When considering a VA home loan, it’s important to work with a knowledgeable lender who understands the unique requirements of VA loans. Factors like the lender’s experience, reputation, loan terms, and the support they offer throughout the process can make a big difference. In this guide, we’ll explore key considerations to help you evaluate VA loan lenders with confidence.
Key Takeaways
- As with any loan or mortgage, consider a few factors and ask potential VA home loan lenders questions to ensure they fit your homebuying needs.
- When deciding on a VA home loan lender, you’ll want to consider their experience originating VA-backed loans, the lender’s overall reputation, the terms of the VA loan offered, and the resources and support available to you throughout your VA loan and homebuying process.
- If you want to learn more about VA home loans, you can speak with the USAA Bank lending team to ask questions and know if it might be a fit for you.
1. Is my VA home loan lender experienced with VA loans?
Because VA home loans have specific criteria, eligibility guidelines, and components, having a lender experienced in originating VA-backed home loans is usually helpful. An experienced VA lender can help walk you through and support you throughout the entire process, from prequalification to closing your loan. You can go through a bank, mortgage company, or credit union to get your loan. Lenders offer different loan interest rates and fees, so shop around for the loan that best meets your needs.
2. Does my VA home loan lender have a solid reputation?
In addition to knowing your lender has experience with originating VA-backed loans, you can often check online reviews to see if your lender has solid customer feedback. It's helpful to have a VA home loan lender who will answer questions, help you know what paperwork and documentation is needed, provide transparent and clear information so you understand your VA loan terms, and provide support throughout the entire home buying and VA home loan process.
3. What are the terms that my VA loan lender is offering me?
Some terms are more standard with VA home loans, and some other components vary or depend on your specific eligibility, situation, or VA home loan lender. Some of the more standard VA loan components include:
- Funding fee: The VA determines the VA loan funding fee, so it may vary over time. The VA funding fee is a one-time payment that you pay on a VA-backed loan.
- No Private Mortgage Insurance (PMI): Because the VA is guaranteeing a portion of the loan, there is no PMI even if you are financing 100% of your home with a VA loan. This is a valuable earned benefit since PMI can be a costly obligation of a mortgage over time.
Some of the key components that may vary by VA home lender include:
- Interest rate on your VA loan: This will usually vary by lender and depend on current market interest rates, your credit history and credit scores, and the length of your VA loan.
- Minimum credit score requirement: This will vary by lender as the VA doesn’t call out a specific credit score needed to get a VA home loan.
- Maximum VA loan amount approved for: While there are some standard VA home loan requirements on maximum loan amounts based on your level of entitlement and location, this may also vary by lender and depend on a few factors such as the appraisal of the home you’re buying, your income, and your down payment amount.
- Closing costs: While closing costs are usually relatively similar across various VA home loan lenders, they may vary slightly. These are some of the administrative costs to originate your VA home loan. Closing costs often range from approximately 1% to 5% of your total VA loan amount to cover things like property appraisal, mortgage discount points, attorney fees, or flood insurance.
- Down payment required: As with interest rates and minimum credit score requirement, this will usually vary by VA loan lender and may depend on a few factors such as your credit history, income and assets, and loan amount.
- Loan length: Usually, VA home loans most commonly have either a 15-year or 30-year length or term, though they can also have 10- or 20-year terms. Your interest rate may vary depending on the length of your loan.
4. What resources and support does my VA home lender provide?
Whether you’re a first-time homebuyer or have used a VA home loan before to buy a home, you’ll want to have accessible resources to understand the process, current interest rates and fees, and anything specific to your home or location. There are additional areas, such as budgeting, insurance, and planning for home repairs, that you'll likely want to consider and learn more about before buying your home. A helpful real estate agent and lender with resources on these topics can streamline your homebuying process.
Tools and resources provided by USAA Federal Savings Bank should be considered general advice and for informational purposes only. All information is subject to change without notice and may not apply to all members. Products, services or features mentioned may not be offered by USAA Federal Savings Bank. The information contained is not intended to represent any endorsement, expressed or implied, by USAA Federal Savings Bank or any affiliates.
Learn more about VA loans
A VA loan is a great option that many servicemembers and veterans use to buy a home. If you’re interested in learning more about VA home loans or want to ask questions, submit your information today to speak with a loan officer.
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