For eligible military members, veterans and their spouses, a VA loan is a low-cost financing option that can make it easier to buy a home or refinance a mortgage. This type of loan has some universal requirements, but mortgage lenders set their own rates, so it pays to comparison-shop to get the best deal.

Many lenders offer VA loans, and some even specialize in them. Here’s how to get started finding the best VA lender for you.

Benefits of getting a VA loan

VA loans are more popular than ever, thanks to their offer of 100-percent financing, lower interest rates and less-stringent eligibility requirements than conventional loans.

Some of the benefits of a VA loan include:

• There is no down payment required.
• There are no limits on how much you can finance.
• No mortgage insurance is imposed.

What to look for in a VA mortgage lender

Many banks, credit unions and online lenders offer VA loans, so to narrow down your choices, consider which come highly recommended from military colleagues and family. You can also peruse online testimonials. To help focus further, you might concentrate on lenders that specialize in VA loans and which ones offer the most competitive rates.

5 steps to find the best VA mortgage lender

Step 1: Confirm you qualify for a VA loan

To obtain a VA loan, you must have a Certificate of Eligibility (COE) based on your or your spouse’s military service, and you must be buying a primary residence, not an investment property or second home.

While the U.S. Department of Veterans Affairs (VA) doesn’t impose minimum credit score requirements, VA mortgage lenders can and do, so you’ll need to meet these standards to qualify. These typically include a credit score of at least 620 and a debt-to-income (DTI) ratio of 41 percent or less.

Step 2: Crowdsource VA lender recommendations

Social media can be a handy way to get a short list of lenders quickly. But also get recommendations from family and fellow service people, especially those who have gotten a VA loan in the recent past.

Ask your referrers what their experience was like. Was it a smooth process? Was the lender able to answer their questions? If they don’t mind disclosing the lender fees, the cost of the loan is also useful information to have. If more than a few people recommend the same lender, odds are it’s a worthy lead.

You can also research online for high-rated VA mortgage lenders and peruse third-party reviews and testimonials.

Once you’ve asked around, done your homework and have your list, you can see how each measures up to the next two yardsticks: experience and cost. From there, you can whittle down your list until you find the lender that meets your needs and preferences.

Step 3: Seek out VA lenders with experience

VA lenders need to understand specific requirements as well as be able to guide borrowers in choosing the best mortgage for their financial situation. Experience can be an invaluable asset on both fronts. The more borrowers a lender works with and the more scenarios the lender encounters, the better equipped it is to have answers for a variety of problems.

Find out how long the VA lender has been licensed and how many mortgages they issue per year. If you have special circumstances or want a certain interest rate, ask the lender how they can help. Usually, a lender with experience can offer a few solutions.

Don’t be distracted by a big brand — behind those household names are just individual people. Although a certain bank has been in business for 50 years, the person helping you with your loan might have a little or a lot of experience. Some borrowers, especially those who have had multiple mortgages, might not rely on a lender’s experience to help them through the process, so lack of experience isn’t necessarily unsuitable for everyone.

Step 4: Comparison-shop to find the best VA loan rate

Mortgage rates and costs vary by VA lender, so it’s important to do your research before you lock in a rate. In fact, a 2023 Freddie Mac report revealed that borrowers who comparison-shopped for mortgages saved money versus those who didn’t — at least $600-$1,200 annually.

Be sure to get the APR, or annual percentage rate, not just the interest rate. The APR is the total cost of the loan, including all the lender fees, and is typically a better basis for comparison than just the mortgage rate.

Step 5: Close on your VA loan

Once you’ve been preapproved for VA financing and have had an offer on a home accepted, stay in communication with your lender as you move toward closing. At least three business days prior to the closing date, your lender is required to provide you a closing disclosure with a finalized list of closing costs, which might include:

• Origination fee
• VA funding fee
• Any discount points
• Credit check fee
• Title search and title insurance costs
• Recording fee