The Best VA Mortgage Lenders of 2022

Knowing who the best VA mortgage lenders are is essential to finding the right one to help you get the home loan you need.

By Karon Warren | Updated Sep 12, 2022 11:50 AM

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The Best VA Mortgage Lenders Options

Photo: depositphotos.com

Guaranteed by the U.S. Department of Veterans Affairs, a VA loan is available to current and former members of the military and eligible surviving spouses. Some of the benefits of a VA loan include a zero down payment, low interest rates, and no requirement for private mortgage insurance. VA loans are available through private banks and mortgage companies, and it’s important to find providers that are experienced in VA loans in order to get the right loan for the borrower’s financial situation. The best VA home loan lenders not only help borrowers get the loan they want, but they also help streamline the process so borrowers can close on their mortgage and get into their home without delay.

  1. BEST OVERALL: Veterans United Home Loans
  2. RUNNER-UP: Navy Federal Credit Union
  3. MOST WIDELY AVAILABLE: PenFed Credit Union
  4. BEST FOR FAIR CREDIT: New American Funding
  5. BEST COMPARISON SITE: LendingTree
The Best VA Mortgage Lenders Options

Photo: depositphotos.com

What to Consider When Choosing the Best VA Mortgage Lender for You

When shopping for the best VA mortgage lenders, it’s important to look for one that will provide the information borrowers need, such as rate quotes and loan terms, without a hassle. Borrowers also should look for a VA mortgage lender who can keep their VA loan application progressing by gathering the required documents, scheduling the appraisal, and keeping in touch with the borrower throughout the process so they won’t have to wait to close on their mortgage.

Minimum Credit Score

As is the case with any type of mortgage application, a VA borrower’s credit history will be considered. Although the VA does not require borrowers to have a minimum credit score, the VA requires all mortgage lenders to consider the borrower’s entire loan profile. That being said, even the best VA lenders may have a minimum credit score requirement. There are some VA mortgage lenders who will accept a minimum credit score of 580, but most require a score of at least 620. It’s important for the borrower to make sure their credit score meets these minimum requirements before shopping around at the top VA loan lenders.

Quote Process

The best VA loan lenders offer prospective borrowers the ability to provide information online in order to get a quote for mortgage rates. Mortgage rates refer to how much money the borrower will pay the lender for loaning them money for the home loan, so this is a key factor to ensure borrowers don’t pay too much for a VA loan. Although online quotes may be available in minutes, quotes offered online often are approximate rates, not exact rates, so keep that in mind when shopping for a VA loan. VA mortgage lenders often will provide quotes by phone as well, and these may be more accurate than online quotes. With some VA mortgage lenders, the borrower may have to provide certain financial information, either online or by phone, and wait for the lender to get back with a quote.

Term Options

When searching for “VA loans near me,” it’s important to keep the mortgage term in mind. This refers to how many years the borrower will have to pay back their VA home loan to the lender. Many mortgage loans, VA or otherwise, have a term of 30 years, though there are often shorter terms available, and sometimes longer terms are available as well. In general, the longer the term, the lower the borrower’s monthly payment will be, but that also means the borrower will pay more in interest over the life of a 30-year loan than a 15-year one. When determining a budget, homeowners will need to keep their preferred VA mortgage term in mind to make sure the loan they are offered is what they want. They can share their preferred term with VA loan lenders to see what options are available to them when purchasing a home.

Closing Time Frame

The closing time frame of a mortgage refers to the length of time between the VA loan application process and the funds being available to purchase the home. Closing time frames vary by lender, but they typically range from 30 to 60 days. The timing is based on how streamlined the process is, meaning how easy it is to submit all required documents including a home appraisal report; how long the underwriting/approval process takes; and how long it takes to schedule the closing at which time all the documents are signed and any closing costs or fees are paid. Generally, the shorter the closing time frame, the sooner the borrowers could be in their new home.

Annual Percentage Rate

When it comes to VA mortgage interest rates, borrowers will hear two terms thrown around: interest rate and annual percentage rate. The interest rate is the amount of money borrowers will pay the lender for giving them the loan. The annual percentage rate includes the interest rate as well as the other costs borrowers pay for the mortgage loan, which include points, fees, and other charges. Points are up-front fees paid in order to receive a lower interest rate over the life of the loan. Typically, the APR will be more than the interest rate on a VA loan. When shopping around for the best VA mortgage lenders and terms, always compare APRs to see which one is the lowest.

Our Top Picks

To choose the best VA mortgage lenders, we looked for companies that had good loan programs, reasonable closing time frames, and customer-friendly options such as the ability to lock in interest rates.

Best Overall

Photo: veteransunited.com

Why It Made the Cut: Veterans United Home Loans offers programs to help make the entire home-buying process easier for VA home loan borrowers.

