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Veterans and active military duty members often make mistakes when choosing VA lenders that end up costing them an awful lot of money. Most common one, besides the failure to do proper research of available options, is going with a lender that their realtor recommended. The logic is very simple: preferred lenders of real estate brokers commonly lack experience once it comes to VA lending products. They most commonly fail to comply with guidelines, endorsed by VA, charging high origination fees to seller, and higher interest rates. No matter how pushy your real estate agent may be, always perform due diligence on your own and go by what makes sense to you money-wise.
There Are Great VA Lenders and Other VA Lenders
Always know who your lender is: a mortgage company, a broker, or a bank. It does make a huge difference in term of what interest rate and fees you will end up paying. Going with banks is always a better option, as they generally offer lower interest rates and charge little, if any, upfront fees.
The Organizational Structure of Your VA Lender
Many lending institutions have their departments located in different places. It is important to know where the processing, underwriting, and closing departments of your bank are located. Should they be under one roof, you are in luck, since it allows for faster processing times. This way your loan officer will have easier access to your file, and you will be able to meet the closing deadline easily.
How Experienced Is Your Loan Officer with VA Loans
It is always better to have somebody experienced on your side. Therefore, always make sure that the loan officer working on your case has solid experience with VA loans. Now, when VA loans offer premier features to veterans and active duty members, a banker with experience may help you to make sure you benefit from all of them.
Dealing with LAPP Lender
LAPP is an abbreviation standing for Lender Appraisal Process Program. LAPP lenders, besides having the right to review appraisals, are also granted rights to issue Notice of Value, commonly known as NOV. Not all VA lenders are able to issue NOVs, but LAPP lenders are. In case you are not dealing with LAPP lender, the VA will issue your NOV. Should you go with LAPP lender, you would save significant amount of processing time, up to 10 days, as VA is quite bureaucratic and slow. Since interest rate locks are most commonly 30 days, this could potentially save you some money on interest by fitting into a time-sensitive deadline.
Most people do not realize that not all VA lenders have equal capabilities. Such small detail, as having your second level review done on the lender level that most veterans do not pay attention to or are simply not aware of, may have a direct affect on the time needed to finish the deal, as well as on the terms of your VA loan. Ensuring that one lender handles all of the process would save you a lot of hassle.
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