The best VA mortgage lenders: Rates and reviews for 2020

The best VA loan lenders for 2020

The problem with creating a list of the best VA lenders is that there are just so many excellent ones.

Still, that’s a plus for you — because this list comprises the best of the best.

The top VA lenders offer exceptional service, reliably low rates, and perks for military home buyers, like ultra-low rates and no down payment.

Find out which lender is right for you.

Check your VA loan rates today (Sep 17th, 2020)

Company Minimum Credit Score Average Customer Satisfaction Score1 Average 30-Year VA Loan Rate, 20192
Navy Federal Credit Union 580 4.7/5 3.56%
Stearns Lending 580 5/5 3.92%
Movement Mortgage 580 5/5 3.98%
Quicken Loans 620 4.5/5 3.68%
Veterans United 660 4.9/5 4.0%
New American Funding 580 4.9/5 3.98%
Guild Mortgage Co. 580 4.5/5 3.97%
The Federal Savings Bank Unpublished 4.5/5 3.86%

Check your VA loan rates today (Sep 17th, 2020)

Editor’s note: The Mortgage Reports may be compensated by some of these lenders if you choose to work with them. However, that does not affect our reviews. See our full editorial disclosures here.


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Important note on today’s VA loan rates

This review cites the average 30-year VA rate each lender delivered to its customers in 2019, according to the public record.

Of course, mortgage rates have fallen significantly since then. Our figures do not represent rates you may be offered today.

However, these averages should give you an idea of how competitive each lender is.

Note, every VA lender on this list offered below-average rates among the 25 lenders considered for our review.

Compare today’s VA rates from top lenders (Sep 17th, 2020)

Best VA loan lender reviews

Remember, the “best” VA lender is different for everyone.

To find yours, pick 3-4 companies that stand out to you, then request rates to see which one can offer the best deal for your situation.

  1. Navy Federal Credit Union
  2. Stearns Lending, LLC
  3. Movement Mortgage, LLC
  4. Quicken Loans Inc.
  5. Veterans United Home Loans
  6. New American Funding
  7. Guild Mortgage Company
  8. The Federal Savings Bank

1. Navy Federal Credit Union

Navy Federal tops our list mainly because it offered the lowest VA rates in our survey during 2019.

Its average VA mortgage rate that year was 3.56%, which was a little lower than some on this list and substantially lower than a few.

  • Average 30-year VA loan rate in 2019: 3.56%
  • Minimum credit score: 580
  • Average customer service score: 4.7 / 5

True, Navy Federal isn’t the highest scorer for customer satisfaction. But it does well, even judged by that criterion.

Navy Federal came third in the J.D. Power 2019 U.S. Primary Mortgage Origination Satisfaction Study. Only USAA and Veterans United beat it.

The company did have more complaints filed against it with the CFPB than others on this list. But “more” in this case was still less than one complaint per 100 VA mortgage customers.

In our estimation, Navy Federal deserves to be on just about anyone’s VA loan shortlist.

2. Stearns Lending, LLC

Stearns took the no. 2 slot because it has the best customer service. Alongside Movement Mortgage, it scored a perfect 5.0 score from customers on online review websites.

And, very few of Stearns’ customers have complained about it to the Consumer Financial Protection Bureau (which collects mortgage complaints).

  • Average 30-year VA loan rate in 2019: 3.92%
  • Minimum credit score: 580
  • Average customer service score: 5 / 5

Stearns Lending also doesn’t do badly for VA loan rates: it was fourth-lowest out of 10 ranked companies.

Some lenders had lower rates. But of those lenders, many had a minimum FICO score of 620. Requiring higher credit scores likely kept their average rates lower. But Stearns will look at applications with scores as low as 580, a huge benefit to those with lower credit.

3. Movement Mortgage, LLC

Movement Mortgage may be speedier at getting your VA loan ready than any others on our list of the best VA lenders.

Movement aims to have applications approved in six hours, processed in seven days, and ready for a one-day closing at least two weeks before the date.

And its technology gives you the option of an all-online experience, which is especially handy in today’s stay-at-home environment.

  • Average 30-year VA loan rate in 2019: 3.98%
  • Minimum credit score: 580
  • Average customer service score: 5 / 5

Meanwhile, Movement Mortgage’s service is exceptional, with customers giving it an average of five stars on the review forums we checked.

Indeed, it had even fewer complaints to the CFPB than Stearns. But its average VA loan rates were slightly higher in 2019 than some others.

