08/24/2010 When taking out a VA home loan, the most important part of the process is selecting the right lender. This is a huge step. A home purchase is the most significant purchase of your life, and as a result, you need to ensure that you're working with someone who will guide you along the way and act with your best interests in mind. These five tips will help you find the best VA home loan lender.
1. Work with an experienced lender. Experience is the most important quality to look for in a lender. VA home loans are different than conventional home loans, and in many ways they are more complex. If a lender you're considering has never dealt with VA loans before, you should probably look elsewhere.
2. Determine whether you need a mortgage broker or a direct lender. This is going to depend on your own situation and how good you are at researching mortgage rates. If you don't feel you have the knowledge or time to look for the best mortgage rates yourself, work with a mortgage broker. He or she will be able to offer you numerous loan packages from a variety of lenders. Working directly with a lender yourself, however, will allow you more flexibility to tailor a loan package to fit your needs. The loan process will typically move faster as well. Whether you work with a broker or a lender is ultimately up to you.
3. Compare Good Faith Estimates. A Good Faith Estimate is a document that every lender is required to provide you with. This document outlines every cost associated with originating the loan. Good Faith Estimates are useful because they allow you to uncover hidden fees and required expenses that lenders may charge. Don't just compare mortgage rates and loan terms. You need to compare closing costs and other fees between lenders as well, because these costs can make or break a deal. You don't know for sure if a lender is worth your time or not until you've gotten a Good Faith Estimate and compared it against others. Don't skip this step.
4. Watch your credit score. Don't let too many lenders access your credit score. If your credit report is pulled frequently in a short period of time, the credit bureaus may lower your score. Why? It's simple. Numerous credit pulls with no resultant loan may give credit bureaus the impression that you're getting rejected by lenders. Someone who's getting rejected by lenders is probably not financially responsible in some way. As a result, the bureaus drop your credit score. Make sure you do as much research as you can before you formally allow a lender to access your credit score.
5. Talk to your lender. This is important. You're entering a long-term relationship with your lender, and you need to establish open communication with him or her from the beginning. Ask questions. Ask for advice. Learn everything you can. Your lender should be willing to answer your questions and work with you. If not, take your business elsewhere.
