Best VA Mortgage Lenders | September 2021


Peter Warden
Military VA Loan contributor

VA loans offer tremendous benefits for eligible borrowers, including:

  1. No down payment
  2. Competitive interest rates
  3. No private mortgage insurance (PMI)
  4. Flexible credit and DTI requirements
  5. No loan limits

But not all VA lenders are created equal. The best VA lenders offer a combination of competitive rates, affordable lender fees, excellent customer service — and comprehensive knowledge of VA loans.

At MilitaryVALoan.com, we’ve identified the companies that excel in these areas, to help you find the right lender for your financial goals.

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  Average Customer Review Score (out of 5) Minimum Credit Score for a VA Loan Best Feature(s)
Veterans United 4.8 640 Extensive VA loan expertise, free credit counseling
Navy Federal Credit Union 4.4 620 Competitive rates
nbkc 4.5 620 Excellent reputation for customer service with few complaints
Rocket Mortgage 4.5 580 User-friendly online platform
USAA 3.7 620 Low fees

Best VA Lenders 2021

1. Veterans United

According to the VA, Veterans United was the biggest lender of VA home purchase loans in 2020. Its expertise with VA mortgage products pushes it to the top of our list.

Veterans United offers a robust menu of VA mortgage products, along with a network of educational resources for VA borrowers.

Pros of Veterans United

  • As the biggest VA home purchase lender, offers extensive VA mortgage expertise
  • Use-friendly online platform
  • Free credit counseling for poor-credit applications

Cons of Veterans United

  • Only offers in-person service in 18 states, which means many borrower will need to use its online or telephone service
  • Slightly higher credit score requirement (640) than other lenders on this list

2. Navy Federal Credit Union

Navy Federal is the world’s largest credit union, with more than 9 million members. It was founded in 1933 with a mission to serve the military community.

Pros of Navy Federal

  • Competitive rates
  • User-friendly proprietary digital platform, HomeSquad
  • Extensive VA mortgage expertise

Cons of Navy Federal

  • Does not offer customized mortgage rate quotes before you’ve completed a full mortgage application
  • Credit union membership is limited to military members, military families and certain federal employees

3. nbkc

National Bank of Kansas City (nbkc), based in Kansas City, Missouri, was founded in 1999. This privately held organization offers a wide range of mortgage programs in all 50 states and takes great pride in its customer service.

Pros of nbkc

  • Average customer rating of 4.9 out of 5
  • Exceptional customer service reviews with very few customer complaints

Cons of nbkc

In-person service is limited to Missouri and Kansas, which means most borrower will need to use its online or telephone service

4. Rocket Mortgage

Rocket Mortgage is one of America’s largest mortgage lenders and servicers. Founded in 2015 by Quicken Loans, the company is well known for its namesake online mortgage lending platform.

Pros of Rocket Mortgage

  • Ranked number 1 by J.D. Power in mortgage origination client satisfaction for 11 years in a row
  • User-friendly online lending platform

Cons of Rocket Mortgage

No network of local branch offices, which means customers without Internet access will need to rely on phone support

5. USAA

USAA originated as an auto insurance company for military service members. Today, they offer lots of products for service members besides just auto insurance, so it’s no surprise this lender gets top marks for VA loan knowledge and customer service.

Pros of USAA

  • Notably low fees
  • No appraisal, title or VA funding fee for VA Streamline Refinance borrowers

Cons of USAA

  • Loan applications cannot be finalized online so borrowers will need to meet with a loan officer by phone or in-person to complete their application and get a quote

Methodology

MilitaryVALoan.com reviewed 12 mortgage lenders that operate online and in-person in the United States. These lenders represent some of the largest mortgage lenders by volume, including banks, credit unions and online lenders.

Our scoring methodology looked at five factors, weighted as follows:

  • Lending flexibility – 10%
  • Customer service – 10%
  • Ease of application – 10%
  • Online experience – 10%
  • Veteran support – 10%

Ultimately, the best lender for you will depend on your specific financial situation and goals. This list is intended to give you a starting point to begin your lender research.

How to compare VA lenders

Not all lenders offer VA loans, which means you’ll need to start by finding a lender who does. You’ll typically be able to find out whether a lender offers VA mortgages by checking its website.

A lender familiar with VA mortgages can help you confirm your eligibility and request your Certificate of Eligibility (COE).

Shopping around can help you find a lender who matches your financial needs — and potentially save you thousands of dollars.

4 tips for choosing a VA mortgage lender

  1. Get pre-qualified. Pre-qualification will help you determine whether you’re eligible for a home loan and how much you can afford to borrow.
  2. Check the lender’s minimum requirements. While the VA doesn’t impose a minimum credit score or a maximum debt-to-income ratio (DTI), individual lenders will have its own minimum requirements for borrowers.
  3. Request at least 3-5 quotes. Getting quotes from multiple lenders could help you save on your mortgage interest rate and closing costs — potentially saving you thousands of dollars.
  4. Review your quotes carefully. Your mortgage quotes will come as Loan Estimates, which are standardized and easily compared. This allows you to clearly evaluate the interest rates, loan terms and closing costs so you can determine which loan option is best for you.

What to consider when choosing a mortgage loan offer

Here are a couple of the variables you might use to determine which mortgage loan offer to take:

  1. Interest rate. Each Loan Estimate may include a different interest rate. At first glance, this may seem like the most obvious way to choose a lender, but it shouldn’t be the only variable you consider. Rates fluctuate daily so there may be some change by the time you settle on a lender and lock in a rate. Also, ask the lender about discount points, which may allow you to access a lower rate. The lender can tell you how much points cost and whether it can help you save.
  2. Fees. Mortgage lenders will impose a variety of fees associated with the loan, including application fees and underwriting costs. Some lenders will list the fees individually while others will lump them together. Compare each lender’s ‘Estimated Closing Costs’ (found at the bottom of page one of Loan Estimate) and ask whether any of them can be negotiated.