Veterans United Home Loans offers two programs that aim to help the borrower move easily through the home-buying process. The Lighthouse Program helps customers strengthen their credit over time to put them in a better position to buy a house. Through Veterans United Home Loans’ sister company, Veterans United Realty, borrowers can work with VA-specialized real estate agents who know the ins and outs of VA mortgage loans and can help make the process simpler. While Veterans United Home Loans has been noted for having higher-than-average fees and interest rates on VA loans, these programs are a benefit not to be overlooked.

The VA also ranked the company as the number one provider of VA home purchase loans in the first quarter of 2022, speaking to the company’s experience in servicing VA loans. In fact, the company has been the top VA purchase loan lender for 6 consecutive years.

Specs

  • Minimum credit score: 620
  • Quote process: Online, phone
  • Term options: 15 or 30 years
  • Closing time frame: 30 to 45 days
  • APR: 3.875 to 4.625%

Pros

  • Lighthouse Program helps customers strengthen their credit before buying a home
  • Veterans United Realty provides VA loan-familiar real estate agents
  • Top VA purchase loan lender for 6 consecutive years

Cons

  • Reported higher-than-average fees and interest rates

Runner-Up

The Best VA Mortgage Lenders Option: Navy Federal Credit Union
Photo: navyfederal.org

Why It Made the Cut: Navy Federal Credit Union offers a relatively fast closing time frame and several programs to assist borrowers in moving through the VA loan process and managing their loan online.

Navy Federal Credit Union has a program called Freedom Lock, which offers borrowers the ability to lock in the lowest interest rate available for up to 60 days in addition to offering a relatively short closing time frame of around 30 days. The lender also offers the Realty Plus program, which links customers with local real estate agents who are familiar with the VA loan process. Borrowers who utilize this program could receive up to $9,000 cash back after closing. Another program, Home Squad, allows borrowers to manage their loan online.

Potential borrowers must be members of Navy Federal Credit Union in order to get a loan. However, this is not a big hurdle, since Navy Federal allows new customers to open an account easily by setting up a Membership Savings Account with just $5. When they do, customers also can enjoy such member benefits as receiving dividends and reduced loan interest if there are any surplus funds each year.

Specs

  • Minimum credit score: 620
  • Quote process: Online, phone
  • Term options:10 to 30 years
  • Closing time frame: 30 days
  • APR: As low as 3.941%

Pros

  • Freedom Lock offers the ability to lock in the lowest possible interest rate
  • Realty Plus service provides VA loan-familiar real estate agents
  • Home Squad service helps customers manage their loan entirely online
  • Wide range of term options offered

Cons

  • Customers must be Navy Federal Credit Union members

Most Widely Available

The Best VA Mortgage Lenders Option: PenFed Credit Union
Photo: penfed.org

Why It Made the Cut: Pentagon Federal Credit Union (PenFed) advertises that it lends to military borrowers outside the United States and in certain territories and countries, which can be a great benefit for borrowers who are stationed overseas.

Unlike many other VA mortgage lenders, PenFed Credit Union works not only with borrowers based in the United States, but also those who are stationed overseas in certain territories and countries that include Puerto Rico, Guam, Germany, Spain, Italy, the U.K., and Okinawa, Japan. PenFed’s average closing time frame also is decent, ranging between 30 and 40 days. When ready to close on their VA mortgage loan, borrowers could receive up to $2,500 in lender credits, which can help cover extra costs like closing fees and moving fees.

There are no rates listed on the website, which can be a barrier when trying to get a sense of lenders’ average rates. However, potential borrowers can request a quote online, which can lead to a more realistic rate.

Specs

  • Minimum credit score: 620
  • Quote process: Online
  • Term options: 15 or 30 years
  • Closing time frame: 30 to 40 days
  • APR: Not listed

Pros

  • Wide service area that includes Puerto Rico; Guam; Germany; Spain; Italy; Okinawa, Japan; and the U.K.
  • Customers can get up to $2,500 in lender credits

Cons

  • Average interest rates not readily available

Best for Fair Credit

The Best VA Mortgage Lenders Option: New American Funding
Photo: newamericanfunding.com

Why It Made the Cut: New American Funding is lauded for its focus on diversity and inclusion, which includes educating underserved communities about how to attain home loans, including VA loans.

New American Funding focuses on diversity and inclusion among borrowers across the United States (with the exception of borrowers in New York and Hawaii); in fact, the company offers customer support in Spanish, making it a good choice for Hispanic customers. The company also offers programs to educate underserved communities about how to attain home loans, including VA loans. And, unlike many other VA mortgage lenders, New American Funding accepts a minimum credit score of 580 and uses alternative data such as rent and utility payments rather than solely using credit data to evaluate a borrower’s creditworthiness.

Closing time frames are not readily available, which can make it difficult to compare New American Funding’s loan terms with competitors. However, borrowers can receive a quote online.

