Best VA Loan Lenders

Best VA Loan Lenders

Eligibility for VA home loans – do VA home loans require a down payment?

A VA loan does not require a down payment or private mortgage insurance (PMI). However, lenders may refuse to offer you a zero-down loan based on your credit score and credit history. Discover what VA loans are available and what service requirements the Veterans Affairs (VA) has.

The best VA loan lenders of 2022 are also discussed. We’ve selected mortgage lenders that can meet most borrowers’ needs, whether they want low rates, a fully online mortgage experience, or options that work with lower credit scores.

PenFed Credit Union offers competitive rates.


Among the lenders we reviewed, this lender has the second-lowest fees

Lender credits of up to $2,500 are available

Payments made on time for 60 consecutive days receive a $500 reward


Loan applications do not take into account non-traditional credit and income information.

Access to mortgages and banking products requires membership

Choosing PenFed: With rates as low as 620, PenFed is our top VA loan lender for competitive rates, offering the second-lowest rates (less than 1% higher than our top pick).

Concerning VA loans and mortgages, PenFed Credit Union stands out due to its low rates. PenFed offers several financial incentives to borrowers in addition to a large loan inventory (conventional, FHA, VA, Jumbo, and adjustable-rate mortgages).

The first reward is $500 for making 60 consecutive on-time payments. Despite not sounding like much, it’s a nice bonus for making your mortgage payments on time. In addition, you may be eligible to receive a $2,500 lender credit toward your loan closing costs, which can reduce your out-of-pocket costs.

A PenFed loan application does not consider “alternative” or non-traditional credit information or income information for loan applications. Members of PenFed must be veterans, active military members, or close relatives of members of the armed forces to contract their services.


There is a minimum credit score requirement


The amount of the down payment

A 0% interest rate is available to qualified borrowers.

North American Savings Bank is runner-up for Best Competitive Rates.

In addition to serving customers in the Kansas City area, North American Savings Bank offers mortgage services all over the country. There is a significant difference between NASB’s VA loan rates and PenFed’s VA loan rates.

With NASB’s mortgage rate calculator, customers can calculate scenarios with credit ratings as low as 600 – lower than other VA lenders allow. Additionally, NASB doesn’t charge origination fees on its VA loans, which can save borrowers a lot of money.

North American Savings Bank offers a wide range of mortgage options, including purchase, IRRRL, and cash-out refinance, for individuals who cannot provide “traditional” credit and income data, such as self-employed individuals.

What is the process of getting a VA loan?

Unlike conventional mortgages, VA mortgages have the backing of the Department of Veterans Affairs. If the borrower defaults, part or all of the loan will be repaid by the government.

Qualifying military service members can also take advantage of several VA loan benefits.

VA loans: pros and cons

Consider both the advantages and disadvantages of a VA loan when shopping. It is only sometimes the best choice to purchase, improve, build, or refinance rental properties with VA loans, despite their lower interest rates.


Mortgage rates are lower than traditional mortgage rates

For qualified borrowers, there is no down payment

Compared to traditional mortgages, it allows a higher debt-to-income ratio


There is a VA funding fee

The property must be inspected and appraised

Investing in or renting out vacation properties is not allowed

VA loan rates

VA loans usually have a lower interest rate than conventional and even FHA loans.

The federal government does not set interest rates, which private lenders determine. Additionally, VA loan types (fixed, streamlined, cash-out, and jumbo) and terms (15-year and 30-year) will vary slightly.

Some of our featured lenders offer VA loan mortgage rates ranging from 4.375% to 5.525% APR as of July 2022. For more information, you can contact one of their representatives or request an online quote from many lenders.

VA loan closing costs

In addition to the mortgage amount, the VA Funding Fee is an upfront mortgage insurance payment. Fees can range from 1.4% to 3.6% of the loan, depending on the down payment, loan type, and whether it’s your first VA loan.

It can be financed over the loan term or paid in full at closing and is added to the mortgage amount. Veterans with disabilities or active-duty service members who can prove they have received the Purple Heart may be exempt from the fee.

VA loans also have the following closing costs:

  • Real estate commissions
  • Brokerage fees
  • Loan origination fees
  • Discount points
  • Appraisals
  • Title fees

Under VA lending rules, sellers may contribute 4% of the total loan amount to the veteran’s closing costs. The veteran can also receive a gift from a family member to cover closing costs.

We’ve created a mortgage calculator to estimate what a new mortgage would cost. Calculate how much you’d pay if you refinance using our mortgage refinance calculator.

The types of VA loans

VA offers four types of loans – VA purchase loan, interest rate reduction refinance loan (IRRRL), home equity loan, and Native American direct loan – each with different requirements and limitations. Consider all your loan options before selecting a VA mortgage lender.

Loans for purchases

A loan can be used to purchase a primary residence, make energy-efficient improvements to an existing home, or buy land for construction. There are two types of purchase loans: fixed-rate and adjustable-rate. Fixed-rate loans have fixed monthly payments, whereas adjustable-rate loans have variable interest rates and mortgage payments.

You cannot use a purchase loan to purchase an investment property, a vacation home, a rental property, or a fixer-upper that needs significant repairs. VA mortgage lenders may have a maximum loan limit, but the VA does not. For 2021, the maximum loan amount for U.S. counties is $548,250, but it can reach $822,375 in more expensive areas.

Refinance loan with interest rate reduction (IRRRL)

An existing VA mortgage can be streamlined for lower interest rates, shorter loan terms, or a switch from a variable to a fixed rate.

Getting cash out of a refinance

With a VA refinance, your home equity can be used by replacing your existing VA loan.

A typical loan allows you to borrow up to 90% of the value of your home. The cash-out option also refines a non-VA-backed loan into a VA-backed loan.

Direct loans for Native Americans (NADL)

The NADL is the only VA loan directly managed and funded by the government. The loan is available to Native American veterans (or their spouses who are Native American). Federal trust land can be used for buying, building, or improving a home.

What is the VA loan qualification process?

In addition to its military benefits, the VA home loan program is available to:

Members of the active military

A veteran

Those who have served in the National Guard in the past and currently

Military spouses who have lost a spouse in combat

No minimum credit score is required for VA home loans, but most participating VA loan lenders require at least 620.

Service requirements

A veteran or active-duty service member serving during wartime or peacetime must have served at least 90 days. In order to qualify, Guardsmen and Reserves must have served 90 days of wartime service or six years of creditable service.

A Certificate of Eligibility (COE) must be obtained once you have been deemed eligible. By getting a COE, you prove your eligibility for a VA mortgage to the lender.

Due to the government’s backing, VA loans do not require a down payment. It can, however, reduce your costs in the long run if you put money down.

The best VA loan lenders are banks that cater specifically to military members, their families, and even federal employees. The following is a list of military banks and credit unions that will help you find a one-stop shop for mortgages and banking.

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