Ultimately, the best loan offer depends on your financial situation and goals. Some borrowers may accept a slightly higher interest rate in order to pay fewer upfront fees, if available cash for closing is an issue. Or vice versa.

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Key questions to ask your VA mortgage lender

Before you commit to a VA lender, here are some questions to ask:

  • What VA mortgage products do you offer?
  • What VA refinance options do you offer?
  • Do you offer 100% VA cash-out refinancing?
  • Do you offer the VA Streamline Refinance (also called the VA Interest Rate Reduction Refinance Loan (IRRRL))?
  • Which steps of the mortgage process will occur online and which will occur in person?
  • How long can I expect the VA mortgage process to take?

Best VA Loan Lenders FAQ

What is a VA loan?

VA loans are mortgages backed by the U.S. Department of Veterans Affairs, intended to help active-duty service members, veterans and their families to become homeowners.

Because these loans are backed by the VA, they come with considerable benefits for borrowers, including:

  • No down payment
  • Competitive interest rates
  • No private mortgage insurance (PMI)
  • Flexible credit and DTI requirements
  • No loan limits

What are the VA loan eligibility requirements?

To qualify for a VA loan, you’ll need to meet both the VA’s service requirements and the individual lender’s requirements.

Service requirements include:

  • Serving on active duty in the Air Force, Army, Coast Guard, Marines or Navy, for 90 consecutive days during a time of war
  • Serving on active duty in the Air Force, Army, Coast Guard, Marines or Navy, during peacetime for 181 consecutive days
  • Serving in the National Guard or Air Force or Navy Reserves for six years

Surviving spouses are also eligible, provided they are not remarried.

A VA loan officer can help you request your Certificate of Eligibility (COE), which is the first step in the VA home loan application process. Your COE includes details about your military service and the amount of your VA home loan benefit.

Are VA loans always better than conventional loans?

When it comes to mortgages, there are no one-size-fits-all answers since every borrower has different needs.

That said, the VA home loan program offers considerable benefits when compared to a conventional mortgage, including no down payment, no PMI, flexible credit score requirements and no loan limits.

This means that it’s likely to be the best mortgage option for qualifying borrowers.

How many times can you use a VA loan?

You can use your VA loan benefit as many times as you like, and in some rare cases, it may even be possible to have more than one VA loan at the same time.

However, the VA home loan program is designed to help service members get primary residences, not second homes or investment properties.

To reuse your VA home loan benefit, you’ll first need to restore it by:

  1. Selling the home and paying off your original VA loan
  2. Refinancing your VA loan to another loan type
  3. Having someone else take over your VA loan via a loan assumption

What credit score do you need to qualify for a VA loan?

While the VA doesn’t impose any minimum credit score requirements for the VA home loan program, individual lenders will have its own requirements to determine whether borrowers are eligible. Most mainstream lenders will require a credit score of at least 580.

What are the disadvantages of the VA home loan program?

The VA home loan program offers valuable benefits for borrowers, which generally outweigh the program’s disadvantages. However, there are a few scenarios in which a non-VA home loan may be a better option.

Some drawbacks of the VA home loan program include:

  • VA funding fee. For VA loans, there is a one-time “funding fee,” which allows the VA home loan program to be self-sustaining and continue to offer zero down payment loans without PMI. The VA funding fee is a percentage of the total loan amount and can be paid upfront with your closing costs or financed into the loan.
  • No second homes, vacation homes or investment properties. The VA home loan program is designed to help service members purchase a primary residence and can’t be used for second homes or real estate investments.
  • Lower home equity. With no down payment, it will take longer to accrue equity in your home. However, while there are no down payment requirements for a VA loan, you can choose to make a down payment (which could lower your monthly mortgage payment and even reduce the amount of your VA funding fee).

Do different lenders offer different VA loan rates?

Yes, VA mortgage rates can vary considerably across lenders. It’s important to compare rate quotes from at least 3-5 mortgage lenders to help you ensure you’re getting the best mortgage rate possible.

How much are VA loan closing costs?

VA loan closing costs are typically 3-5 percent of the loan amount. However, this will vary somewhat by lender and some fees may even be negotiable.

Who pays VA loan closing costs?

The borrower is responsible for VA closing costs, though some borrowers may choose to finance the VA funding fee rather than paying it upfront.

Additionally, some borrowers may negotiate “seller concessions,” which would allow the seller to pay some closing costs, typically up to 4 percent of the loan amount.

Can I get a VA construction loan?

The VA does back construction loans, however, not all lenders offer them. You’ll need to shop around to find a lender that does.

It may be easier to finance your home construction with another loan type and then refinance to a VA loan when construction is complete.

Can I get a VA manufactured home loan?

Not all lenders offer VA manufactured home loans though they are available. You’ll need to shop around to find a lender willing to offer VA financing for a manufactured home.

Finding the best VA mortgage lender

Based on the above methodology, here are our picks for the five best mortgage lenders in 2021:

  1. Veterans United
  2. Navy Federal Credit Union
  3. nbkc
  4. Rocket Mortgage
  5. USAA

Comparing lenders will allow you to find the best lender for your financial goals — and help you buy the home of your dreams.

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