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5 Most Important Things To Look For In A VA Home Loan Lender

Veteran's Administration (VA) home financing is a great deal for those who qualify. If you do, you'll need a lender authorized by the VA to handle this type of home financing. Many are out there, but finding the best is challenging.

Let these five tips help you choose the right VA-approved lender.

1. Understand what it means to be a LAPP lender.
Before choosing a VA-approved lender, find out whether the lender is also a Lender Appraisal Process Program, or LAPP lender. One requirement of VA financing is the need to confirm the property's appraised value. LAPP lenders have been authorized by the VA to conduct this appraisal review step and issue what's called a NOV or Notice of Value. If you choose a lender that's not LAPP-approved, the VA has to conduct the appraisal review. Waiting for the VA to issue the NOV could cause unnecessary delays that could cause you to lose a locked-in interest rate. If that happens, you could be stuck with a higher interest rate which will cost you money. Extending the lock-in date also comes with a cost. So avoid the delay and protect your interest rate by choosing a VA lender with LAPP approval.

2. Find out the lender's experience with VA loans.
VA loans have different requirements and qualifying criteria than other types of financing. These loans can be complicated, and it's in your best interest to find a VA-approved lender with many years of experience processing these loans. To help meet the rising demand for VA home loans, many lenders have rushed to jump on the VA loan bandwagon. These newer lenders may not be your best choice.

3. Know where your VA loan will be processed.
Ideally you want a VA-approved lender that has the personnel to handle all the components of obtaining loan approval under one roof. This includes the processing department, underwriting, and the closing department. Having everyone together expedites the process and helps you meet your closing date.

4. Know the type of lender you're dealing with.
Your VA-approved lender can be a bank or a broker or a mortgage/finance company. Each does business differently. For the best shot at the lowest mortgage rates , let a bank handle your VA loan. You'll probably find fees to be lower or non-existent.

5. Be wary of choosing lenders referred by your realtor.
Doing so is convenient, but could end up costing you more in origination and other fees considered "non-allowable" by the VA. Plus these lenders don't always have the right experience to handle VA loans.

Taking time to research your options really is the only way to know you're choosing the right VA-approved lender. Never rush this important decision.

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