Veterans United stands out as the best choice for VA loan rates and lenders
The Department of Veterans Affairs supports veterans and current service members. One way it does that is by offering affordable mortgages to our veterans. Here’s the inside scoop on finding the best VA loan rates.
Quick Look: Best VA Loan Mortgage Lenders
- Best Overall for VA Loans: Veterans United
- Best for Online: Rocket Mortgage® (formerly Quicken Loans)
- Best for First Time Home Buyers: USAA
- Best for Experience: Navy Federal Credit Union
- Best for Low Credit Scores: Caliber Home Loans
5 Best Mortgage Lenders for VA Loans
To find the best rates, you should contact multiple lenders. Here are our 5 best mortgages companies picks for VA loans:
1. Best Overall: Veterans United
Veterans United earned our top spot because of its excellent reviews from customers. It works closely with leaders from all branches of the military to ensure its borrowers are educated about home ownership and VA loans.
Veterans United has an easy-to-navigate website. Although you can’t complete an application online, you can get an initial quote. You can also view its rates for easy comparison shopping.
Why we love it: Veterans United specializes in serving veterans, active duty service members, and their families, ensuring they receive personalized and dedicated support throughout the loan process. With their extensive experience in VA loans, Veterans United offers competitive rates and flexible loan options tailored to meet the unique needs of military borrowers.
2. Best for Online: Rocket Mortgage® (formerly Quicken Loans)
- Best For:Online MortgagesVIEW PROS & CONS:securely through Rocket Mortgage (formerly Quicken Loans)'s website
You can complete the mortgage process entirely online with Rocket Mortgage® (formerly known as Quicken Loans). If you need help, you can chat with mortgage specialists via the website or talk to them by phone. You can upload documents using its website or mobile app and also take a sneak peek at current mortgage rates on its site.
Take advantage of its helpful educational materials as well. Rocket Mortgage® boasts rave reviews from its customers. It offers fixed-rate VA mortgages with 15-, 25- and 30-year terms.
Why we love it: We love Rocket Mortgage for VA loans because they offer competitive rates that are among the best in the market. Their user-friendly online platform makes the loan application process quick and convenient, providing a hassle-free experience for borrowers.
3. Best for First Time Home Buyers: USAA
If you’re a first time home buyer, it’s best to work with a lender with a variety of mortgage options. USAA is one of the best companies for first time buyers because it offers several mortgages. It has several VA mortgages, conventional mortgages and a special loan option it has designed for first time home buyers.
USAA has a reputation for excellent service. Its loan officers will help you choose the best loan for your needs, whether it’s a VA loan or something else.
Why we love it: With their expertise in understanding the unique needs of veterans, USAA provides flexible loan options and guidance throughout the entire home buying process. Their commitment to serving those who have served our country makes them a top choice for VA loans.
4. Best for Experience: Navy Federal Credit Union
Navy Federal Credit Union is one of the top 5 VA lenders in the country. That level of experience is essential. VA loans have specific requirements, and the documentation involved may be daunting for less experienced VA loan lenders.
Navy Federal offers fixed-rate VA loans, conventional loans, FHA loans, and proprietary products. It works exclusively with military members and their families, so its loan officers understand your unique needs.
Why we love it: With a history of serving the military community since 1933, Navy Federal Credit Union has extensive experience in providing specialized financial products, including VA loans. They consistently receive high ratings for customer satisfaction and are known for their personalized service.
5. Best for Low Credit Scores: Caliber Home Loans
Not everyone has perfect credit. Caliber Home Loans works with borrowers with credit scores as low as 580. With a score of 580–619, you may qualify for a fixed-rate mortgage. With a credit score of 620 or higher, you may qualify for ARMs as well.
Caliber Home Loans also offers several other loan products if a VA loan isn’t the right fit for you. Caliber is one of the top nonbank lenders in the country.
Why we love it: We love Caliber Homes because of its competitive interest rates, flexible loan options, and low down payment for military members and veterans. Its excellent customer service and track record of helping veterans secure financing for their dream homes make them a trusted lender in the industry.
What Is a VA Loan?
A VA loan is a home loan backed by the Department of Veterans Affairs. You can use a VA loan to purchase a home or refinance a mortgage you already have. Here are the primary features of a VA loan:
- No down payment requirement: You must make a down payment of 3.5%–20% for most types of mortgages. You can save significantly by not having to make a down payment.
- No mortgage insurance: You are typically required to purchase mortgage insurance if you make a down payment of less than 20%. Mortgage insurance protects the lender if a borrower defaults. It can add significantly to your monthly mortgage payment.
- VA assistance if you become delinquent: If you run into financial difficulties down the road, the VA will assist you in getting your mortgage back on track.
Private lenders offer VA loans. The VA approves lenders who provide VA mortgages.
