When you’re ready to purchase a home with your veteran benefits, you may be wondering how to choose a mortgage lender for your VA home loan. With so many options out there, it’s challenging to know which lender has the best experience when it comes to VA home loans.
Any mortgage lender that has an interest in participating in the Veteran Administration’s (VA) mortgage lending program must apply through the VA. The standard for a lender to obtain approval from the VA is quite lofty. If a lender is qualified and achieves approval, they are known as a Non-Supervised Automatic Authority Lender. This can be granted on a state-by-state basis, or on a national basis. This is the first safeguard for veterans who want to utilize their VA home loan benefit.
Like any other industry, there are good and bad apples in the VA mortgage industry. Listed below are some questions and pointers on how to choose a mortgage lender for your VA home loan.
What’s the Mortgage Lender’s Experience with VA Home Loans?
Make sure your mortgage lender has plenty of experience with providing VA home loan financing. These types of home loans are much different than any other type of mortgage, and an inexperienced lender may struggle with understanding the VA guidelines. The best VA mortgage lenders have the experience and licensed mortgage loan originators that are VA-qualified to make sure you are taken care of.
Does the VA Lender Use Onsite Underwriters?
When considering how to choose the best mortgage lender for your VA home loan, make sure that the lender employs VA mortgage underwriters that are onsite. VA underwriters are certified directly by the Veteran’s Administration and they can achieve two different levels of certification.
The first certification allows them to underwrite VA mortgage applications in accordance with VA guidelines—that certification is called an Automatic Credit Underwriter. The second certification allows the underwriter to approve VA appraisals—that is called Staff Appraisal Reviewer (SAR). Lenders that employ underwriters with these certifications are most likely to be able to streamline the approval process and provide a higher quality mortgage experience.
Can the Mortgage Lender Secure the Proper Documents for Your VA Home Loan?
The VA home loan process has several unique requirements that a quality mortgage lender should take care of for the veteran. For instance, a certificate of eligibility (COE) is required and a VA lender should be able to obtain this for the veteran. There are some quirky requirements as well, including a Residual Income Calculation that may require the use of utility bills, which the mortgage lender should be able to secure on behalf of the veteran. In other words, an experienced VA lender should be able to cut through the proverbial “red tape” that often is associated with government-sponsored programs.
Does the VA Lender Offer Discounts?
In addition to the many benefits of VA home loans, some VA lenders offer veterans discounts on their closing costs. Be sure to ask your mortgage lender if they are willing to pay for all or some of your closing costs. If they are not willing to agree to that, you may want to check with a different lender. Homesite Mortgage has always looked for opportunities to save our veterans money and reduce their closing costs whenever possible.
How Does the VA Lender Help You with the Funding Fee?
Instead of having monthly mortgage insurance, the VA charges the veteran a one-time funding fee, which is added to the total loan amount. The amount of the funding fee is determined by the VA and by the discharge status (if the veteran is receiving disability benefits and/or has received an Honorable Discharge). When thinking about how to choose a mortgage lender for your VA home loan, consider that an experienced VA lender should be able to qualify you for the lowest funding fee possible. Additionally, there are the few unique mortgage lenders who can show you how you can get your funding fee either reduced, or completely eliminated. For example, did you know that you could get your funding fee significantly reduced by offering a down payment, even though VA home loans allow for 100% financing? Homesite Mortgage is one of the unique lenders that can reduce or eliminate your funding fee.
By now, you should feel confident knowing how to choose a mortgage lender for your VA home loan and put yourself in the best position for your VA home loan. Be sure to research VA mortgage lenders and ask them the questions listed above. The time spent sorting out the bad, average, and stellar VA home loan lenders will be worth it in the end when you choose a mortgage lender for your VA home loan who has the experience to seamlessly guide you through the process.