heard of, or worse, has a reputation of closing late on every transaction, the agent may move your offer to the bottom of the pile. Choose a lender that has a golden reputation among agents in your market. Using a company that closes on time every time will give you a leg up versus other offers.
Questions to ask the loan officer
It’s not just the company as a whole you’ll want to consider. The individual loan officer makes a huge difference, too — and their expertise in VA lending can make or break your transaction.
To make sure you’re getting the guidance you need, interview your potential loan officer like you’re hiring for a job (because that’s exactly what you’re doing).
Here are a few questions you might want to ask a loan officer before deciding to work with them:
6) How many VA loans have you personally closed in the last 6 months?
Ongoing experience ensures that the loan professional sees a lot of situations. He or she has overcome many hurdles for previous applicants and is more likely to close your transaction successfully.
7) What are some strategies you use to encourage sellers to accept an offer with VA financing?
In a competitive housing market, sellers sometimes skip over offers with VA financing. It might be because VA loans require zero down payment and sellers prefer large down payments — or all cash. Additionally, VA loans come with stricter appraisal requirements to better protect Veterans from “lemon” homes. Yet sellers would rather not do repairs. What has the loan officer done to convince the seller and seller’s agent that VA offers are worth considering and even moved to the top of the stack?
8) How accessible are you if I have questions or concerns?
Buying a house is an emotional and stressful experience. It’s amazing how much a simple text or email from your loan officer can help you sleep at night.
9) What systems do you have in place to communicate loan progress?
Most lenders have online portals where you can check the progress of your loan, get notified of needed items, and upload sensitive documentation. Make sure your loan officer knows how the system works and walks you through the login process if you’re not technically savvy.
10) Do you have access to VA’s online portal to pull my COE?
Lenders with approval to do VA loans also have access to a lenders-only portal. But that doesn’t mean your loan officer knows how to use it. Ask if he or she knows how to easily pull your COE from this system and what to do if the COE can’t be accessed immediately, which sometimes happens.
VA loan FAQs
The best VA lenders have a strong track record of helping military servicemembers buy homes. They should be able to demonstrate a deep understanding of VA loans and the veteran experience, and they should have experience navigating the VA loan application process.
Most mortgage lenders require a minimum credit score of 580 to 620 for a VA home loan. However, VA guidelines allow lenders to use their discretion when it comes to credit decisions, so some may have more lenient requirements.
No. A mortgage lender must be approved by the Department of Veterans Affairs in order to issue a VA loan.
To qualify for a VA loan, you’ll need to meet military service requirements based on when you served. You will also need a Certificate of Eligibility from the Department of Veterans Affairs detailing your service and the level of entitlement benefit you have available.
In most cases, you will need to have an honorable discharge as a veteran or be in good standing if you are an active-duty servicemember.
Finally, you will need to meet the credit score, income, and debt-to-income requirements set by your chosen VA lender.
Yes, a VA loan can be denied as any mortgage can, though the Department of Veterans Affairs does encourage lenders to consider every military member who qualifies. If your loan is denied, your lender may be able to suggest steps you can take to improve your chances in the future, such as paying down debt or improving your credit score.
If you have no entitlement benefit available due to having taken out a previous VA mortgage, you may need to repay that loan and request a restoration of entitlement before you can take out another VA loan.
Yes, some VA lenders approve borrowers with 580 credit scores, but not all. Shop around and be upfront about your score when you speak with lenders.
Yes, most VA lenders look for a minimum credit score of 580 to 620, so a 630 score will likely meet their requirements. Minimums vary by lender, though, so make sure you ask your chosen mortgage company before applying what their guidelines are.
Your first steps are to find a VA-approved mortgage lender and apply for your Certificate of Eligibility. A lender can pull your COE, or this can be done through your eBenefits portal with the Department of Veterans Affairs.
If your spouse is the co-borrower on the loan, your lender will pull their credit along with yours. They will pull each of your three credit scores — those from TransUnion, Experian, and Equifax — and take the lowest of your middle scores to determine your loan eligibility.
Here’s what that looks like: Say your scores are 660, 680, and 700. Your spouse’s scores are 640, 655, and 670.
Your middle score is 680, and theirs is 655. Since their middle score is lower than yours, that is the number lenders will use on your application.
If you have significantly higher credit than your spouse, you may want to apply for a mortgage in your name alone as long as you can qualify using only your income. In most cases, higher credit scores equate to better interest rates.
You can take out a loan with someone who is not a veteran or active-duty servicemember. However, the VA guaranty only applies to your portion of the loan, and the lender will need to qualify the other borrower using their credit score, income, and debt-to-income ratio as well. You may need a down payment if you go this route.
Your lender will also have to submit your application for VA approval before they can close the loan if you apply with a non-veteran, non-spouse co-borrower. But if you are borrowing with a spouse, the lender can approve the loan without clearing the application with the VA.
What is a VA joint loan?
A VA joint loan refers to a few scenarios:
- The veteran’s co-borrower is not a veteran and is not their spouse
- Two non-spouse veterans are applying together and neither is using their entitlement
- Both spouses are veterans and both will use their entitlement
- Two or more veterans are applying together and all will use their entitlements
If you apply for a VA joint loan with a non-veteran, non-spouse co-borrower, your application will need to be approved by the VA and you may need a down payment.
VA loans come with some extra requirements, so finding a trustworthy and experienced VA lender is critical to buying a home successfully with these mortgages.
A down payment is required if the borrower does not have full VA entitlement or when the loan amount exceeds the VA county limits. VA loans subject to individual VA Entitlement amounts and eligibility, qualifying factors such as income and credit guidelines, and property limits. Fairway is not affiliated with any government agencies. These materials are not from VA, HUD or FHA, and were not approved by VA, HUD or FHA, or any other government agency.
Some references sourced within this article have not been prepared by Fairway and are distributed for educational purposes only. The information is not guaranteed to be accurate and may not entirely represent the opinions of Fairway.