4. Quicken Loans Inc.

Quicken Loans is the first (but not the only) lender on our list to require a 620 credit score before it will look at your application.

That said, it can be more helpful than others if your existing debt burden is high. Quicken says it’s OK with debt-to-income ratios as high at 60% for some VA loans. For reference, DTI is typically capped around 45%.

  • Average 30-year VA loan rate in 2019: 3.68%
  • Minimum credit score: 620
  • Average customer service score: 4.5 / 5

Customers tend to love Quicken for its convenience. The company, like Movement, can process loans completely online in many cases.

Quicken has also earned the top score — at least, for non-VA-specific lenders — in J.D. Power’s satisfaction survey 10 years running.

When all lenders are considered, VA specialists like Navy Federal and Veterans United typically beat Quicken for customer service.

That said, if you want an all-online experience (with telephone support available), this lender may be for you.

5. Veterans United Home Loans

Veterans United is the biggest VA lender in the U.S. — despite having a higher credit threshold and (according to our survey) somewhat higher rates than others.

This can only mean the company is doing something right for borrowers. And indeed, it earns a near-perfect 4.9 out of 5 for customer service.

  • Average 30-year VA loan rate in 2019: 4.00%
  • Minimum credit score: 660
  • Average customer service score: 4.9 / 5

Likely, many borrowers don’t mind Veterans United’s higher credit threshold thanks to its Lighthouse program.

If your FICO score is too low to qualify for a VA loan, VU’s Lighthouse program provides free, one-on-one counseling to help you reach the threshold. (Note: This service is only open to veterans, service members and military families.)

And as far as rates go, remember that those vary by customer. Though Veterans United looks just a bit higher on average, it could very well still have the best deal for you.

6. New American Funding

New American Funding customers love it, even though it had a marginally higher VA loan rate than some others on our list.

Some of that may be down to its accessibility: that 580 minimum credit score will be attractive to many.

  • Average 30-year VA loan rate in 2019: 3.98%
  • Minimum credit score: 580
  • Average customer service score: 4.9 / 5

NAF also says that it has deployed advanced technologies to simplify and speed up the loan process. And it talks about its focus on Latinx customers, which may generate additional loyalty within that community.

7. Guild Mortgage Company

The volume of VA loans Guild originated in 2019 is among the highest for a non-VA specialist. And you might infer that means it’s doing a great job.

  • Average 30-year VA loan rate in 2019: 3.97%
  • Minimum credit score: 580
  • Average customer service score: 4.5 / 5

Guild’s website suggests a solid, middle-of-the-road company rather than a standout innovator. And its customers clearly like that.

True, Guild didn’t score especially highly on online reviews. But it came third in the J.D. Power 2019 U.S. Primary Mortgage Origination Satisfaction Study, which is a serious achievement.

8. The Federal Savings Bank

This veteran-owned lender originated plenty of VA loans in 2019 — even more than Guild did. And, like Guild, it offers a range of other types of mortgages, so it’s not a VA specialist.

  • Average 30-year VA loan rate in 2019: 3.86%
  • Minimum credit score: Unpublished
  • Average customer service score: 4.5 / 5

The Federal Savings Bank’s website says, ” … we start with a discussion to truly understand the dreams, hopes, aspirations and needs of our customers.”

It also suggests it will offer help to borrowers who need to improve their credit score before applying for a VA loan.

So you may receive a more personal service from the Federal Savings Bank than with some of the others featured above.

How to choose a VA lender 

Here are some tips for choosing your ideal VA lender:

  1. Pick lenders that work with borrowers like you — If you have a low credit score or a troubled financial history, look out for ones with low score thresholds
  2. Get multiple quotes — Don’t just choose one lender you like the look of. Request quotes from a number of lenders; the more the merrier. Shopping around in this way can easily save you thousands
  3. Compare your quotes carefully — Mortgage quotes now come as standardized Loan Estimates. So it’s easy to identify the one that suits you best. We have a how-to guide to help you find the most important information
  4. Prepare your paperwork— Get your documents together (here’s a checklist) and make sure you know your most important financial figures, including your current credit score and your debt-to-income ratio. Your quotes are only as good as the information you provide

Also, ask plenty of questions. Lenders often don’t list all their products online, so there could be hidden perks you’re not aware of from doing online research.

Ask each lender:

  • What are your rules about VA cash-out refinancing?
  • Do you offer 100% VA cash-out refinancing?
  • Do you offer the VA IRRRL (VA Streamline Refinance)?
  • Is IRRRL refinancing available without a new credit check or home appraisal?
  • Are any of the loan origination fees negotiable?

