Finding the Best VA Lender

By Sari R. Updated on 7/28/2017

When a borrower is thinking about taking out a VA home loan, one of the most important pieces of the puzzle is selecting the right lender with whom he or she will be taking out the loan.  

A home purchase is easily one of the biggest purchases a borrower can make. As a result, the borrower will need to ensure he or she is working with someone ethical and reputable. 

Here are five tips that will help borrowers when looking for and working with a VA Home Loan Lender:

Work with an experienced lender.

Experience is one of the most important qualities that a borrower should look for in a VA lender.  VA Home Loans differ from conventional home loans, so it’s imperative that the lender is VA-approved and has several years under his or her belt.  

It’s also helpful when a borrower’s desired lender has testimonials and feedback from previous clients.  This feedback will reflect upon the performance of the lender and will let the borrowers know that is ultimately the lender with whom they want to take out a loan.

Credentials are another factor that borrowers should be on the hunt for when looking for a lender.  Every lender is required to have and disclose licenses and certifications.  If a lender can’t disclose what states they are licensed in or what professional organizations they are a member of, borrowers should look elsewhere. 

Determine if you need a lender or a mortgage broker. 

Borrowers need to see if they need a mortgage broker or a direct lender.  If a borrower doesn’t have the knowledge or time to research the best VA Home Loan mortgage rates, then a mortgage broker is going to be his or her best bet.  

The mortgage broker will be able to offer the borrower a variety of loan packages from a variety of lenders from which to choose rates.

If a borrower opts to work directly with a lender, however, he or she will have a greater amount of flexibility to tailor the loan package to his or her needs.  

Working with a lender will be a faster process than working with a mortgage broker, so borrowers need to keep this in mind if they are in any time crunch.  Working with a mortgage broker first will mean that the borrower needs to pay the broker’s fees as well as the lender’s fees.

Compare Good Faith Estimates (GFEs).

A Good Faith Estimate is a document that every lender is required to provide to their borrower.  The Good Faith Estimate outlines every cost associated with originating the loan.  

These documents are useful because it allows borrowers to uncover hidden fees and required expenses that lenders may charge.  Also, lenders need to be able to justify and explain each single fee, or else the borrower can assume that lender is acting unethically.

The key thing that borrowers need to remember is to compare Good Faith Estimates from every lender that they meet with so that they can see how VA closing costs and fees stack up.  This could make or break a deal since the closing fees and costs of different lenders can differ so greatly.

Watch credit score.

Borrowers should be cautious not to let too many lenders access their credit scores while looking for a lender of VA loans.  Why?  When credit reports are frequently pulled in a short time, a borrower’s credit score might be lowered because the credit bureaus assume that lenders are rejecting the borrower.  

Therefore, borrowers should do as much research as possible about the lender before letting them pull their credit score to avoid confusing mistakes at credit bureaus.

To learn more about how credit scores can affect your credit score, visit Lender411's comprehensive article on credit scores for VA loans.

Speak with your lender regularly.

Borrowers should establish open communication with their lenders from day one by asking questions and asking for advice.  

A reputable, ethical lender should be willing to answer a borrower’s questions and work with him or her to make sure the communication channels are open before entering into any contract.  

The relationship between borrower and lender isn’t a short one, so it’s imperative that both are on the same page from the very beginning. 

Speaking with a lender regularly should also ensure excellent customer service and commitment for the borrower.  An excellent lender will treat every borrower like he or she is their top client.  

Speaking with the lender regularly means that the borrower will have timely updates about the loan and will have all questions answered quickly.  Also, a lender should never pressure his or her borrower into getting a specific type of loan – if this is the case, the lender might not necessarily be committed to meeting the needs of the borrower. 

Finding an Approved VA Loan Lender

Due to the complicated eligibility requirements and military exclusivity of VA loans, finding the right lender may take some time. Always take the time to shop around for the best rates and the fairest loan terms before committing to anything. 

Remember, small fluctuations in interest rates represent hundreds or even thousands of dollars over the course of the entire loan term.