Specs

  • Minimum credit score: 580
  • Quote process: Online
  • Term options: 15 or 30 years
  • Closing time frame: Not listed
  • APR: 3.5 to 4.072%

Pros

  • 580 minimum credit score requirement
  • Spanish-speaking customer service representatives are available
  • Focus on diversity and inclusion

Cons

  • Not available in New York or Hawaii
  • Average closing time frames not readily available

Best Comparison Site

The Best VA Mortgage Lenders Option: LendingTree
Photo: lendingtree.com

Why It Made the Cut: Although not a VA mortgage lender, LendingTree is a comparison site that provides customers with a wide range of options to choose from when searching for “VA lenders near me.”

Shopping for the best VA mortgage loan can be time-consuming, which can be a challenge for military members who may be in a hurry to find a loan if they are moving quickly and don’t want to have to rent at first. LendingTree does the research for borrowers, bringing together a list of loans to choose from so borrowers don’t have to apply to multiple lenders to get an initial quote. When searching for loan options, LendingTree will run a soft inquiry on the borrower’s credit so it won’t negatively impact their credit score.

However, the application process generally requires more steps because the borrower will also have to fill out an application with their chosen lender. Also, some borrowers have reported receiving unwanted calls from lenders after filling out an application with comparison sites such as LendingTree. However, these calls could provide the opportunity for borrowers to find a better rate than they otherwise would have.

Specs

  • Minimum credit score: Varies
  • Quote process: Online, phone
  • Term options: Varies
  • Closing time frame: Varies
  • APR: Varies

Pros

  • Multiple VA loan options available through one marketplace
  • Application process uses a soft credit inquiry

Cons

  • Loans not serviced directly by LendingTree
  • Lengthy application process with more steps
  • Potential for persistent telemarketing calls

Our Verdict

We chose Veterans United Home Loans as the best overall VA mortgage lender because it offers several programs designed to help borrowers through the VA home loan process with ease. We selected Navy Federal Credit Union as the runner-up choice because it has a relatively short closing time frame thanks to a streamlined loan process.

How We Chose the Best VA Mortgage Lenders

To find the best VA mortgage lenders, this curated list was developed from extensive research by our team. While researching the best VA mortgage lenders, we looked at things like average closing time, the quote process, minimum credit scores, rate terms, and average interest rates. In addition, we considered any extras that would be beneficial for service members, veterans, and their family members. For example, in addition to providing the actual VA loan, some of our picks have special programs designed to help service members find their home or offer financial advice to help them save for a down payment.

Before You Choose One of the Best VA Mortgage Lenders

When shopping for the best VA mortgage lenders, it’s important to remember that this type of loan is not available for everyone. VA loans are specifically designed for active and former members of the military and eligible surviving spouses, so borrowers will need a certificate of eligibility documenting their military service as part of their loan application. Also, it’s important to shop around for a VA mortgage lender to find the best loan terms, including interest rates, closing time frames, and credit score requirements. All VA mortgage lenders evaluate borrower applications differently using a variety of factors, so loan terms will differ from lender to lender.

Cost of Using One of the Best VA Mortgage Lenders

When borrowers apply for a VA mortgage loan from a VA mortgage lender, there will be a number of costs involved, such as loan fees, closing costs, and in some cases, a down payment. Although the VA doesn’t require a down payment on a VA mortgage loan, there may be some VA mortgage lenders that do. Therefore, when shopping around for a VA loan, it’s important to find out what these costs are so borrowers can accurately compare loan offers. These fees and costs will help borrowers eliminate VA mortgage lenders that are not a good fit in favor of those who have the lowest costs associated with obtaining a VA mortgage loan.

The Advantages of Using One of the Best VA Mortgage Lenders

Getting a home loan from one of the best VA mortgage lenders offers many benefits for active and former members of the military and eligible surviving spouses. These include not having to make a down payment or pay for private mortgage insurance, receiving low interest rates on the loan, and paying a limited amount of closing costs. And, as shown in our research, some of the best VA mortgage lenders also offer programs that help borrowers navigate both the home buying and home loan processes.

  • No down payment or private mortgage insurance requirement
  • Relatively low interest rates
  • Limited amount of closing costs

FAQs

Shopping for a VA mortgage loan can be time-consuming and confusing for borrowers who don’t have a lot of experience applying for a home loan or purchasing a new home. These are some of the most frequently asked questions that pop up while searching for the best VA home loans.

Q. What is the current interest rate for VA loans?

Interest rates for VA loans, like all loans, fluctuate frequently, so it’s important to check with individual lenders to see their current rates.

Q. Can I get a VA loan with a credit score of 500?

Many VA mortgage lenders have a minimum requirement of 620, but some lenders will go lower when considering alternative credit data. However, it will be harder for borrowers to find a lender with a credit score of 500.

Q. What is the minimum credit score for a VA loan?

This depends on the lender; the VA does not have a minimum credit score requirement.