Do all Mortgage Lenders Offer VA Loans?

Veterans have the opportunity to borrow 100% of the purchase price of a home assuming the home is worth as much as the sales price. But, veterans do have to shop around and find VA approved lenders. Not all banks offer this type of loan.

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How to Find VA Approved Lenders

Today, finding VA approved lenders is easier than ever before. All it takes is a search online to find a lender near you or one that can handle your situation. Did you know you don’t have to use a lender in your area? As long as the lender is licensed to offer loans in your area, you are good.

If you can’t or don’t want to find lenders online, you can use a broker that has access to a variety of loans from many lenders. You can also call around to various banks to find out if they offer VA loans. Don’t just assume that anyone that offers these loans is good, though. Do your homework or research. Find out how experienced they are with this loan type. Ask how many VA loans they close per year and how long they have been offering this type of loan.

VA loans aren’t hard to get, but you want someone that has experience with them to help you make the most of the process.

Learn About Lender Overlays

When you find a few lenders, you’ll want to find out what they require. Yes, the VA requirements are all the same no matter where you go. But, each lender can add their own requirements. They are called lender overlays. As long as the lender obeys the VA’s rules, they can tighten those restrictions as much as they want in order to lower the risk of default.

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You may find a lender that requires at least a 680 credit score even though the average VA lender requires only a 620. You may also find a lender that requires a lower than 43% debt ratio or one that requires more disposable income than the VA allows. This is all because the lender funds the loans – the VA doesn’t. If the borrower defaults, it’s the lender at risk, not the VA, even though the VA does guarantee a portion of the mortgage for the lender.

Qualifying for a VA Loan

It helps to know the basic requirements to qualify for a VA loan. In general, you’ll need the following:

  • 620 credit score or higher
  • Maximum total debt ratio of 43%
  • A stable employment history
  • Stable income or even steadily increasing income
  • No previous federal loan defaults
  • VA loan entitlement

These are the basic requirements you will find at any VA lender. Once you start shopping around, you’ll see that different lenders require different things. You’ll also find that different lenders charge different things. For example, one lender may charge a 1% origination fee while another doesn’t charge an origination fee at all. You may also find different rates between the lenders. It’s up to you to find the lender that offers you the best deal on your loan.

As you look for VA lenders, try to find the one that suits your situation the best. No two borrowers will have the same needs. Find the one that gives you the best rate and term, while helping you qualify for the loan. If you have strange qualifying factors, you may have to shop around a little more to help find the loan that works for you. Not every lender is approved for VA loans, though, but don’t give up on your search, there are many lenders out there.

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