Types of VA Loans
The VA guarantees many types of mortgages. The most common types are:
Fixed-Rate Mortgages
These mortgages have the same monthly payment for the life of the mortgage. This is because the interest rate is the same for the mortgage term. Fixed-rate mortgages have a variety of terms. Your term is how long the mortgage lasts. Fixed-rate mortgages often have 15-, 20- or 30-year terms.
Adjustable-Rate Mortgages
These mortgages have a monthly payment that could change. This is because the lender may increase or decrease the interest rate. Lenders change the interest rate based on market conditions. Adjustable-rate mortgages (ARMs) often have an introductory period with a fixed rate. A 5/1 ARM has a 5-year introductory period. After that, the lender can change the rate once per year.
Lenders may offer VA loans as fixed-rate mortgages, ARMs or both.
Who Is Eligible for a VA Loan?
Many current service members and veterans are eligible for a VA loan. Here are the details on eligibility:
Veterans
Veterans must meet service length requirements. Veterans who served during wartime typically must have at least 90 days of active duty service, unless discharged due to a service-related disability. You also must not have a dishonorable discharge. Veterans who served during peacetime must have at least 181 continuous days of active duty service unless discharged due to a service-related disability.
Current Service Members
Current service members are eligible after 90 days of continuous active duty service.
Reserve or National Guard
You must have at least six years of eligible service unless you were discharged due to a service-related disability.
Surviving Spouse
You must be an un-remarried spouse of a veteran who died while in service or due to a service-connected disability. Spouses of a service member who is missing in action or a prisoner of war may also qualify.
If you are uncertain of whether you meet the eligibility requirements, contact the VA. The VA can confirm your eligibility and provide you with a Certificate of Eligibility if you meet the requirements for a home loan program.
VA Loan Requirements
The VA has a few requirements for the mortgages it guarantees. Lenders must consider:
Your Debt Ratio
Your debt ratio is the total of your monthly debt payments compared to your monthly income. Let’s say your debt payments (car payment, potential mortgage payment, credit card minimums) add up to $1,500 per month. If your monthly gross income is $3,000, then you have a debt ratio of 50%. The VA doesn’t have a maximum debt ratio. If your debt ratio is more than 41%, the VA lender must look for compensating factors, like extra savings or an excellent credit history.
Loan Amount
Technically, there is no maximum loan amount for a VA loan. The VA only guarantees up to $453,100 in most areas without a down payment. You can visit the VA website to find out the loan limit in your area.
Credit Score
Your credit score is a computer-generated number that gives lenders an idea of your credit history. The VA doesn’t have a minimum credit score requirement. Lenders may have a minimum credit score requirement, though.
Your Income
The VA has residual income guidelines that lenders must follow to ensure borrowers can afford their home loans. The VA wants lenders to confirm that you have enough income to handle unexpected expenses. The guidelines vary depending on where you live and the amount of your mortgage.
Lenders also look at the property you’re planning to purchase. The property must be safe, structurally sound and sanitary. Many properties fit these requirements, but a serious fixer-upper might not make the cut. You must also use the VA home loan for a primary residence. You can’t use it to buy a vacation home.
VA Loan Rates
What should you expect when it comes to VA loan rates? Here is how a VA loan stacks up against other types of mortgages:
| Loan Type | Rate | APR |
|---|---|---|
| 30-year fixed | 6.53% | 6.605% |
| 15-year fixed | 6.56% | 6.69% |
| 7/1 ARM (adjustable rate) | N/A | N/A |
| 5/1 ARM (adjustable rate) | N/A | N/A |
Applying for a VA Loan
The first step to getting a VA loan is getting your Certificate of Eligibility (COE). Many service members can get their COEs through the eBenefits portal. If you can’t get your COE through the portal, contact the VA for assistance.
After you have your COE, gather the rest of your financial documents. You will need recent tax returns, bank statements and pay stubs. Contact a few lenders and get a quote. Choose a lender for preapproval. After you’re preapproved, look for a home. When you’ve found a home, choose a lender that provides a good rate and excellent service. Finish your application, and once your lender has formally approved your application, you’ll be ready to close and get your keys.
Frequently Asked Questions
How do I get pre-approved?
To apply for a loan, submit an application along with two years of tax returns, W-2s, a recent pay stub, and two months of bank statements. The lender will also run your credit report. It typically takes 2-7 days to receive approval or denial after submission.
How much interest will I pay?
Interest on a loan is determined by the interest rate, the amount borrowed, and the loan term. For a $208,800 loan at 3.62% over 30 years, the total interest paid would be $133,793.14, with a monthly payment of $951.65.
How much should I save for a down payment?
It’s recommended to save at least 20% of a home’s cost for a down payment, as it leads to lower monthly payments and savings on interest. If saving 20% isn’t possible, there are home buyer programs and assistance available, particularly for first-time buyers.
