What Lenders Accept The VA Loan?

If you are a Veteran or military service member looking to buy a home, chances are that you have considered using a loan backed by the Department of Veterans Affairs. The loans, known as VA Loans, allow you to buy a home without a down payment without the need to pay Private Mortgage Insurance. 

When using a VA Loan, you will still need to get a mortgage through an independent lender in most cases. The Department of Veterans Affairs does not actually lend money. Instead, they guarantee the loan. If you default on the loan, the VA will pay your lender a predetermined amount. This assurance allows lenders to approve your mortgage even without a down payment, knowing that they will be paid at least some amount even if you default.

Most lenders work with VA Loans. Accepting VA Loans opens up more potential customers for them, since many people who use their VA Loan are not interested in conventional financing that would require a hefty down payment. It also provides the opportunity to lend money that they know is guaranteed by the Department of Veterans Affairs.

VA Loans do require some extra paperwork, however. This can add time to the overall mortgage approval process. Homes purchased using a VA Loan must be appraised by an independent appraiser to make sure that the purchase price is fair and tha the home is actually worth that amount. It also requires a home inspection. The VA Loan has minimum habitability requirements that need to be met. These steps do require some extra work for the real estate agent or lender to arrange. Most have contacts with professionals that know this work and can do it efficiently.

The best thing to do if you are early in your home search is ask your lender about their experience with the VA Loan. Even though most work with the VA Loan, not all lenders are used to completing the extra steps. Look for a lender who has experience with the VA Loan to make the process smoother.