If all this sounds too time-consuming, remember the sums that are at stake.

You might save thousands of dollars by investing a few hours of time.

And when you increase your borrowing power by getting the best loan terms available, you can lower your monthly payments. This creates more financial stability, especially for first-time home buyers.

That’s what the
VA loan program is all about anyway.

Is a VA mortgage always better than a conventional mortgage?

Every borrower has different needs.

But military families should always consider the benefits of a VA loan before applying for a conventional mortgage — especially when you’re new to home buying.

Some of the
most obvious benefits of a VA mortgage include:

  • No down payment — Military members can qualify for a VA mortgage without any down payment, unlike conventional loans and most other subsidized loans
  • No PMI — Even the most generous FHA loans and USDA loans require borrowers to pay for mortgage insurance. This is an added cost that helps the lender, not the borrower. But VA loans never require mortgage insurance — just a one-time, upfront fee that can be rolled into the loan amount
  • Lower credit score requirements — Our best-of list includes several lenders that will issue mortgages with FICO scores starting at 580. If your credit history isn’t stellar you may still qualify for a mortgage through the VA loan program
  • Generous loan limits — As of 2020, there is no limit to the amount you can borrow with a VA loan. However, you need to qualify for the loan based on income, credit, and debt, so extra-large loans are still tougher to get

Verify your VA mortgage eligibility (Sep 17th, 2020)

VA loan eligibility requirements

The VA’s certificate of eligibility kicks off the VA loan underwriting process. Military service members and veterans will need a COE on file to apply for a loan.

Many lenders
will help you get a COE. Service requirements for getting a COE 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 peace time for 181 consecutive days
  • Serving in the National Guard or Air Force or Navy Reserves for six years

Surviving
spouses of service members killed in the line of duty can also qualify for a VA
home loan.

The COE tells
lenders you qualify for a VA loan, but you’ll still have to meet the lender’s
borrowing requirements.

For example, if you applied with Quicken Loans and your credit score is below 580, Quicken has the right to reject your application even when you have a COE.

When you have a
COE and you meet the lender’s qualifications, getting a loan pre-approval
should be easy. 

Start your mortgage pre-approval (Sep 17th, 2020)

Disadvantages of the VA home loan program

The VA loan program exists to help veterans, active-duty military members, and their families buy safe and affordable housing.

But the loan
program isn’t the best option for all situations.

  • Not for investment properties — Your VA home loan must be used to buy a primary residence. It can’t be used for real estate investments such as rental homes or business properties
  • Not for vacation homes — You can’t use VA borrowing for a second home or vacation home, either
  • VA funding fee — There’s no PMI required on a VA loan, but there is a one-time “funding fee.” If you pay it upfront, the funding fee will add to your closing costs. Most borrowers choose to roll it into the loan amount, though this means you’ll pay interest on the extra sum
  • Lower home equity — Making no down payment has a down side; you’ll start your homeownership journey with no equity. This complicates the selling process if you needed to sell the home quickly.
  • Lender reluctance — Not all VA-authorized lenders fully understand this mortgage program, and your loan officer may try to direct you into another loan type instead. Stick with the lenders on the best-of list above and you won’t have this problem; other VA specialists include USAA and PenFed

Despite these drawbacks, the VA loan is often the best choice for eligible borrowers

With no down payment required and ultra-low mortgage rates, the VA loan is hard to beat — especially for first-time or credit-challenged home buyers.

VA mortgage lender FAQ

Do VA loan rates vary by lender?

You bet! As you can see above, rates can vary considerably even among the best VA lenders. That’s why it’s so important to compare estimates from at least 3-4 companies before choosing one.

Do most VA loans get approved?

Probably; it’s easier to get approved for a VA loan than pretty much any other type of mortgage. However, lenders can impose their own standards. So if you’re on the borderline of qualifying, you may have to shop around for a VA lender that can help you.

Can I get a VA loan with a 500 credit score?

In theory, yes. The VA says, “Unlike many loan programs, a lower credit score, bankruptcy or foreclosure does not disqualify you from a VA home loan.” But you may have to really hunt to find a lender offering VA loans with a 500-579 score. Most mainstream lenders only go as low as 580.

What is a good VA loan rate? 

VA loan rates are typically the lowest on the market; below FHA, USDA, or conventional loans in almost every case. So if you qualify for a VA loan, you have a head start on getting a low mortgage rate.

That said, rates vary a lot even between the best VA lenders. In our sample, the averages ranged from 3.56% to 4.00% in 2019.

