Choosing a VA mortgage lender is just about as important as choosing the right interest rate. Your VA lender has your mortgage fate in their hands. They could also be the lender you deal with for the next 15 – 30 years as you pay your mortgage. You want it to be a lender that you are comfortable doing business with and that has plenty of experience with VA loans.
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Ask About Experience
VA loans are a completely different program from any other program out there. Before you choose just any lender, make sure the lender has experience with
VA loans. It’s not that VA loans are hard to get approved, but one wrong move and it could send your loan in the wrong direction.
There’s nothing wrong with asking a VA approved lender how many VA loans they have done before. You probably don’t want to be the Guinea pig for a newly approved lender. Your best bet is to choose a lender that has several years of experience handling these loans so that you know you are in good hands.
Test the Lender’s Knowledge
Even if a VA lender tells you they have plenty of experience with the loan program, you should look for some red flags. For example, if the lender doesn’t talk to you about your military experience or as to see your Certificate of Entitlement, that shows that they may not fully understand the program. The COE is crucial for the VA to prove that you are
eligible for benefits. Without it, you cannot secure a VA loan.
If the lender continually tries to talk you into other loan programs, this is another red flag. As a veteran, the VA loan is one of the best programs available to you. It doesn’t require a down payment and it has no mortgage insurance requirements. It’s the best of both worlds for you and for a lender to talk you into another program means that they probably don’t have the experience they claimed to have in the program.
If the loan officer doesn’t know the answer to basic questions about the VA program, this is another red flag. You want a lender that is well-versed in the program and that can tell you all of the details about it. If the loan officer continually has to put you off to get the answers elsewhere, chances are that he/she is not as experienced as they claim.
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Will the Lender Get Your COE?
VA-approved lenders have access to a system that can access your Certificate of Entitlement within minutes. If you ask a lender if they can obtain your COE for you and they look at you confused, you know they don’t have the necessary experience to handle your loan.
The lender only needs a little personal information from you to obtain your certificate for you. This can save you time when you are trying to get your loan to the closing table. A knowledgeable VA lender will have access to this program.
Get Pre-Approved From Several Lenders
Once you think you’ve narrowed down your choices to a few select lenders, get pre-approved with them. This means that they evaluate your qualifying factors and provide you with a pre-approval letter. In addition to the letter, they should send you a Loan Estimate. This document shows you all of the details of your loan including the loan amount, interest rate, and closing costs. Compare these estimates to one another to see which lender offers the best deal.
The VA is finicky about which closing costs you can pay as a veteran, so you shouldn’t have Loan Estimates that show excessive fees. If you do, this is another red flag that the lender doesn’t understand the VA program. The VA-approved lender gets a
25% guaranty from the VA. This means if you default on the loan, the VA will pay the lender 25% of the defaulted amount. This makes up for the lack of down payment and the flexible guidelines that VA loans offer. Because of this, there isn’t a reason for the VA lender to charge you excessive points or fees on your loan.
Choosing the right VA lender is a delicate process, just as it is choosing a lender for any loan. It’s not just about the lender that can give you the lowest interest rate or the best fees. It’s about the lender that can handle your VA benefits and give you the most beneficial loan for your situation.
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