- September 3, 2023
- Posted by: legaleseblogger
- Category: Related News
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Introduction: Choosing a Lender for VA Loan
When it comes to using a VA loan, selecting the right lender is crucial. We initially planned to stick with the lender recommended by our realtor. However, a coworker recently shared his positive experience with Navy Federal, leading us to reconsider our options. Upon conducting thorough research, we found that Navy Federal stands out for several reasons, making us inclined to choose them as our lender.
Benefits of Navy Federal: No PMI and Competitive Interest Rates
One of the key factors that caught our attention is Navy Federal’s policy of not requiring private mortgage insurance (PMI) for loans with less than 20% down payment. This advantage provides immense financial relief, as PMI can significantly increase monthly mortgage payments. Furthermore, Navy Federal offers highly competitive interest rates, which has a direct impact on the overall cost of the loan. The combination of no PMI and attractive interest rates makes Navy Federal a compelling choice for us.
Flexibility in Locking-In Interest Rates
Another noteworthy feature of Navy Federal is their policy of allowing borrowers to lock in their interest rates twice if better rates become available. This flexibility provides a safeguard against fluctuating interest rates, ensuring that borrowers can secure the most favorable terms for their mortgage. The option to lock in interest rates twice gives us added confidence in Navy Federal’s commitment to providing the best available rates.
Seeking Recommendations and Experiences
However, since we acknowledge that there may be individuals with more knowledge and experience in this matter, we defer to your insights. If you have used a VA loan before, we would greatly appreciate your thoughts and personal experiences. Your input can help us make a well-informed decision regarding our choice of lender.
AI Legalese Decoder’s Assistance
In this process of evaluating lenders and understanding the intricacies of VA loans, an AI Legalese Decoder can be enormously helpful. This technology utilizes artificial intelligence to simplify complex legal jargon and decode it into plain language. By using an AI Legalese Decoder, potential borrowers can easily comprehend the terms, conditions, and requirements associated with VA loans. This tool can empower individuals to make informed decisions by providing clarity and ensuring a thorough understanding of the legal aspects involved.
In conclusion, as we explore different lenders for our VA loan, we are leaning towards Navy Federal due to their attractive benefits, such as no PMI, competitive interest rates, and the option to secure favorable rates through multiple lock-ins. However, we value the insights of those who have prior experience with VA loans and seek recommendations and personal experiences from others. Additionally, utilizing an AI Legalese Decoder can further assist us in comprehending the complexities of VA loans, ultimately guiding us towards making the best decision possible.
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You should be shopping around. Go with the big names as well as local guys to you and see who is best.
No VA loans require PMI. That’s kinda the point.
I would shop around to see your best options. I contacted PenFed, still have not got back to me after two weeks for pre-approval. Also contacted Navy Fed as well. Ended up going with builder’s lender due to points and 5K closing. Second time going through VA home process.
No PMI/zero down is part of the VA back loans. Here is link to better understand VA loan (page is specifically for funding fee).
[https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/](https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/)
Search around for the best rates. Personally did not go with NFCU or USAA, because of their closing timeline (no guarantees of 30-day closings on their end when I purchased). I chose to go with a big bank for my first (and only VA loan) mortgage and it was fine. Closed on time (30 days), but they did sell my loan immediately to Lakeview Loan Servicing.
Second mortgage (conventional) was with a local lender, closed on time (<30 days during height of low interest rates), who also sold my loan (immediately) to Truist Bank.
I recommend getting at least four lender quotes (two big banks/credit unions & two local lenders). The reason why it’s important to shop around, as others have mentioned already, is because you can ask other lenders to match the lowest rate/terms. For example, I closed two months ago using a VA loan and wanted to go with NFCU (due to their NFCU RealtyPlus program benefits), but they didn’t offer the lowest rate. So I went to PenFed, got the rate quoted, and NFCU matched with the lower origination fee (went from 5.75% to 5.125%). Smaller lenders will be more personable and reachable, so you can use them to ask questions and ultimately go with them if you end up liking their terms. Also, “lock and shop” policies will vary lender to lender. Some lenders allow you to lock in the rate for X days, others will only lock once you have a signed contract.
VA loan does not require PMIs. I purchases two homes with VA loans with minimal down payment over the last few years. Good luck!
Don’t discount your realtors advice. Just sold my house and my realtor looked hard at who the buyer was using as a reputation to be able to close and on time. So they really wanted to see local lenders and knowing who’s going to answer the phone. But it’s also a competitive market where I’m at where we could be picky.
Hey, get those other quotes quick it usually wont impact your credit score if different lenders query against it within a certain amount of time for the same purpose.
NBKC and PenFed ended up being the best for me, after shopping around a ton. Lowest rates and little/zero lender fees.
Lender fees can be impactful because that affects your cash to close
Highly recommend Navy Federal. IÔÇÖve used them three times.
Couple highlights:
1. They do NOT sell mortgages to other servicing companies like many lenders do.
2. Check out their Realty Plus Program. If you use their recommended realtors, youÔÇÖll get a percentage payment back a few weeks after closing. For example, $300k house, gets you about 1800 cash back. (Helps with closing costs)
Like everyone says. Shop around. USAA has something similar. Find the one thats right for you.
Try nbkc. They used to be very competitive
Look for APR, not just interest rates. That will add in misc fees (origination, admin, points, etc). I pay attention to the spread as well
Ask about reputation for closing on time, time to review docs, etc.
Good luck!
I did a really in depth comparison of a bunch of lenders in July 2021. Here were the results:
|Lender|Lowest 30 year fixed VA loan interest rate (not including points)|30 year fixed VA loan APR|Max points offered|Rebate towards closing|Promotion|
|:-|:-|:-|:-|:-|:-|
|PennyMac|2.25%|2.587%|N/A|$4,081 |Ends in September-waive underwriting fee ($100), half of a percent off closing|
|Veteran’s United|2.75% – 2.815%||3|Yes|N/A|
|NFCU|2.50%|2.65%|1.5|N/A|N/A|
|Rocket Mortgage/Quicken Loans|2.125%||Yes, unknown||Yes, 1.5-2% discount, but can’t say exactly what |
|PenFed Credit Union|2.250%||Yes|$4,386 |Straight lender credit in addition to rebate off mortgage an extra $1500 |
|Veterans First Mortgage|2.250%||Yes|N/A|CAN help with closing, they can help you find a grant|
|LoanDepot|2.750%||Yes|N/A|No|
|Flagstar Bank|2.500%|2.62%|1|N/A|1.875% – 15 year loan|
|First Mortgage Direct|2.250%||1|$4,756 |No|
|Freedom Mortgage Corporation|3.250%||2|||
I’m not sure how well this table will post. Send me a private message if you want me to email you the spreadsheet. I have additional columns on my spreadsheet (ARM options/Pre-approval timelines).
Obviously the interest rates are way higher two years later, but hopefully this will help you. Not sure if they all increased their rates at the same pace. Here are the metrics I used when looking for the loan: Purchasing a single family home or condo in California, purchase price $450K-$520K, credit score 820+, DTI ratio at the time not including mortgage = 15%, including mortgage = 29%. 100% financing, no money down. I called several more lenders but they wouldnÔÇÖt give me a loan in California or they too long to get back with me, or I couldn’t get a hold of them over the phone.
Finally, check out this for monthly, quarterly, and annual VA lender stats (highest number of loans and total dollar amount of loans provided): [https://www.benefits.va.gov/HOMELOANS/Lender_Statistics.asp](https://www.benefits.va.gov/HOMELOANS/Lender_Statistics.asp)
You can even see a bunch of county and state data if you want to nerd out.