And those are just averages. Many borrowers with great credit and sound finances will pay considerably less. And others, with more troubled financial histories, will receive higher rates.

So it really has as much to do with you as the lender. And the only way to find your own, personal, good VA loan rate is to shop around multiple lenders and compare your quotes.

How do I get my VA funding fee waived?

Read this page on the VA’s website. It details all those who don’t have to pay the funding fee. You may also be able to persuade your seller to pay it for you. But that’s a matter of individual negotiation and only works occasionally.

The VA funding fee increases if you’ve used your VA home buying benefit before.

Where can I find a VA construction loan lender?

Lenders willing to fund VA construction loans used to be rare. And some still refuse to offer those. But it’s easier to find one now than ever. If you can’t, consider financing the construction using a different sort of loan, and then refinancing to a VA mortgage for a lower rate.

Where can I find a VA loan for a manufactured home?

Again, not all lenders will help with these. But they’re out there. You may want to call up a few lenders — or a broker — and ask about manufactured home loans. Odds are, this information will be harder to find online than info about standard VA loans.

Where can I find a Jumbo VA loan?

Jumbo VA loans are a bit of a gray area. The VA eliminated loan limits in 2020, so new homebuyers can technically get a loan of any size (provided they qualify) and it won’t be considered a jumbo loan.

Eligible VA homebuyers can even get a mortgage above conventional loan limits (i.e. a “jumbo loan”) with 0% down. But lenders can set their own loan caps, so these may be hard to find in practice. You’ll have to do some extra shopping around.

In addition, buyers using their “remaining entitlement” — meaning they’re still paying off a previous VA loan — may be subject to local loan limits. In this case, a VA mortgage above conventional loan limits may be considered a jumbo loan and may require a down payment.

Does a Certificate of Eligibility ensure you’ll get a VA loan?

Not necessarily. You must get a COE to apply for a VA loan, but private lenders partner with the United States government to offer them. And the lenders can enforce their own qualifications.

How else can I avoid paying a down payment?

The VA loan program is one of only two mainstream mortgages that allow no down payment. The other is the USDA home loan, which is reserved for low- to moderate-income buyers in rural areas.

Other popular home loans require a down payment, though these can be quite low. Conventional mortgages start at just 3% down and FHA loans start at 3.5% down.

When is making no down payment a disadvantage?

It depends. Making a down payment means you have home equity from the day you close on the house. Without a down payment, you’ll need to make monthly payments for several years before building equity.

As your home equity grows, your home can become a financial asset. As long as you don’t plan to sell the home within the first few years of homeownership, avoiding the down payment should be fine.

Who pays closing costs on a VA home loan?

The home buyer is expected to pay most closing costs on a VA home loan. One notable exception is the VA funding fee, which can be rolled into the loan amount rather than paid upfront. 

The buyer is also allowed to negotiate “seller concessions,” allowing the seller to pay up to 4% of the loan amount in closing costs. The amount a seller covers can even exceed 4% if they pay more in certain areas, like discount points.

VA closing costs usually equal about 3-5% of the loan amount, including an origination fee equal to 1% of the loan amount, and additional fees worth around 2-4%.

See the VA’s list of closing costs and who pays them for more information.

Recap: The 8 best VA loan lenders

So let’s review our eight picks again. Remember, the ones at the top are the ones we think will appeal to most readers. But that’s not necessarily you. And you should pick the ones that offer what you want.

As importantly, don’t forget to get quotes from multiple lenders. Getting just one or two really does put thousands of dollars of your money at risk.

  • Navy Federal Credit Union — Lowest VA loan rates in our survey
  • Stearns Lending — Excellent customer service
  • Movement Mortgage — Excellent customer service
  • Quicken Loans — Simple online application process
  • Veterans United — Free help for credit-challenged borrowers
  • New American Funding — Allows lower credit scores
  • Guild Mortgage Company — Excellent customer service
  • The Federal Savings Bank — Veteran-owned, personalized service

Happy hunting for your own very best VA loan!

Verify your new rate (Sep 17th, 2020)

1Average customer satisfaction scores include J.D. Power survey ratings and customer reviews from Zillow and Lending Tree, where available for each lender.

2Average mortgage rates are sourced from public data that lenders are required to file under the Home Mortgage Disclosure Act (HMDA). Rates reflect the average for 30-year, fixed-rate VA financing in 2019. Your own mortgage rate will vary.

Published at Thu, 17 Sep 2020 11:45:20 +0000

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