If you want a VA mortgage, work with a VA-approved lender. VA-approved lenders have to meet standards pertaining to their experience, net worth, expertise, and quality control plan, and they can lose their approval if they “fail to exercise the necessary care and diligence.”
While other lenders can originate your VA mortgage, only those with unsupervised automatic authority can approve your mortgage application on their own – non-approved lenders are just an additional layer of processing to deal with. In addition, only the most qualified lenders can get VA approval – giving your business to an approved lender provides some valuable quality control.
Questions for VA mortgage lenders
When interviewing mortgage lenders, ask them these questions:
- Are you licensed to do business in my state?
- Are you VA-approved?
- Will you give me a written quote on a Good Faith Estimate? Ask for written quotes on Good Faith Estimates (GFEs), not just worksheets. Worksheets do not obligate lenders the same way that GFEs do.
- Do you apply overlays that affect me? As mentioned in the section on qualification, many VA lenders impose minimum requirements that are stricter than VA’s minimum requirements. If you know your credit score is 600, don’t waste time with lenders that require 640 FICOs.
Finding a VA loan officer
Chances are the quality of your mortgage experience will depend on the expertise, personality and work ethic of your loan officer. The price of your home loan is of course important, but so is the excellence of your loan officer or mortgage broker. Before committing to a lender, check out the Lender Ratings and Reviews section of this site. Or read the guidelines below.
Great loan officers
- Return your calls. Within an hour in most cases.
- Explain. If they recommend a mortgage loan product, they can tell you why it's the best one for you, detailing programs and lending terms in plain English.
- Offer choices. In most cases, more than one kind of loan will work for you. A good loan professional offers alternatives, gives you the pros and cons, and helps you make the best choice for your situation.
- Ask questions. The right loan depends on many things. How long do you plan to keep the property? Do you expect increases or decreases in income, such as college graduation or retirement? Does your income fluctuate? Are you a risk-taker or do you want to feel safe even if it costs more? If your agent doesn’t ask questions, find one who does.
- Consider your comfort. Do you prefer to get your loan documents early and review them at your convenience? Would you like your loan officer to attend your closing? Do you want detailed explanations, or do you prefer to "cut to the chase" and limit your involvement? Your loan agent's work style should reflect your preferences, not his or hers.
- Think on their feet. Your credit report came in with an unexpected blemish. The condo lost its VA approval. The program you wanted was discontinued. An underwriter has a question about your commissions and bonus income. Most loans get at least one monkey wrench thrown into the process at some point. A good loan agent anticipates these possibilities and solves the problems.
Because the success of your home loan depends so much on the skill and character of your loan officer, it's critical to avoid bad ones. Bad loan agents are more than just an annoyance--they can cost you serious money and make your hair fall out, even if you’re only 25 – and female. So look for these red flags when shopping for a lender, and avoid the turkeys:
Bad loan officers
- Pull disappearing acts. They're playing squash when you call, and they don't call you back.
- Push the same loan on every client. If you tell your agent that you have 20 percent down and plan to sell up in five years, she’d better have a great reason for suggesting a 30-year fixed VA mortgage.
- Don't care about your comfort zone. They push you to borrow more than you’d like or bully you into riskier loans than you want. If you get the feeling that your loan officer and your real estate agent are tag-teaming you, they probably are. Replace them BOTH and find someone you can trust.
- Are unhelpful. They hand you a stack of paperwork and expect you to be their secretaries. They make weird requests--for the juicy details of your messy divorce or a letter from your CPA about your Tupperware parties. These can be legitimate underwriting requirements, but you should be told why they are needed.
- Don't communicate. They change your program or rate without consulting you. They don't ex-plain the disclosure forms. Or they hide behind jargon, explaining, "Well your rate is higher be-cause your LTV requires an underwriting exception and the doc draw was delayed so we blew the lock." Yikes.
- Don't know. Agents who don’t understand the special ins and outs of VA lending can't do a good job for you, however motivated or nice they may be. While many learn from their mistakes and eventually become good loan officers, you don't want to be the mistake they learn from, do you?