If you’re an active military service member, veteran, or surviving spouse looking for a new home loan, you have a specific advantage. You can opt for a loan backed by the U.S. Department of Veterans Affairs (VA).
Finding an experienced VA mortgage lender is imperative to ensure the process proceeds smoothly. But how do you find one, and what criteria should you judge them by?
What Distinguishes a Financial Institution for VA Loans?
Veterans Affairs loans are provided by private lenders, such as mortgage lenders, credit unions and private banks, according to the VA. But not all mortgage lenders are created equal. There are certain criteria you’ll want to use to evaluate any prospective lenders.
Look for an Experienced Lender
Just because a lender offers VA loans doesn’t mean they are experienced with them. Investigate how long the lender has been issuing VA loans and how many VA loans they originate annually. It’s also important to know what percentage of the lender’s business is dedicated to VA loans.
Veteran’s Affairs loans have many regulations to follow, so it’s important to have a loan officer who knows the nuances and can help you navigate the red tape.
Good Communication Is Imperative
There is a large amount of documentation required by the VA for a mortgage. Prompt communication from the mortgage lender is imperative.
The lender should be able to keep you updated on your loan throughout the process. They should be able to contact you promptly if there are issues.
Good lenders must be able to contact you in your preferred method of communication. Whether it’s texting, emailing, or calling, they should know the best way to contact you.
The more open the communication, the smoother and quicker the process can proceed.
Lender Must Have a Sound Reputation
Gain as much information about a lender as possible before deciding to go with them. Take a look at other customers’ experiences to understand what yours might be like. Each borrower has different circumstances, but many reviews or fellow veterans can enlighten you about the lender.
Does the Lender Confirm Qualifications?
According to the VA, to apply for a VA mortgage, you must have a certificate of eligibility (COE). It’s important to ask the lender if they will request a COE from the military or if you will need to. A COE is mandatory to qualify for a VA mortgage.
If you are concerned about your eligibility, call the VA Loan Guaranty Service at 877-827-3702 (TTY:711).
Look for Competitive Loan Rates
The interest rate you receive for a mortgage affects your monthly payment amount.
For example, according to the National Association of Home Builders (NAHB), the difference between a 3 percent and a 7 percent mortgage rate is an additional $1,000 per month. This happened in 2022 when the Federal Reserve raised interest rates.
Fortunately, according to Experian, VA loans generally have slightly lower interest rates than conventional loans.
For example, the average VA loan in March 2026 was 5.63 percent. The average rate for a 30-year fixed-rate conventional loan was 6.58 percent.
The difference is that the VA provides a financial guarantee to the lender if a borrower defaults. This reduces the risk to the mortgage lender.
Discuss interest rates with your lender and compare them with other financial institutions’ VA loans. There may be room for negotiation if you have a low FICO score and other qualifying factors.
Required FICO Score
Although you may have the possibility of a lower rate, it’s vital that you discuss rates with lenders before you sign the bottom line on a mortgage. Rates can vary between lenders. It’s important to research this.
There are also other contributing factors to interest rates. For example, according to Zillow, lenders generally require a minimum FICO score of 620 to qualify for a VA loan.
However, some VA lenders may accept a lower credit score if certain conditions are met. Speak with a VA lender to determine what credit score you need to qualify.
Mortgage Loan Fees
According to the VA, there is a one-time VA funding fee. This helps lower the cost of the loan for taxpayers since the borrower isn’t required to make a down payment or purchase monthly mortgage insurance.
Funding fees are expressed as a percentage of the total loan amount. They are typically between 1.25 and 3.3 percent of the loan amount and depend on whether you have a down payment. The funding fee is based on the loan amount, not the purchase price of the home. You can either pay the VA funding fee upfront or finance it into the loan amount.
You have the option to pay discount points to a lender at closing to receive a lower interest rate.
It’s important to know that, according to Veterans United Home Loans (a private lender), the VA has established a 1 percent rule as a guideline for lenders. This is the maximum amount that veterans can be charged for certain non-allowable fees.
One percent of the loan amount covers the lender’s costs associated with originating and processing the loan. They are not allowed to tack on additional charges for things the VA considers overhead.
For example, if the borrower’s loan is $200,000, the maximum lender fee that they can be charged at closing is $2,000. Any lender fees over that amount must be paid by the lender or the seller, not the borrower.
Use an Experienced Lender
One of the most important qualifications for a VA lender is experience. VA loans are complicated, so ideally, your lender will have deep expertise.
All loans require extensive paperwork, but VA loans require unique documentation that an experienced mortgage lender will thoroughly understand.
The Epoch Times copyright © 2026. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
