Top 5 VA Home Loan Providers
Veterans have access to many financial aid options not available to ordinary civilians. The majority of these resources are provided through Veterans Affairs (VA).
The VA offers assistance with areas like getting health insurance, finding work and paying for school, but one of the largest programs is the VA home loan. VA home loans work differently than other programs from the VA. The biggest difference is the loan does not come directly from the VA. Instead, the VA helps you secure a loan from a private lender. The VA guarantees a portion of the loan, meaning they offer to pay lenders a percentage of your loan if you go into foreclosure. This eliminates much of the risk for a private lender, allowing you to get more favorable rates on your loan.
Eligibility for a VA home loan is determined by several factors. The initial qualification is determined by how long you served. If you are currently enlisted and served for at least 90 days, you are eligible. If you previously joined the military, the requirements change depending on when you enrolled, but in most cases, as long as you served for 180 days, you are eligible. Private lenders may place additional requirements on loans, such as requiring a home appraisal or applicants needing a certain credit score. Listed below are several of the best VA home loan providers in 2020.
VAloans.com is not a traditional loan provider. Instead, the website is run by a mortgage research center, with the intention of helping veterans find the best loans. The website provides several useful tools, such as a loan calculator to determine monthly payments and your maximum loan amount. It also provides all the eligibility requirements necessary to get a VA loan. If you are unsure where to begin with getting your loan, consider browsing VAloans.com first.
Veterans United Home Loans
As of writing, Veterans United is the largest VA loan provider in the United States. At a glance, it may appear Veterans United is one of the stricter providers. In order to qualify for a Veterans United Loan, you need a minimum credit score of 660. For many veterans, especially younger service members who did not have time to build up a credit before serving, this is a high score.
If your credit score is below 660 when you apply, you can enroll in Veterans United Lighthouse program. The Lighthouse program offers free, one-on-one counseling with a financial expert to help you build your credit to reach the minimum threshold. This service is available to both veterans and their family members.
The average interest rates for a Veterans United loan are between 2.25 and 2.75 percent. Veterans have the option of purchasing discount points, which lower their interest rates. With discount rates, you are paying an initial percentage of the interest up front, reducing the overall amount you pay in the long term.
Quicken Loans provides mortgages for both civilians and veterans. All applicants must have a minimum credit score of 620 to qualify for a traditional loan. With larger loans, Quicken normally increases the score requirement to 700. However, this is normally waived for veterans, since the VA backs the loan.
Many customers value Quicken Loans for their convenience. Quicken operates almost entirely online, though there are a few physical branches you can visit if you require face to face help. Quicken also offers generous debt-to-income ratios. Most other providers cap their ratio at 45 percent, but Quicken goes as high as 60 percent for veterans. The average interest rate for a VA quicken loan is around 3.68 percent.
Quicken also lives up to their name and provides a faster application process than most other providers. If you are comfortable negotiating rates online and want the fastest option, Quicken is the best lender.
AmeriSave Mortgage has some of the lowest eligibility requirements. In order to qualify for a loan, you must have a minimum credit score of 580. Normally, you would be charged a funding fee to receive an AmeriSave loan, but this is waived for veterans. AmeriSave veteran loans typically have lower interest rates than other lenders, rarely going above 2.40 percent. AmeriSave has offices throughout the United States, except for New York and Washington D.C. Once you apply, an agent will show all the programs you are eligible for, along with the available rates and plans associated with each program. AmeriSave is considered one of the most trustworthy and straightforward lenders, making it a good choice for first time homebuyers.
For many veterans, one of the most important qualities of a lender is finding someone who is willing to work with them and explain the process. With larger lenders, it is hard to find high quality, personalized customer service. Paramount Bank is one of the smaller VA home loan lenders. In addition to top of the line customer service, Paramount customizes their loan plans for each customer. While Paramount has a website, most of the information is provided through meeting with a loan officer.
Because Paramount offers custom plans, there is less information about what to expect. Based on 2019 data, the average interest rate for a 30-year loan was around 4 percent. Paramount does not set a minimum credit requirement, but does advise applicants get their score to 680 for the best results.