Deciding on a Good VA Lender
VA home loans have some rather enviable features that other loan programs are jealous of. First, there is no down payment required for a VA loan. Certain conventional and FHA mortgages have low down payment options but they also have a monthly mortgage insurance premium in addition to the mortgage payment, making the home less affordable. There are reduced closing costs associated with a VA home loan, at least in terms of the closing costs veterans are allowed to pay. No other loan program protects its borrowers in this way.
VA loans are similar to other loan programs in terms of how the loan is approved but there a few quirks in the program unique to VA loans. Some of these quirks can make the VA loan approval process a painful one, so it's important to find the best VA lender you can. What are the marks of a solid VA lender?
A lender has the option of processing and approving certain types of loans in the marketplace. A lender can underwrite conventional loans approved using standards established by Fannie Mae or Freddie Mac. Or the lender can choose to add FHA loans to their profile. It's up to the lender to position them in to any particular mortgage market.
The first sign of a really, really good VA lender is its dedication to VA loans. A VA lender who is authorized to approve VA loans on their own has achieved a particular status dubbed an "Automatic Non Supervised Lender." Gaining such status with the VA isn't easy with the lender required to provide evidence of their experience in VA lending, the quality and education of their underwriters in addition to scrutinizing a lender's owners, officers and staff as well as a corporate credit report.
Automatic Non-Supervised Lending status is a sign the lender is dedicated to the VA loan program and has the experience to properly serve qualified veterans.
A good VA lender is also approved by the VA to order its own appraisals through an appraisal management company. This particular status is called LAPP, which stands for Lender Appraisal Processing Program.
Years ago, the VA handled the entire property appraisal request on each individual VA loan that was submitted. This added considerable time to the process as well as confusing the process. Today, VA lenders can order their own appraisals, approve them and process the file internally without the need for the VA to perform or review part or the entire VA appraisal.
If your lender is both LAPP approved and is a Non-Supervised lender, you're off to a good start.
After you've found a few good candidates, you next need to consider the staff you may be working with. Primarily you will work with a loan officer who will shepherd you through the VA approval process as well as help determine your best VA loan program.
Your VA loan officer needs to be an experienced one; not just in terms of lending experience but in working with VA loans in particular. VA loan programs require a different touch than a conventional loan and if mistakes are made during the process you could find yourself being denied a VA loan program when you could rightfully qualify at another lender. Your VA loan officer should have at least five years of experience with VA mortgages.
Finding a good loan officer also means keeping that loan officer throughout the approval process. Some companies assign you to a "team" which means you're not sure who you'll be talking to the next time you have a question. Your loan officer should be yours and should be available to answer your questions on your time.
Finally, a really, really good loan officer is someone you can relate to. The loan officer doesn't talk down to you or speak to you in language you don't understand. When you ask a question or place a phone call, the loan officer doesn't act like you're bothering them. Mortgage loans are like few other services, the person you work with knows things about you that your closest neighbors never will such as your credit, your income and your assets. You need a loan officer you can trust and one you communicate well with.
If you've gotten this far and have a good loan officer at a solid VA mortgage company, you've pretty much made it. There's one additional facet that can also provide you with benefits: where your loan is processed.
In some areas, you may not have a choice. Some lenders accept a VA loan application then send your application to another loan processing facility out of town. Sometimes out of the entire state. If your loan officer is in your town but your loan file is two time zones away, you can expect a few communication hiccups.
Overall, if you've got a LAPP approved, Non-Supervised VA lender and your loan officer has five or more years' experience with VA loans and your loan application is processed, approved and documented in your home town ... you've just found a really, really good VA lender.
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